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April 1999, Vol. 122, No. 4
Labor relations in basketball: the lockout of 1998-99
Paul D. Staudohar
Until 1998, the National Basketball Association (NBA) and its players were unique in one major respect: while other major team sports—baseball, football, and hockey—were plagued with work stoppages, basketball had none.1 Indeed, the sport was often cited as an example of good labor-management relations. What made the record even more remarkable is that basketball is the quintessential big-money game. There are ample riches to divide up between owners and players. Ticket prices to NBA games are the highest in sports, and the league has enjoyed strong financial support from television. The minimum cost of staging an event is far smaller in basketball than in other team sports that have larger rosters. 2 The combination of high revenues and relatively low overhead costs brought NBA salaries to the lofty average of $2.6 million, the highest in sports.
The tranquility ended when the 1998–99 season was truncated by a 202-day lockout. This article examines the background of basketball labor relations, why the lockout occurred, its key issues, the dynamics of the bargaining process, and the eventual settlement. The saga of the league and its union is particularly interesting in that what was generally regarded as a successful structure for dividing up revenues became unglued. Besides the structural model and contested issues, an important aspect of the dispute was the negotiators and their relationships, not only with each other, but also with the people they represented. The clash of personalities and attitudes, so familiar from other sports, came at last to haunt basketball negotiations.
This excerpt is from an article published in the April 1999 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 There was a lockout of NBA referees by the league late in 1995 that lasted a month, but did not interrupt play because the league utilized replacement referees.
2 Roger G. Noll, "Professional Basketball: Economic and Business Perspectives," in Paul D. Staudohar and James A. Mangan, eds., The Business of Professional Sports (Urbana, IL, University of Illinois Press, 1991), p. 18.
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