• The impact of unions on the
sport/event industries
Reserve clause
Reserve clauses were formerly placed in
a professional athlete's contract that
reserved for the club the exclusive right
automatically to renew the contract and
that bound the athlete to the club until
retirement or until the athlete was
traded or released
Free Agency
• A free agent (player) that is eligible to sign
with any club or franchise. (they are not under
contract)
• Players in some instances can also be under
contract but who is allowed to solicit contract
offers from other teams. In some
circumstances, the free agent's options are
limited by league rules.
Athlete and Entertainer Issues (continued)
• Free agency allows players
to explore options of
moving to another team
with little or no financial
penalty.
– Higher player/personnel
costs result from bidding
wars for certain players.
• Salary caps limit the
amount a team may spend
on contracts. (a max.
amount that a team can
spend on players salaries
– Less profitable teams are
protected from continual
losses.
– A luxury tax is paid by teams
that exceed the salary cap in
the NBA and is split between
less profitable teams.
Players’ unions
A union for professional players that generally
representation the players interests and will do whatever is
necessary to assure that the rights of the players are
protected
Responsibilities
• Represents all players in matters concerning wages, hours and
working conditions and protects their rights as players
• Assures that the terms of the Collective Bargaining Agreement
are met
• Negotiates and monitors retirement and insurance benefits
• Provides other member services and activities
• Provides assistance to charitable and community organizations
• Enhances and defends the image of players and their profession
on and off the field /court etc.
traditional labor unions
Who are they?
• An organization of wage
earners or salaried
employees for mutual aid
and protection and for
dealing collectively with
employers; trade union.
What Do they do?
• lobby for better rights, wage
and benefits
• bargain with the employer;
traditional labor unions
Goals
• Explain the need for salary
caps
• Describe the financial and
public relations impacts that
strikes may cause to a sport
• Discuss owner-labor
relations and the impacts of
labor unions
Organized Labor
• Players associations
– The labor unions of athletes
in a professional sports
– They function the same as
unions in other industries
– The conflicts are often about
salaries, contracts and profit
sharing.
– The unions try to negotiate
for higher salaries, better
contracts and more profit
sharing for players
Players associations Con’t
• On the other hand, the
sports leagues
represent the owners
and managers and their
goal is to control costs.
Team owners and
individual managers are
represented by sports
leagues rather than by
players associations.
• Sponsoring
organizations are
businesses or other
groups that pay to
association their names
or products with a
sporting event
Collective Bargaining
(continued)
• Collective bargaining gives players the right to organize,
use the agent of choice and protect themselves. Also
includes:
–
–
–
–
–
–
–
–
A minimum salary
Player’s rights
Medical disability insurance
Labor rules
Length of contract
Restrictions of certain activities or behaviors.
Rules for agents
Player and team travel (CB Explained )
Difference between
players unions
and
traditional unions
Unlike players unions, traditional unions are not able to
negotiate on relatively equal footing with their
employers as part of a union. That’s why workers’
wages have stayed flat for decades, instead of rising
alongside their companies’ profits.
What are some issues that players’ unions deal with?
ISSUES
ISSUES
• 1. Salaries, contracts and
profit sharing are often
issues that create conflicts
between sports leagues and
players unions
• 2. When negotiations between
a players union and the
owners organization cannot be
reached, the players might
vote to determine if they
should go on strike.
• This leads to no revenue being
generated, employees not
working, and a decrease in
consumer spending.
What is collective bargaining?
• Collective bargaining agreement
(CBA)
– Negotiated by the players association
– Covers all league players
– Includes salary ranges contract length
and operating rules
• When a professional
athlete agent (union)
engages in negotiating
salaries, playing
conditions and
contracts terms as a
single unit.
Collective bargaining
can be used in most sports with the
exception of Major League Baseball.
• Excludes MLB because of the Sherman
Antitrust Act ruling.
• Gives players the right to organize, use the
agent of choice and protect themselves.
• Collective bargaining agreements are
agreements between players’ associations (or
unions) and team ownership/management.
Owners versus Players
• When negotiations
between a players
union and the owners
organization cannot be
reached the players
might vote to
determine if they
should go on strike
• Everyone looses out
during a strike
Entertainment Labor
Unions that represent
celebrities:
AFTRA
– The screen Actors Guild (SAG)
• The American Federation of
Television and Radio Artists
(AFTRA)
Any Questions???????
THE END