COLLECTIVE BARGAINING AGREEMENTS

BY: JODIE SHIMP ALICIA DELCUPP

Overview
Collective Bargaining Agreements NFL NBA NHL

What Are Collective Bargaining Agreements?

Between league owners and players associations (unions) Establish specific rules for how the league will operate Division of league revenues Salary caps/ Luxury taxes Drafting players Free agency Disciplinary rules Drug testing policies Exempt from antitrust laws Negotiated in good faith Agreed to by union and management

Negotiation Tactics
OWNERS
Implement lockouts Replacement players Time + money Leverage

PLAYERS
Going on strike Threatening to go play overseas Decertification Starting own league

History of Lockouts
MLB - eight work stoppages between 1972 and 1995, with player strikes or owner lockouts causing the cancellation or postponement of games

NBA -four lockouts/ strikes since 1994, with two eliminating portions of the seasons
NHL - four lockouts/ strikes since 1990, all of which eliminated large portions of the seasons NFL- six lockouts/ strikes since 1968

Court Cases
Federal Baseball Club of Baltimore, Inc. v. National League of Professional Baseball Clubs (1922) Baseball exempt from Antitrust laws Wood v. National Basketball Association, 809 F.2d. 954 (2d. Cir. 1987) Mandatory subjects of collective bargaining American Football League v. National Football League, 323 F.2d 124 (4th Cir. 1963) NFL a natural monopoly Lawsuit filed by NHL against players union and 36 named athletes Declare lockout legal

Video

Panel on Collective Bargaining

NFL Collective Bargaining Agreement

Components of the CBA

Revenue Split Salary Cap Drafted/ Undrafted Rookies Revenue Sharing Player Safety Retired Players

Revenue Split
Players must average 47% over next 10 years 55% of national media revenue 45% of NFL Ventures revenue 40% of local club revenue For 2014-2022 NFL will receive approximately $6 billion per year ($187.5 million per team per year) from media revenue The Oakland Raiders -$226 million in 2012 club revenue Dallas Cowboys- $500 million in 2012 club revenue

Salary Cap

$120.375 million in 2011- $6 million less than previous years Starting in 2012- based on all revenue split Can borrow against future salary caps Eliminated performance- based pay

Drafted Rookies New Rookie wage scale

Dramatically reduced the amount of money they can make Contract lengths 4 year + 5th year option for first round 4 years in all later rounds 3 years undrafted Prevent holdouts 2010

2011

Retired Player Benefits

Additional funding for retiree benefits between $900 million to $1 billion over 10 years New Legacy fund devoted to increasing pensions for pre-1993 players Improvements to: Post-career medical options Disability plan Career transition and degree completion programs Player care plan

Player Health and Safety

Reducing off-season program by five weeks Limiting practice times and full-contact Increasing number of days off $50 million per year fund for medical research, healthcare programs and NFL/NFLPA Charities

4,000+ Ex- Players Vs. NFL

of leagues ex- players filed cases against the NFL regarding the withholding of information related to concussions NFL wants to settle through arbitration Grievances covered in collective bargaining agreement Players lawsuit argues that NFL deliberately withheld information about the risks of playing football Questions of negligence and fraud

Question
Do NFL players have some responsibility to educate themselves on the potential dangers of playing the game or should that responsibility lie with league officials?

NBA Collective Bargaining Agreement

Components of the CBA

Salary Cap and Related Rules Escrow and Tax Arrangement Free Agency Anti-Drug Agreement NBA Development League Miscellaneous

Salary Caps
Salary Cap is $58.044 million for 2012-2013 All other seasons cap is calculated by multiplying the
Basketball Related Income by 44.74%, subtract projected players benefits and divide the result by 30.

