Wednesday, November 9, 2011

Understanding the NBA Labor Dispute?

No, We Don’t Understand It Either

The National Basketball Association and the Player’s Union are locked in a labor dispute which so far has resulted in the cancellation of the first part of the professional basketball season, and may well result in cancellation of the entire season.  Now this is not a national issue, the absence of a pro basketball season will not affect the national economy and for the large majority of Americans this is a non-issue.

But it is an interesting issue.  As usual, the dispute is about money.  The players want more, the owners want more.  At this point the two sides seem very close.

The players — who had vowed not to accept less than 52.5 percent of league revenues — proposed a 51 percent share, with 1 percent devoted to aid retired players. That moved them within 1 percent of the league’s longstanding proposal.

However there are complications, like this

The league’s standing proposal would eliminate spending options for teams that pay the luxury tax, by banning them from sign-and-trade deals and the use of the midlevel exception. At Cohen’s suggestion, the league proposed a “mini-midlevel” that would start at $2.5 million — half the value of the full midlevel — and would be limited to two-year deals.

And no, The Dismal Political Economist, who prides himself on his financial expertise, has no idea what that means either.

As with any bargaining session there are hardliners,

 Joining the owners’ delegation were two of the leading hardliners — Charlotte’s Michael Jordan and Portland’s Paul Allen

Now Mr. Jordan is one of the greatest, if not the greatest basketball player of all time and Mr. Allen is the Mr. Allen of Microsoft founding.  Just why these two men have such a rigid attitude is not evident.

On the unions side, the players do not seem to be in a strong positon.

The players are in an untenable position, with choices that range from bad to worse. Dissolving the union may be the inevitable course — whether it comes by force, from a disenchanted faction of players, or by union leaders themselves.

Neither Fisher nor Kessler would entertain that possibility early Sunday morning, but the union has always held out decertification as a measure of last resort. Going that route would allow the players to sue the league under federal antitrust law, but resolution could take years.

So one imagines that ultimately a settlement will take place, whereby men make huge salaries for playing a game for the entertainment of the public, and owners continue to make millions, partly from support of taxpayers who fund arenas and other team activities.  That’s the American way.

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