NFL Players Association vs. Typical Unions
CAP’s David Madland argues that the ongoing labor dispute between the National Football League and its player’s union demonstrates how much better off non-professional-athlete workers would be if they were unionized.
But the fact that the players are able to bargain on equal footing with the owners is directly relevant to our economic fate. One of the contributing factors to our current economic situation is that most workers—unlike the NFL players—are not able to negotiate on relatively equal footing with their employers as part of a union. That’s why workers’ wages have stayed flat for decades, instead of rising alongside their companies’ profits.
Since 1993, when the basic structure of the current agreement between players and owners was first hammered out—with free agency and a salary cap—league revenues have grown by 10 percent or more in most years, rising from $1.7 billion in 1993 to $7.6 billion in 2008. Before players secured the 1993 contract, they received a far smaller share of league revenues than they have in recent years, taking home 41 percent of revenues in 1991 and 47 percent in 1992.
While the exact division of revenues between players and owners in any new contract remains a point of contention, two points are clear: Players now receive a significant share of the revenues that they help create, and the owners accept that players should.
If only this were the case in the rest of the economy.
Most workers even before the current recession helped their companies by becoming ever more productive but did not share much in the gains. From 1980 to 2008, nationwide worker productivity grew by 75.0 percent while workers’ inflation-adjusted average wages increased by only 22.6 percent. This means workers were compensated for less than a third of their productivity gains.
The problem with this reasoning is that Madland elides a rather fundamental distinction: In professional sports, as in the rest of the entertainment industry, the workers are the primary product being sold. That’s simply not true in most industries.
Unionized workers are, with rare exception, interchangeable. Nobody knows who screwed the motor into their car, inspected the stitching on their blue jeans, or ensured there were precisely two scoops of raisins in their cereal. Those jobs are important and help their firms make a profit. But the individual workers who perform those tasks come and go without the ultimate consumer knowing or caring.
By contrast, most everyone knows who quarterbacks the New Orleans Saints and Indianapolis Colts. Sports leagues market their star players — who command the lion’s share of the player cut of league revenues — and sell themselves as featuring the best of the best. If the League locked out the current players and attempted to play games with replacement players — which happened in 1987 — people would notice the difference. (Interestingly, Saints head coach Sean Payton was a quarterback for the Chicago “Spare Bears” during the three-game stint before a deal was reached and regular players returned to action.)
An NFL franchise employs 53 players (45 of whom may be active on game days) plus up to 8 more on their practice squads. There are 32 franchises, so that’s 1440 regular players plus 256 practice squaders who make a relative pitance. That’s not a lot of labor for a multi-billion dollar a year industry.
Like actors and musicians (who are also represented by unions) the marquee talent get most of the money paid to workers because they’re the draw. While using a different welder on a car frame won’t impact Ford’s bottom line, substituting an attractive brunette from the local community theater for Sandra Bullock, the guy who sings on the street corner for Prince, or Joe from the docks for Peyton Manning would significantly impact ticket sales. Similarly, the bottom dozen players on the roster — who Bill Parcells referred to as JAGs for “Just A Guy” — get the NFL’s version of minimum wage, as do the bit players in films or the session players on music recordings.
In fairness, Madland’s analogy isn’t entirely wrong. Sports owners have been forced by labor laws and court decisions to bargain in good faith with their players. It wasn’t all that long ago that even superstar players had to accept whatever the boss deemed fair. And the various player’s unions have negotiated better working conditions, pension plans, injury settlement practices, and minimum scales for rookies and veterans. Further, the ability to negotiate these things collectively rather than on a player-by-player basis has doubtless made some things easier for owners, too.
But the United Auto Workers will never have the power of the NFL Players Association so long as it exists mostly as a way to negotiate for unskilled and semi-skilled workers.
(It’s worth noting that there are all manner of other differences between the sports business and, say, manufacturing — including the ability to control supply, having most of the revenue streams guaranteed years in advance, and probably all sorts of things I’m forgetting or simply don’t know. But that’s tangential to the point of this post.)
Link via Matt Yglesias