Monday, November 14, 2011
A few thoughts on the NBA antitrust strategy
It looks like negotiations between the NBA and the NBPA have taken a decided turn away from agreement. The NBPA has begun disbanding itself, much as the NFLPA did last spring, and the players will file an antitrust claim against the league -- again, similar to the Brady v. NFL suit.
The last time I dipped into these waters, I was touting the football players' litigation strategy and predicting their eventual victory. Well, as it turns out, I was probably wrong, at least if you define "victory" as getting a better deal than expected. The anodyne mainstream media take was that both sides won (hugs!), but Bill Simmons had a convincing polemic arguing that the players got killed. I think Simmons may have gotten carried away in making his point, but it definitely wasn't the player victory I was predicting. So what happened?
As I said at a recent SLU Law event, I think the lawyer in me was blinded by the beauty of the players' antitrust argument. It's a really good argument. There's no question that the NFL colludes; in the memorable words of Ted Olson, the league is an "antitrust recidivist." The NLRA is structured to allow that collusion when it comes to labor relations, but only if there is a collective relationship. So if the players decide to dump the union, it's really only a matter of time before the owners have to stop colluding or face treble damages. And if the owners stop colluding, then there is no draft, there are no salary caps, there are no restrictions on the market. Facing such a complete destruction of league management, I thought, the owners would likely do anything they could to stave that off. And if you want to argue for my original position, the fact that the owners agreed to a ten-year deal -- when they opted out of the last one less than two years after it began -- shows they were afraid of something.
But the beauty of the legal argument was trumped by the realities of time. Sure, the players could have held out for their antitrust-created wonderland. And I'm pretty sure they would have gotten there. But they could only get there after discovery, a trial, appeals, etc. A year at the least; more likely two to four. What player can sacrifice two to four years of their career? And that also assumes that fans -- outraged at the lack of football -- would not successfully pressure Congress to change the law. I know that's travelling pretty far down the hypothetical. But that's the point: to get to a plaintiffs' antitrust victory, you have to imagine what all could happen in four football-less years.
So now that's what the NBPA is doing. I don't know the intricacies of the negotiations; the players apparently believe "[w]e've given and given and given, and they got to the place where they just reached for too much and the players decided to push back." But I also see that the decertification effort is being led by two lawyers -- Jeffrey Kessler and David Boies. Kessler said to the AP: "The fact that the two biggest legal adversaries in the NFL players dispute over the NFL lockout both agree that the NBA lockout is now illegal and subject to triple damages speaks for itself." I don't buy that Kessler is just doing this for the money his firm will get from the suit; that'd be really short-sighted. But I do think that lawyerly minds are apt to see the enticing possibilities of the lawsuit while perhaps discounting the realities on the outside. Within the bubble of that Eighth Circuit argument, it seemed to me it was only a matter of time before the players prevailed. Still true, perhaps. But litigation does not exist in a bubble.
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One difference here is that players in the NBA may be in a better position to withstand a prolonged lockout than were the players in the NFL. There are fewer players in the NBA, but more importantly they have other options (overseas) essentially not available for NFL players.
I think the economics are also a bit different -- the NFL makes too much money for either side to have wanted to lose a season. The NBA teams aren't leaving the same kind of money on the table if they scrap the season -- particularly if Stern is to be believed.
Read generously, the league's strategy here is to make this the turning point for the future of professional basketball. The league is willing to lose the season to obtain the kind of restructuring of player contracts it believes will help it avoid destruction and /or irrelevance in the coming years. My guess is that the league here is better prepared to have things drag out than was the NFL.
Posted by: Geoffrey Rapp | Nov 14, 2011 6:09:39 PM
It seems that when a figure of authority stands in front of a room of NBA players and says that they can get a better deal, most players seem to get caught up in the mob mentality and go along with the flow. However, truth be told, I am not even sure what they believe that better deal is, could be, or what they find so terrible about their current deal. If you look at the current practice limitations, salaries, contract guarantees, and NBA player policies, and then compare all of these with other professional sports, it seems clear that the NBA player is well ahead of the game (pun intended).
I do not agree with the post regarding NBA players being in a better position than NFL players to withstand a lockout - professional athletes are notorious for being heavy spenders, poor savers, and I would venture so far to say that most are not prepared to have an entire season pass them by. The idea of going overseas to compensate for the lack of a season will not work for the majority of NBA players, and I suspect as time goes on more and more will look to make a deal - if it isn't too late.
Right now, however, there are a lot of players sitting around with stocked cupboards confident that they can get a deal worked out. It won't be long though until these same players are sitting around with growling stomachs, a can opener, and empty shelves. Greed is in the way on both sides, and the league, players, and numerous workers at all levels will all suffer.
Posted by: New York Birthday | Nov 14, 2011 9:38:41 PM
Just one quibble with your interesting post: it assumes that the players share a common vision respecting the outcome of these negotiations. It's true that some of the players want to use the union's disclaiming of interest as a ploy to improve their bargaining position and unleash antitrust litigation. That's certainly the leadership's strategy. But other players (stars) want the union to decertify just to get rid of the union. The pay disparities among players are huge, making unionization tenuous. The top players would probably make a lot more money were the antitrust laws used to curtail owner collaboration on setting salaries, and their agents have made that reality clear to them.
Posted by: Jeffrey Standen | Nov 15, 2011 12:38:23 PM
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