Friday 1 April 2011

Love's Lost Labor

There isn't much going on at the moment but as I said before I'm not going to use that as an excuse to neglect the blog. As Ryan is currently relaxing in the Barbados sun while on tour, I am in sole command of the good ship Beyond the Cliche and I'll be damned if I let her hit an iceberg or Caribbean island.

So for now, because sometimes your life just isn't exciting enough, here is a brief lesson on United States labor law.

Whether you follow the NFL in detail or not, you should be concerned with what is currently going down Stateside. More accurately, it is what is not going to be happening that is the issue. For the league is in turmoil.

A peculiar aspect of American sports is their league structures. For a nation seemingly obsessed with low taxes, minimalist government and economic freedom, it may surprise you to know that the quintessentially American sports, Baseball, Basketball and Football, are run in a very socialist way.

Perhaps this is the by-product of essentially brand new sports developing in a country where teams have been able to easily relocate and where athletes have always been allowed to be professional, as opposed to traditional British amateurism in football and rugby which persisted well beyond it's sell-by date and meant that the owners of the clubs had a head start when the professional world arrived. The big three American sports (fuck you ice hockey) have ended up as more than mere leagues (that's you Scudamore, no matter how much you cry over it!), pretty much copying each other into the bargin.

Some bright spark back at the start realised that grouping all the teams in the league together into one big organisation would allow them to dominate the market, and hence the money. And so, the 32 teams of the NFL are, by all legal intents and purposes, one entity.

This setup allows the league to enforce things such as revenue sharing, selective television rights and salary caps. The NFL is particularly social; revenue sharing is entirely equal between teams, meaning that a no-hoper like Buffalo gets as much cash from the central league as the perpetually successful Patriots. Baseball does not force the Yankees, by far and away the most profitable team in America, to share all of its revenue with the Kansas City Royals; only football goes this far.

In any other business, if you and your competitors agreed to group together and divvy up the money, unintentionally or deliberately fixing prices in the process, this would be illegal under a branch of corporation law called Antitrust. The group would be classed as a cartel, and would be disbanded. As individual entities, teams would almost without exception be worse off, and would certainly have to change their entire approach to business.

America's sports leagues have therefore come up with ways to get round this pesky issue. Baseball relies on a Supreme Court ruling from the 1930's stating that its league setup does not violate antitrust law per se. US law is based around precedent, and so all the MLB have done throughout their history is made sure this precedent remains in force, by means of numerous expensive court cases.

The NFL does not have this protection, so it came up with an even better way to avoid breaking the annoying laws. They sanctioned the creation of the NFL Players Association, a union for current and retired players, and then offered them a lot of money to waive their rights. Essentially, running a cartel is fine as long as the people you employ are cool with it. It's strange, but that is how the law works over there; it is an 'interesting' interpretation of the principle Volenti Non Fit Injuria ("To the willing, no harm is done") i.e. if you go and volunteer to drive a dangerous rocket car, you can't then sue the owner if you crash.

(The lesson here is: If you spend enough money on litigation and go through enough appeal courts, eventually some judge will give you some leeway. And you can then go through the entire process again to get a bit more. And so on.)

Naturally, this does mean that the players have a fair bit of leverage. The terms of the deal that the owners and the players agree to are outlined in a Collective Bargaining Agreement, or CBA. New ones are drawn up every 10 years or so; the league changes, and so the players and owners may want different things (better image rights to take advantage of social networking, higher salaries etc).

The owners ultimately have the 'final say', if not the power, as they are the employers. They end up having to pay out more money than they would like to keep the players on side, but this makes them more money in the long run.

So, what has currently happened is that the old CBA has expired. The players want better pensions and health insurance, and also better pay because they argued that the league had gotten bigger. There was a arduous debate, as there always is in matters like this, about the exact financial figures; profit margins and so on.

At the end of the day, the players didn't like what they were offered. They walked away. The owners then did the one thing left at their disposal; they told the players they couldn't play for their teams until they signed a new CBA (a 'Lockout').

Who is right and who is wrong is arbitrary, as both parties get pretty good deals out of the NFL league model. It is true that the owners are the ones investing their own money in the league. It is also true that they choose to do so, and that many low paid players don't get the good life others do.

What is clear is that until both sides agree to a new CBA, there is no NFL and hence no football on a Sunday night with Kevin Cable.

Will a deal get done? Yes, of course. Let's not forget that both sides make their money from playing football games, and losing parts of the upcoming season will lose them both money.

Right now, the draft will still go ahead but training camps etc will not. And if a new deal is not arranged, the incoming rookie class will find themselves on the street outside the stadium looking for work. They'd better hope they aren't drafted by Detroit...

Who wins out of the current limbo? Expensive lawyers of course! God bless.

GM

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