Levmore Sees Parallels in NBA and Eurozone Negotiations
The National Basketball Association's contract talks and the eurozone's negotiations illustrate a common problem — brinkmanship in bargaining.
In the NBA case, it might seem puzzling that so much easy money can be lost in a game of chicken. Everyone loses during a business shutdown. The NBA players suffer particularly heavy losses because they have relatively short working lives. A lost season might cost $1 billion to $2 billion, of which the players probably lose $500 million. Essentially, the players say to the owners: "We are arguing over $100 million" — what's at stake in the dispute over sharing basketball-related income in a new contract — "and if we don't get that we will lose five times that, but you will lose even more."
A legal solution might end this and other labor impasses by barring strikes and lockouts, while requiring that when a deal is eventually reached it be applied retroactively to the period in which the workers had no contract. During that period, all profits would be set aside so that neither the owners nor workers would get them until a settlement is reached.