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Labor unions, salary caps and work stoppages, oh my!

Labor unions, salary caps and work stoppages, oh my!. HONR101: History and Culture of Basketball August 31, 2011. The NBA labor union. In 1954, the NBA had no health benefits, nor pension plan, nor minimum salary, and the average player’s salary was $8,000 a season

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Labor unions, salary caps and work stoppages, oh my!

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  1. Labor unions, salary caps and work stoppages, oh my! HONR101: History and Culture of Basketball August 31, 2011

  2. The NBA labor union • In 1954, the NBA had no health benefits, nor pension plan, nor minimum salary, and the average player’s salary was $8,000 a season • Bob Cousy (Boston Celtics) helped found the National Basketball Players Association (NBPA)

  3. The NBA labor union • It is the oldest trade union of the 4 major North American sports leagues • Salaries did start to increase over the next decade, but the NBA didn’t officially recognize the NBPA • In 1964, the owners finally recognized the trade union when the players threatened to walk out of the NBA All-Star game

  4. The nba Salary cap • The salary cap was agreed to by players and owners in 1983 • It is believed to be the first salary cap in any major professional sports league in the U.S. • Since there are rules and exceptions that allow a team to spend over the salary cap, it is called a “soft cap” • The NFL and NHL use a “hard cap”, which means teams are not allowed to exceed the salary cap

  5. The NBA Salary Cap • The chart below shows the team salary cap (in millions of dollars) since the inception of the salary cap • The cap was $58 million last year (2010-11) • Last year’s payrolls: http://hoopshype.com/salaries.htm

  6. Collective bargaining agreement • The Collective Bargaining Agreement (CBA) is the contract between the NBA (the commissioner and the 30 team owners) and the players (NBPA) • It dictates rules of player contracts, trades, the NBA draft, revenue distribution, the salary cap, etc.

  7. NBA Lockouts • In 1995, the NBA experienced its first work stoppage • The owners imposed a lockout on July 1 • An agreement was reached on September 12 • Because the lockout occurred over the summer, no games were missed • A second lockout lasted just three hours in 1996 • Again, a deal was reached before the season started, so no games were missed

  8. NBA lockouts • The 1998-99 season was the league’s third lockout • Until that time, the NBA was the only major U.S. sports league that had never lost a game due to a work stoppage • Owners wanted changes to the salary cap and a ceiling on individual player salaries • According to the NBA, 15 of the 29 teams suffered financial losses the previous season

  9. NBA lockouts • The 1998-99 season did not begin until January 20, 1999 • The agreement included maximums for player salaries and a pay scale for first-year players • The season was shortened from 82 to 50 games per team and the All-Star Game was cancelled • After the lockout, TV ratings and ticket sales declined and remained below pre-lockout levels in subsequent seasons

  10. NBA lockouts • The fourth NBA lockout began on July 1, 2011 • The league claims that it is losing $300 million per year and that 22 of the 30 teams lost money last season • The league proposed to reduce 40% of players salary (around $800 million) and set a hard cap of $45 million • The NBPA disputes the league’s data

  11. NBA lockouts • In the league’s most recent proposal, a “flex cap” would be introduced with a team payroll of $62 million • Players offered to cut $500 million over the next five years • The owners proposed to cut salary by $2 billion annually over the next 10 years • On August 4, the NBPA union director Billy Hunter said he thinks the entire 2011-12 season will likely be cancelled

  12. NBA lockouts • BostjanNachbar, former NBA player and current member of the Slovenian international team, recently said: “It's possible that because of [the lockout] basketball won't be the biggest team sport at the Olympics. . . . It is extremely bad for growth of global basketball. In recent years basketball has been on the upside, and the lockout definitely kills the momentum. Europe has its alternative in Euroleague, and many fans might turn to that league to satisfy the hunger for basketball, but I am not sure how other parts of the world will cope with not seeing their stars on the court. Will they choose to follow a different sport because of that? Probably.”

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