Player contracts | Financial markets homework help

 1. Every professional sports league (e.g., National Football League,  National Basketball Association, National Hockey League, Major League  Soccer, etc.) re-negotiates their contracts between the owners and the  players union. Each party has their own unique power base. Take a side  (owners or players union) and describe how you will use your power base  to get the other side to give in to the demand regarding salaries &  retirement or an issue of working conditions. Use references to support  your position. 

2. Reply to the below post in 1 paragraph.

 

In  2011, the National Football League (NFL) reached a collective  bargaining agreement (CBA) between its players and owners. In accordance  with the agreement, players would receive better post-retirement  benefits ranging from health care, pensions, and transition programs.  Current players would receive better performance conditions, shorter  offseason workout programs, and limitations on contact drills during  training camps, practices, and scrimmages. The CBA benefits the players’  longevity during that playing days and life after football, does it did  not the benefits the players in one glaring area which is performance  pay. Looking at now versus the future, players would opt to have  millions now rather than receiving thousands in pension decades later  like their counterparts. For instance, CBAs for pro baseball and  basketball teams include verbiage that states the players will receive  guaranteed pay regardless of performance. NFL players wanted this  stipulation added to the current CBA, but owners would not give in due  to health risks and concerns of pro football. In choosing to side with  the owners, I believe that the owners got the biggest piece of the pie  which is retaining maximum profits.

Prior  to the current CBA, first year players taken early in the draft were  guaranteed to earn tens of millions of dollars without playing a single  down in a game. Under the new CBA, first year players pay has been  reduced from previous numbers, making salaries more manageable at the  ownership level. The intent with reducing the salaries of first year  players was to invest those funds into more established players. Despite  the intent, the reality is that owners deem investing in more  established players as a waste in resources considering the average  playing career is not even four years and the health risks involved. The  owner’s mentality is why spend on established players when younger,  talented players are available at a cheaper rate. With league revenues  and team profits increasing with operational expenses decreasing, the  owner are calling the shots as to how business will be done in the  league. It is obvious that during the next round of CBA talks, the  players are going to want more in guaranteed funding. The owners can use  this leverage to solicit more performance from the players while  reducing other perks that enhance quality of life during and post  football career. 

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