Minimum Team Salary is $49.337 million (85% of the

cap) for 2013-2013

All other seasons minimum will be 90% of the Salary

Cap

Contracts
Maximum length of contracts 5 years between a team and its free agents 4 years for extensions of rookie scale contracts 2 years for contracts signed using the min. salary
Exception

2 years or add two one year team options for third and
fourth years for Rookie Scale contracts

4 years for all other contracts

Free Agency
A first round pick is considered a Restricted Free Agent
when his Rookie Scale contract expires, the team exercised it third and fourth year option, and team makes a Qualifying Offer

Any other player is a Restricted Free Agent at the end of a

player contract that expires after the first three seasons they play in the NBA

Anti-Drug Agreement

Prohibited Substances:

Amphetamine Benzodiazepines Cocaine GHB

Testing can occur randomly or if there is reasonable cause All players are subject to four random tests during the season and two random tests during the post season All tests will be conducted at a lab. If test positive have five business days to request a retest done at a different facility If come forward voluntarily and seek treatment in the Program there is no penalty the first time

Ketamine
LSD Opiates

PCP
Marijuana Steroids

Performance-enhancing drugs and masking agents

What Led to the Lockout

Division of Basketball Related Income (BRI) Before the players got about 57% Now the players will get 49-51% of the BRI Other smaller issues include allowing larger market teams
to spend money on free agents to keep the market competitive

Decertification of the Union

Early December the union threatened to decertify if negotiations didnt make progress or made an unacceptable deal The threat of decertification would provide the players with the leverage in the labor dispute. Anticipating this move, the league filed a federal lawsuit, saying it is an "impermissible pressure tactic," and has had a "direct, immediate and harmful" effect on the negotiations The suit was used as a declaration from the court that the lockout does not violate antitrust if the union decertifies

If the union decertifies the league no longer has protection from antitrust law
Collective bargaining would end if the union decertified The union has threatened to decertify on three other occasions

Question

Do you think decertification is a useful tactic during negotiations?

NHL Collective Bargaining Agreement

Components of the CBA

Training Camp
Grievances Per Diem

Economic and System Issues

Revenue Sharing Supplemental and Commissioner Discipline Health and Safety Issues Playing Conditions and Hockey Issues Standard Players Contract Waivers Player Assignments Miscellaneous

Game Tickets
Insurance Coverage Circumvention

Club Rules
HRR/ Payroll Range Business Issues Entry Draft

Divided into three ranges

Payroll

The ranges for 2013/2014 season are:

Lower Limit is $44 million

Midpoint is $54.15 million Upper Limit is $64.3 million

After the 2013/2014 season the midpoint is calculated by using the formula from the previous CBA with respect to the growth factor and using 50% as the players share
The upper limit is 15% more than the midpoint The lower limit is 15% less than the midpoint The upper limit will never fall below $64.3 million The amount between the lower limit and upper limit will never be less than $16 million and never more than $28 million

Minimum Salaries
2013/14 & 2014/15 seasons is $550,000 2015/16 & 2016/17 season is $575,000 2017/18 & 2018/19 season is $650,000 2019/20 & 2020/21 season is $700,000 2021/22 season is $750,000

Health and Safety

Substance Abuse and Behavioral Health program Performance Enhancing Substances program

All illegal substances that can be misused as performance enhancers (ex: stimulants, amphetamines, etc) Tested during training camp, once during regular season as part of a team testing and random testing on individual players Positive test will lead to suspension Player has 48 hours to appeal

Medical Care Standards of Medical Professionals in NHL EMRs Second Medical Opinions

Contracts
Maximum length of contract is seven years subject to Clubs
ability to resign its own player for a term up to eight years

For unrestricted free agents there is an option to sign a player

for an 8 year term with the opening of free agency

For multi-year Front Loaded Contracts The next year after the first cannot increase or decrease
more than 35% of the first years salary and bonus

The lowest compensation cannot be less than 50% of the

highest years compensation

All other multi-year contracts will be 100% of what they were

paid the year before

What Led to the Lockout

How much of the profits generated from hockey would
the owners get versus the players?

The final CBA came out with the players share being 50%
of Actual HRR

Question
The point of a CBA is to recognize the interests of the involved parties during negotiations and to come to an agreement that represents these interests fairly.

Who benefits more from collective bargaining agreements, owners or players?