Where Do They Go From Here: Ending the NBA Lockout

The first two weeks of the 2011-12 NBA season are history, as NBA commissioner David Stern canceled them after the NBA and NBPA were unable to reach a labor resolution by October 10.

The two sides have been attempting to negotiate an end to the NBA-imposed lockout, which began on July 1.  However, the parties have arguably reached an impasse in negotiations over issues including how to divide basketball-related income (“BRI”) and whether to impose a hard salary cap.

What options does each side have at this junction?

1.  Keep Negotiating

While not encouraging for fans seeking for a quick fix to save the NBA’s 82-game season, arguably, the parties’ best option would be to maintain the status quo and continue negotiating.

Save for those owners unprepared to take the financial hit of losing a significant number of games and those players who didn’t heed the advice of their financial planners over the past two years and put away for the lockout’s rainy days, both parties appear to be relatively unified in support of their desires in a new collective bargaining agreement.  Reports have noted the fact that there have not been any players who have voiced anger with the NBPA’s negotiating strategies.  This claim is bolstered by the fact that it was not players, but agents, who led recent calls to decertify the NBPA and move forward with antitrust remedies.  Although owners are divided as to how to split television revenue amongst themselves, they have likewise presented a unified front during negotiations.

Each side’s respective unity demonstrates its strong negotiating power.  A party’s negotiating power largely determines how successful it will be in achieving the deal it seeks.  There’s an old saying, that a settlement is effective if both parties walk away from the table unhappy after signing it.  Here, neither party is backing down from its demands for a new collective bargaining agreement.  Thus, this signals that neither party is unhappy with its bargaining power.  Given this, it is arguable that the parties should keep negotiating in an attempt to corner the other into an uncomfortable bargaining situation.  Once one party begins making concessions, that will likely force the other’s hand into making concessions.

In choosing to continue to negotiate,  both sides will likely hope that the National Labor Relations Board (“NLRB”) will rule on each of their complaints filed with the NLRB.  Given that negotiations appear to have reached a standstill, it is possible that a NLRB decision is forthcoming, since the NLRB has been known to issue its rulings at strategic times during labor negotiations.  A favorable ruling by the NLRB would likely tip the negotiating balance in the favor of the party ruled for.  This windfall could be the force necessary to break the negotiation impasse and lead parties to agreeing upon a new collective bargaining agreement.

The problem with choosing this strategy, is that it will take time to see formative results.  In recent weeks, the NBA and NBPA have met numerous times and from reports, it appears that little progress has been made between the parties in terms of agreeing on key issues like BRI and what type of salary cap to adopt.  As players begin missing paychecks and owners start losing revenue from games, it is likely that one or both sides will feel inclined to either budge from their negotiating tactics or search for alternative ways to end the lockout.

2.  Decertification

On the day the lockout began, I wrote about why the NBPA should wait until November (if at all) to decertify as a union.  Decertifying the NBPA would allow the players to pursue antitrust remedies.  Likely, if the players went this route, the first thing their lawyers would seek to do, is enjoin the lockout (as the NFL players did earlier this year upon decertifying the NFLPA).

However, although I previously suggested that the NBPA wait until November to decertify (since that is when players would miss their first paychecks, thus disturbing the status quo), if the players want to pursue this option they may want to act sooner rather than later.

This is due to the fact that in August, the NBA filed a lawsuit seeking in part, declarations that the lockout is lawful and immune from antitrust attack.  The NBPA filed a motion to dismiss this lawsuit.  The parties will make oral arguments in support of their respective position before a judge on November 2.

While it would arguably be an unscrupulous legal move, if the NBPA has any real interest in decertifying, it may want to do it before oral arguments are set to be heard.  It is unknown how the judge will rule.  There’s always a possibility that the judge will side with the NBA and declare the lockout lawful and remove antitrust remedies from the players’ arsenal.  This would in effect force the NBPA to continue negotiating with the NBA to end the lockout, or hope for a favorable ruling by the National Labor Relations Board (“NLRB”).

In contrast, decertifying will not ensure that the bulk of the season will be saved.  Fans will remember that a resolution to the NFL lockout came over one month after the NFLPA decertified.  Decertification entails a legal battle and as such, requires time in order to achieve a remedy.  In deciding which road to travel to end the lockout, the NBPA must be cognizant of the time and legal costs associated with decertification.

Whichever path the parties choose, one thing is certain:  Fans want a season sooner rather than later.

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