Big Time Lose-Lose Negotiation
A quick word first
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Major league baseball is in a mess. Two minutes after the current Collective Bargaining Agreement (CBA) expired on December 1st, the team owners “locked out” the players. There will be no contact between teams and their players, nor will there be any games until the parties reach a new CBA.
It’s a classic game of chicken with each side holding firm, waiting for the other side to buckle. Players won’t be paid and the teams won’t get any income from ticket sales or television revenue. That lost income for players and teams will never be recovered. What else? Oh, baseball viewership is declining fast. If the season is canceled, the fan base will continue to wither.
This isn’t a novel problem. Between 1972 and 2004, baseball has had eight strikes and lockouts, all of them costly, some of them enormously so. There have also been lockouts and strikes in pro basketball and hockey.
Last week my colleagues David Lax and Jim Sebenius proposed a solution in their article for the Boston Globe, “How to save Major League Baseball from itself,” They called for a “virtual lockout” (or call it a “virtual strike”). Play all the games, they advised, and televise them, as well. Pull in all that revenue but don’t distribute it to the parties.
Instead, put it in the bank and let the fund grow and grow. The bigger the pot gets, the greater will be the incentive for the parties to cut a deal. It doesn’t matter how the pot is ultimately divided: 50-50, 90-10, or 10-90. Whatever the split, everyone would be better off than they would be with canceled games and no revenue.
To tighten the screws, David and Jim suggested “a devilish twist,” as they put it:
“Let the pot grow as more of the season is lost, but for every month that passes with no contract agreement, distribute a meaningful percentage of the total — say, 10 to 20 percent — to a nonprofit such as Little League or the Special Olympics. As each deadline approaches and the pot threatens to shrink, settlement pressures will further ratchet up.”
This is not a new idea. Jim and I co-authored a New York Times article more than two decades ago proposing the same plan when the National Hockey League owners and the players’ union were deadlocked. Nobody picked it up and the entire season was lost.
Maybe the parties will come to their senses this time. (David and Jim believe it’s a real possibility, but history suggests otherwise.)
There are three big obstacles to agreement:
First, at any given moment, the cost of waiting another day to see if the other side buckles does not feel that high. (But those days add up.)
Second, both sets of parties are well off. Some are ultra-rich. They may feel that they can run the risk of stalemate. (There may be a competitive dimension to this, as well.
Finally, there likely are strong differences within each group. Some teams are very profitable, others not so much. Likewise, there are players rolling in dough and others, who are well paid, but have little in the way of savings. It’s hard to reach general agreement if there’s no consensus in either group.
I like baseball a lot, the Red Sox in particular, so hope David and Jim’s optimism is justified. History suggests otherwise, though.
Housekeeping
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