Best Practices for Sport League CBAs

Abstract

Across professional sports, players typically unionize and collectively bargain with team owners to construct an agreement as to how revenue will be shared and how the league will operate. These agreements largely dictate all decisions the league makes or will be able to make until it expires, and an agreement is either renewed or renegotiated. This paper will attempt to analyze what byproducts of collective bargaining amongst the players and owners affect long term potential for profit. By identifying league strategies that increase total revenues, both parties can mutually benefit from the shared growth of their organization. Understanding what provisions and strategies are mutually beneficial or harmful may allow negotiation to shift away from owners and players lobbying against each other and towards cooperation for mutual gain. The potency of these agreements makes prudent an evaluation of popular mechanisms and ideas.A broad array of aspects of collective bargaining will be considered such as salary cap structure, drug enforcement, revenue distribution, contract restrictions, and scheduling. Mechanisms will be evaluated weighing their resulting incentive structures, financial costs, observed revenues, fan approval, and theoretical sustainability. Clarity, prominence, and sport-transcendence will be considered individually for each structure in determining their relationship to long term value creation. Each mechanism or trend considered will be identified and explained in the first section of this paper before a later evaluation of benefits, costs, and important considerations for implementation.