Midterm Presentation with notes.

Point/Counterpoint

Pro Sports Strikes Are Caused by Greedy Owners

This exercise contributes to:

Learning Objectives : Show how individual differences influence negotiations; Assess the role of third-party negotiations

Learning Outcome : Describe the nature of conflict and the negotiation process

AACSB : Written and oral communication; Reflective thinking

Point

I’m as sick as anyone of the constant strikes, lockouts, and back-and-forth negotiations between sports teams and the players’ unions. Of the major pro sports leagues, Major League Baseball (MLB) is the only one not to have had a strike since 1995 – and it had eight in its history. You’ve got to wonder why this keeps happening. Here’s why: owners’ greed knows no limit.

In nearly every recent strike or lockout, the main issue was money and how to divide it.

When the National Hockey League (NHL) locked out the players during the 2012-2013 season, the owners were the instigators. They wanted to reduce the players’ share of hockey revenues. They wanted to eliminate salary arbitration. They wanted to introduce term limits to contracts. They wanted to change free-agency rules and eliminate signing bonuses. On a philosophical level, some of these proposals are interesting because they reveal that owners want to restrict competition when it suits them and increase it when it benefits them.

While the owners were whining about the unfairness of long-term contracts, the Minnesota Wild’s owner Craig Leipold, a noted negotiations hawk, signed Zach Parise and Ryan Suter to identical 13-year, $98 million contracts. Contracts like these suggest that owners want the players’ union to save them from themselves.

Perhaps some of this would make sense if the owners were losing money hand over fist, but that is hardly the case. The NHL has three teams worth over $1 billion each, and few are worth less than $200 million. The owners aren’t hurting either. Most are millionaires many times over. Los Angeles Kings owner Philip Anschutz is reported to have a net worth of $12 billion.

Forbes reports the average NFL team is now worth over more than $1.43 billion and the Dallas Cowboys are worth $3.2 billion; even low revenue and poorly run teams make money. Take the Jacksonville Jaguars. Wayne Weaver paid $208 million for the team in 1993. It has never made it to the Super Bowl and is almost always an also-ran in its division. Did the team’s ineffectiveness really cost Weaver? He sold the club for $770 million in 2012.

In essence, what we have are rich owners trying to negotiate rules that keep them from competing with one another for players. It’s a bald-faced and hypocritical attempt to use their own kind of union to negotiate favorable agreements, all the while criticizing the players’ unions.

Counterpoint

Major league owners are an easy target. But they have the most to lose from work stoppages. It’s the players and their unions who push the envelope.

It’s true that most major league players are well rewarded for their exceptional talents and the risks they take. It’s also true that owners who are able to invest in teams are wealthy—investors usually are. But the fault for disputes lies with spoiled players—and the union leaders who burnish their credentials and garner the limelight by fanning the flames of discontent.

On this latter point, give all the credit in the world to the union negotiators (paid millions themselves), who do nothing if not hawk publicity and use hardball negotiating tactics. Take the NHL players’ union boss Donald Fehr. For a recent “negotiation” set to begin at 10 A.M., he arrived at 11:15. At exactly 12:00, he announced he had a lunch meeting uptown and left.

As for the players, pro athletes are entitled almost by definition. For example, one recently retired NFL player and union representative, Chester Pitts, was commenting about how he had to settle for an $85,000 Mercedes instead of a $250,000 car. Well, we all have to make sacrifices. One rookie, Jets’ quarterback Geno Smith, fired his agent after signing “only” a four-year contract for roughly $4.99 million. Smith called the contract “hard to stomach.” I see a future in the player’s union for this guy.

Do we really need labor unions for workers whose average salaries are $2 million (NFL), $2.58 million (NHL), $3.82 million (MLB), and $4.9 million? NHL clubs spent 76 percent of their gross revenues on players’ salaries and collectively lost $273 million the year before the most recent lockout. It’s not much better in the NBA, where many teams lose money. Take the Dallas Mavericks, who have rarely made money since 2002, despite playing in the fourth-most populous metro area and winning the NBA title in 2011.

It’s easy to argue that major league sports have an unusual number of labor disputes, but that’s not necessarily accurate. Did you hear about the 2015 largest strike of oil refinery workers in decades or the ongoing worldwide strikes by low-paid workers in the fast-food industry? Somehow these strikes don’t always make the news or our collective consciousness as much as sports strikes. Sports strikes interest us, but we shouldn’t fall into the trap of blaming these on the owners.