It has been said that life is all about leverage. While that may be an overstatement, leverage is certainly the most important factor in labor negotiations.
The current labor squabbles between the NBA owners and players will eventually boil down to who has more to lose. And when owners and players—no matter what the sport—go toe-to-toe, the owners always have the greater bargaining power.
But in the case of the NBA lockout, the players have an ace up their sleeve that gives them unprecedented negotiating power against the owners.
The NBA lockout is going to be particularly nasty because of how truly broken the financial system is that the league has been operating under for several years now. It has painted itself into a corner with obscene salaries, guaranteed contracts and inflated team values.
The owners need to demand drastic changes to the way the league operates, because for them it’s a business venture, and if the numbers don’t add up to profits year in and year out then they will simply walk away from their investment.
If you own a business, and you’ve exhausted all ways to make it a profitable venture, you have nothing left to do but eat the loss.
The owners don’t want to do this. They don’t want to see their teams no longer have any value, but if they come to the conclusion that they’re only going to be losing more money in the future then the doors will close and the lights will go out.
The problem again comes down to leverage. If the league can’t find a way to make itself profitable, then the owners can walk away and still be rich. But what do pro athletes do if they can’t make money playing their sport anymore? What happens when they have to go from celebrities to regular Joes practically overnight?
We learned this lesson with the NHL labor negotiations a few years ago. The players all said the same things the NBA players are now. They said that they were prepared for a long-term standoff, that they weren’t going to back down.
The problem came when after losing an entire season, the hockey players had to face the concept they might not ever be able to make a living playing hockey again.
They started out by making money through things like public appearance fees and other types of work that only come their way because of the celebrity that being a pro athlete has provided them. But they quickly realized that if they weren’t playing hockey anymore there would be no more reason for anyone to pay them just to show up at their waffle house.
What they had to consider was the very real possibility that they would have to settle into a life as a regular person, that they would have to get a regular job like everybody else.
Once that reality hit them, they quickly realized they would rather take a pay cut from $4 million a year to $2 million a year to play hockey than to have to sit in a cubicle or join a construction crew for $35,000 a year.
I’ve done both of those jobs and can tell you without hesitation that being a professional athlete—at pretty much any income level—would be a better deal. I also know what it’s like trying to find work in this economy, and the players know they don’t want to have to enter the job market right now.
But the NBA players actually have an alternative. There are other places in the world that will pay them good money to play basketball. Some of the NHL players could have played professional hockey overseas, but the money just isn’t the same.
The NBA players, especially the superstars, will have offers on the table for them to make substantial amounts of money to play for teams overseas.
If the talent comes, then the money will follow. In today’s age of Internet TV, DVRs and games on your cell phone, basketball fans will be able to find their favorite players, whether they’re playing in Miami or Madrid.
It’s not the number one option if you’re a current NBA player. You would have to move away from all your friends and family to go live in a place where you likely don’t speak the language and where you are unfamiliar with the culture.
But as hard as it would be, United States players have been playing basketball in other countries for years now, so we know it can be done.
Most importantly, it gives the players a negotiating tool they can use against the owners. They can simply threaten to walk away and play for someone else.
It still doesn’t mean that they have all the leverage; the owners will still get their way because they always do. They know that in the end they will still be rich, and if the numbers don’t make financial sense, then they’ll just close up shop.
But if the players prove to the owners that they’re willing to take their trade overseas then they will be able to get a better deal in the long run.