Collective Bargaining Agreements in Sports Leagues & Their Legal Scope
Owners of professional sports teams wield substantial power both individually and as a group. To curb their power, professional athletes in most of the major American sports leagues have formed unions that devise collective bargaining agreements to protect the rights of athletes. These instruments provide rules that both owners and players agree to follow. They also affect the conduct of other people involved in the league, such as player agents and league management. Player associations (unions) have evolved in virtually every major American sport, ranging from the NFLPA in football and the NBAPA in basketball to the MLBPA in baseball and the NHLPA in hockey. Collective bargaining agreements are renegotiated at intervals of several years.
While the earliest collective bargaining agreements focused on raising wages and creating pension plans, modern collective bargaining involves a much broader range of issues. Some of the most notable issues include:
Revenue sharing between teams and players
Salary caps and salary structures
Rules for transfers (trades), drafts, and free agency
Certain issues are mandatory during the collective bargaining process, which means that owners and players must address them in negotiating an agreement. In general, mandatory issues involve salaries, hours, and work conditions. Among other things, owners and players will determine how many games will be played each season and whether player contracts are guaranteed by the league. They also must address base salaries, the process for transferring players, disciplinary measures, player grievances, medical benefits, retirement plans, and access to the personal files of players.
Non-mandatory issues, which are known as permissive issues, also may be negotiated during the collective bargaining process. However, either side can refuse to address these issues without jeopardizing an agreement.
Lockouts and Strikes in Sports Leagues
When the collective bargaining process fails, lockouts or strikes can result. While a lockout occurs when owners refuse to allow players to access team facilities, a strike occurs when athletes refuse to play. Lockouts and strikes can have devastating financial effects on sports leagues. For example, the 2004-05 NHL season was canceled completely when collective bargaining negotiations broke down.
More recently, the 2011-12 NFL season fell into jeopardy when players and owners disagreed about expanding the regular-season schedule and altering revenue structures, salary caps, player health benefits, and free agency rules. For much of the 2011 offseason, players could not use team facilities or meet with their coaches while negotiations stalled. However, the NFLPA and the owners reached a compromise that increased retirement benefits for players in exchange for changes to the revenue sharing structure that benefited owners. During the same year, the fourth lockout in NBA history resulted from disputes over salary caps and adjustments to the revenue sharing structure. This delayed the start of the regular season and ultimately reduced its length.
Recent Developments in Collective Bargaining Agreements
As the 2020s approached, several major collective bargaining agreements were set to expire. These included the MLB collective bargaining agreement, which expired on December 1, 2021 without a new agreement in place. Negotiations extended into March 2022 before a new agreement was signed, forcing the postponement of the 2022 season and the cancellation of games. Some of the notable changes included increasing minimum salaries, expanding the postseason, and setting up a bonus pool for the top young players who are not yet eligible for salary arbitration.
By contrast, the NFL and NHL extended their collective bargaining agreements in 2020. The NFL extension will last through the 2030-31 season, while the NHL extension will last through the 2025-26 season. Both extensions were finalized well before the existing agreements expired. The new NFL agreement brought several meaningful changes to the league, such as a reduced preseason, a lengthened regular season, an expanded playoff field, and increased roster sizes. The new NHL agreement did not bring as many changes that will be noticed by fans, although it allowed players to participate in the next two Olympics and increased minimum salaries, maximum entry-level salaries, and the playoff bonus pool.