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 )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 1. Salaries, contracts and profit sharing are often issues that create conflicts between sports leagues and players unions ISSUES 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: – The screen Actors Guild (SAG) AFTRA The American Federation of Television and Radio Artists (AFTRA)

THE END Any Questions???????