HRM / OB Case Study

Collective Bargaining at NBA: Who scores the basket?

OR

Abstract:
National Basketball Association (NBA) established in 1949, and a constellation of 30 independent teams, was one of the most successfully run professional sports organisations in the world. It still is, except for the losses that few of its 30 teams are making. The National Basketball Players Association (NBPA) and NBA, better known as The Union and The League, had fought over the issue of revenue sharing between NBPA and NBA, most of the times. After the lockouts and strikes in 1990s, which resulted in the loss of millions of dollars, both NBA and NBPA had been very careful in maintaining a good relationship. To negotiate the revenue sharing NBPA continuously engaged in collective bargaining with NBA and the decisions were made legal through Collective Bargaining Agreements (CBA). The negotiation process between NBA and NBPA resulted as a major success with the CBA of 1999. In 2005 too, NBA and NBPA avoided another lockout by signing another CBA. However, the global recession of 2008 affected the sports business too, with revenues spiralling down landing the smaller teams of the league in a financial catastrophe. With owners refusing to extend the current CBA, expiring in 2011, even for another year, both sides have already started talks regarding the possibility of a new CBA. Though both the NBA and the NBPA are positive about reaching an amicable solution, some experts opine that another lockout is looming over the NBA.

The case discusses collective bargaining and its use in NBA. It also discusses whether collective bargaining can affect the interests of the organisation in a negative way. The case also poses a question – Can collective bargaining be effectively used across organisations as a negotiation tool to protect employee interests?

Pedagogical Objectives:

• To understand the business model of NBA and to debate and discuss on the organisational imperatives of such a model
• To have an understanding of the underlying reasons for the stand-off between NBA and NBPA and establish the merits and demerits of each party’s argument
• To discuss the positive and negative effects of collective bargaining citing the example of NBA.

Keywords : Collective bargaining, National Basket Association , National Basket Players Association , NBPA, NBA, Collective bargaining Agreements, CBA, The Union of the League, Unions, Teams of NBA