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NBA Lockout

Two weeks of the NBA season have already been cancelled and the entire month of November stands to be scrapped if the players and owners cannot reach an agreement soon. The main issues at hand are revenue sharing, salary cap and the types of contracts teams can offer their players. While it is the shared issues of players and owners that must be overcome in order to move forward, the individual options open to each party are what truly interest me.
Recently, some NBA players (most notably the New York Knicks’ Amar’e Stoudemire) have brought up the idea of a new players‘ league, completely separate from the NBA. In addition, many of the league’s top stars have turned to the international leagues and summer pro-am leagues in the wake of the lockout.
On the other hand, the owners’ are examining their own options. Many of the leagues owner’s do not live paycheck to paycheck and are thus less inclined to strike the most immediate deal possible. They are content to hold out and use every last drop of leverage in order to increase their revenue share in the new collective bargaining agreement.
The current situation between players and owners reminded me a lot of our study on network exchange experiments. Each side of the debate is looking at how it can either split the revenue brought in by the NBA or at what outside options are available. If  either side believes it has more to gain by not coming to a given agreement, the lockout will persist.
In addition, the lockout also provides us with a good example of how power can be unevenly distributed within a network. Within the Player’s Union, every player stands to gain or lose a significant amount of money based on how contracts can be structured under a new agreement; however, only the leagues most widely known players have a hand in the bargaining. The reason for this is that no one will care if the 12th man of a team refuses to play because of the new CBA. On the flip side, if a Kobe Bryant or Lebron James were to not participate, many fans would be uninterested in the game and thus the league would lose money.
It is very interesting to see the theories discussed in class played out in real life. The NBA lockout in particular offers a great example of how, even something as complex as creating a new set of contract and revue sharing laws for the NBA really boils down to the basic question, how can I benefit the most?


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October 2011