Game Theory: Midterm Project Team Playadize: Michael Dansbury, Bryan Mao, Cang Quach, Jackie Tay 1 Millionaires vs. Billionaires – The 2011 NFL Lockout "I'm sorry for our fans. I'm sorry for the people who love football. I'm sorry for those who love their teams and take pride in the ownership of their teams" -DeMaurice Smith NFLPA Executive Director Overview In 1993, the NFL entered a new era of collective bargaining between NFL owners and athletes. Fresh off the league-wide strike and union decertification in 1987, both parties agreed to enter into a new collective bargaining agreement outlining the wage scale and rights of parties involved. The agreement was extended five times since 1993, but in 2008, owners exercised an option to opt of the current agreement in 2011. Now, with no agreement in place, the 2011 NFL season is in jeopardy as owners are prepared to “lockout” players if no resolution reached by the CBA deadline, resulting in a halt the upcoming season. History The NFL’s Players Association (NFLPA) was formed in 1956 as a union for players in the National Football League. NFL legends such as Don Shula and Norm Van Brocklin lead the NFLPA drive fighting for rights such as a league wide minimum wage, team paid for equipment and sustained salary paid through injury periods. Early on however, the NFLPA was mostly ignored my owners because most threats issued by the NFLPA were not credible. That would all change when the United States Supreme Court ruled in Radovich v. National Football League, 352 U.S. 445 (1957) that, unlike Major League Baseball, the National Football League could not be treated as a single entity but rather as separate teams subject to antitrust laws. That meant standards like a league wide salary cap would be considered collusion between completing entities, thus illegal. Even though the NFLPA gained some traction with the Supreme Court ruling, the organization was divided over whether it should act as a professional association or a union. Over issuing years, the NFLPA used the threat of antitrust litigation to win concessions such as better wages and benefit. In 1968, owners finally recognized the NFLPA’s power and agreed to enter into the league’s first collective bargaining agreement. Even with an agreement in place, the scales still tipped heavily in favor of the owners. Over the course of the next twenty years, the NFLPA would duke it out with owners over heavyweight items such as wage compensation, increased benefits and free agency. In efforts to gain more rights, the NFLPA moved to strike in 1987 but that action was short lived as players did not have the financial stability to support themselves in the absence of owner pay and lack of NFLPA funding support. The following year, the NFLPA moved to decertify as a union, triggeringGame Theory: Midterm Project Team Playadize: Michael Dansbury, Bryan Mao, Cang Quach, Jackie Tay 2 antitrust infringements on the league. With the union decertified, players could individually sue the league, challenging its free agency rules as an unlawful restraint of trade. The players ultimately prevailed in court, and a collective bargaining agreement was fashioned mirroring many of today’s current deal terms. The Collective Bargaining Agreement (CBA) Defined by United States Department of Labor, “collective bargaining is the method whereby representatives of employees (unions) and employers negotiate the conditions of employment, normally resulting in a written contract setting forth the wages, hours, and other conditions to be observed for a stipulated period (e.g., 3 years). The term also applies to union-management dealings during the term of the agreement.” Under this definition, the NFLPA players don’t have the right to negotiate their own contacts outside of the union. When the NFLPA petitioned to the National Labor Relations board to become certified union in the late fifties, it gave them a government granted monopoly in collective bargaining with the NFL. After the NFLPA issued a player strike in the summer of 1968, owners briefly held a lockout, but eventually agreed into entering a collective bargaining agreement which resulted in small additional concessions reached by players. In the late eighties, NFLPA union decertification led to a significant win for players as the courts sided with players and the era of a “fair” CBA was born. Since this time, the collective bargaining agreement has been revisited several times in efforts to bring about a fair division or wealth and rights. It has been extended five times as revenues soared, the league expanded to 32 profitable teams, and new stadiums were built across America to house them. Participants in the Game Owners: In the words of owners, they are looking to “take back their league” by forcing a more favorable deal down the throats of the players. Owners state that high-risk investments made on new stadiums and other capital expenditures have increased over the years and more money for operating expenses is need. Owners were not pleased with the extension back in 2006 and believe that the former NFL commissioner, Paul Tagliabue, was in a weak moment as he preparing to step down from his role of commissioner and 17 year stint of unprecedented labor peace. Players: They want to keep the CBA in its current form. They say if it ain’t broke don’t fix it. The league is generating an insane amount of revenue and is more popular than ever before (The past two Super Bowls rank No. 1 and No. 2 among most-watched TV programs in U.S. history). They understand that rising overhead costs might justify an increase in the owners’ pie, but aren’t willing to buckle until they have a complete audit of owners’ books. Other Stakeholders: Parking attendant, the beer guy, the concessions staff, security, ticketing, practice squad, TV Networks, restaurants/bar owners. (12 billion dollars generated revenue by secondary operations, Fantasy Football at 5 billion alone).Game Theory: Midterm Project Team Playadize: Michael Dansbury, Bryan Mao, Cang Quach, Jackie Tay 3 Key Issues League revenue division: Revenues (annually 9 billion dollars), including what portion owners should receive up front to help cover costs such as stadium construction and improvement. Under the old deal terms owners received $1 billion off the top and players/owners split the remaining proceeds (8 billion dollars at 60/40 respectively). Currently