Levelling the Playing Field with Collective Bargaining

A collective bargaining agreement (CBA) is a commercial contract between a sporting league and the players’ union, which represent the clubs and the players respectively.[1] It governs not only the standard employment relationship between each player and their club, but also addresses other operational and policy areas relevant to the sport. In implementing a CBA, there are legal complexities that may arise due to challenging negotiations, and possible infringements of the restraint of trade doctrine. These risks are contrasted (and arguably overshadowed) by the benefits a CBA can bring to a sport, from facilitating measures like the salary cap that ensures competitive balance, to developing women’s sports by providing women athletes with greater bargaining power to fight for gender equality.

The Makings of a CBA

First and foremost, the core of a CBA will set out the minimum remuneration and benefits that each player is entitled to, from base salaries and pension payments[2] to personal and sick leave.[3] The CBA will also include a standardised employment contract template to be used by the clubs and players, incorporating the agreed CBA terms into each player contract to ensure all parties are bound by the CBA, and not just the players’ union and the league.[4] Beyond standard remuneration terms, a CBA will also address the surrounding commercial and legal aspects of a player’s employment, such as a player’s right to use their own name and image. For instance, the AFL CBA empowers players to freely use their image in commercial endorsements and sponsorship opportunities as long as it does not prejudice the AFL or conflict with an existing AFL sponsor.[5]

In addition, another common measure often implemented by a CBA is the salary cap, used in sports like the NFL and AFL. The salary cap places a spending limit on clubs for each season, dictating the maximum amount of money each club can spend on players’ salaries in a single season.[6]

Standardisation

This standardisation of player contracts and league-wide policies is a key characteristic, and indeed a benefit, of a CBA. It is ideal from a player’s perspective because this means the players are guaranteed a range of minimum entitlements and benefits, and clubs are not able to abuse their position of power as an employer to unilaterally alter any of these rights.[7] 

Furthermore, a CBA can set out a detailed transfer policy, often involving the use of mechanisms like a free agency period, to provide opportunities for players to move between clubs. Traditionally, without a CBA, clubs would dictate transfer conditions, which has previously led to legal disputes. For NRL players in the late 20th century, even if a player was out of contract, they were only permitted to play for another club if a transfer fee was paid, or the player was released.[8] This policy was challenged and deemed unenforceable in court because it unreasonably restrained the players’ ability to engage in trade.[9] A CBA can minimise the possibility of such legal disputes from arising, as any transfer policy is collectively negotiated and agreed to by the players.

With the benefit of standardisation comes the inevitable risk of a prolonged and difficult negotiation process. Unlike an individual employment contract, the CBA requires the entire player’s union and the league to agree on every term. Unsurprisingly, this level of cooperation is difficult to achieve. A recent example sees Netball Australia failing to agree to terms on a new CBA with the players’ union, leaving all its players without a contract.[10] In extreme cases, breakdowns in negotiations have also led to player strikes and lockouts, with the NBA being an infamous example.[11] 

The NBA’s 2011 lockout extended far into the regular season. This meant cancellation of 26% of their regular season games, resulting in over $800 million of lost revenue.[12] These cancellations can also lead to further legal complications involving broadcasting contracts as the league contractually promises each broadcaster a set number of games[13]. If that number isn’t met, it can amount to a breach of contract, making the league separately liable to account for losses suffered by broadcasting companies as well.

Salary Cap

If both parties can remain amicable, however, and agree to a CBA, it does offer unique benefits to the sport. One of which is the ability to implement a salary cap, which has demonstrated to be a positive impact on multiple sports.

The primary rationale behind imposing a salary cap is to achieve competitive balance. Forcing every club to adhere to the same spending limit ensures wealthier teams are not advantaged simply because they can afford to recruit all the best athletes in the sport. This is an inevitable phenomenon without a salary cap, as evidenced by the state of European football. Looking at the Premier League, the ‘Big Six’ has now dominated the domestic competition for decades in terms of wins and silverware. Financially, they also ‘account for 57.5% of the collective annual revenue of all 20 clubs in the division’.[14] On the other hand, the NFL, which employs a salary cap, has seen much more balanced competition. Between 2001-2005, 25 of the 32 teams were able to make the playoffs,[15] and throughout the sport’s history, more than half of the teams in the competition have won a Super Bowl.[16]

It is worth flagging that the implementation of a salary cap may attract legal issues and disputes as it operates as a restraint on trade. The salary cap affects the maximum possible remuneration a player can get. In practice, for instance, it is not uncommon for an NFL player to take a pay cut or restructure his contract just so his team can remain under the salary cap. This effectively forces players to accept less money than they’re worth, which may be seen as an unlawful restraint of trade.[17] In fact, on separate occasions, former NRL players Brett Kimmorley[18] and Sonny Bill Williams[19] had threatened to legally dispute the validity of the salary cap amidst transfer disputes.

However, neither case progressed much further, and there have not been any other legal challenges against the salary cap.[20] Delving into the doctrine of restraint of trade clauses, it is accepted that a restraint will be permitted if it is reasonable.[21] On determining reasonableness, we can look to whether the restraint operates to protect any legally recognised protectable interests.[22] In Adamson, it was stated that the interests of a league to maintain a competitive competition and ensure rich clubs do not ‘plunder the weaker clubs of their good players’ are legitimate interests.[23] Considering this, the legal risk of implementing a salary cap is minimal so long as it protects the interests of the league.

Bargaining Power for Female Athletes 

Another unique benefit of the CBA is the fact that it allows every athlete in the industry to have significantly greater bargaining power.[24] By collectively dealing with the league, it does not matter if you are a superstar or a rotational player; everyone shares equal bargaining power.[25] This has been an instrumental factor that has contributed to various landmarks of women’s sports in recent years. A prime example is the historic deal between U.S Soccer and its Women’s National Team (USWNT), where the USWNT will ‘receive the same pay and prize money for appearing in matches’ as the men’s team.[26]

In a domestic context, AFLW players have also benefitted from collective bargaining as they are now part of a joint AFL CBA. By joining forces with AFL players, they were able to have a stronger collective voice during negotiations, which has resulted in many favourable changes, including guaranteed 12-month contracts and ‘a world-leading 12-month pregnancy policy’.[27] The beneficial impact this has on the sport overall cannot be overlooked. Longer guaranteed contracts mean AFLW players will have less need to work separate jobs to pay the bills,[28] and can dedicate more time to training, leading to better performances and more entertainment for fans on the field. The use of CBAs to accomplish historical feats shows its capability of promoting gender equality and the progression of women’s sports. 

Conclusion 

Given its collective nature, the bargaining process of a CBA is rarely smooth-sailing, with many challenging incidents of failed negotiations across multiple sports. Despite that, the implementation of CBAs has shown improvements in competitive balance and great development in women’s sports. This opportunity to implement transformational policies that benefit the sport as a whole is extremely valuable, and makes the negotiation process worthwhile.

[1] David Thorpe et al, Sports Law (4th edition, Oxford University Press 2022).

[2] NFLPA, ‘Collective Bargaining Agreement’ (NFL, 2020) <https://nflpaweb.blob.core.windows.net/media/Default/NFLPA/CBA2020/NFL-NFLPA_CBA_March_5_2020.pdf> accessed 13 November 2023.

[3] AFL Players’ Association Limited, ‘AFL and AFLW Collective Bargaining Agreement’ (Australian Football League, 2023) <https://cdn.aflplayers.com.au/app/uploads/2023/10/2023-2027-AFL-and-AFLW-CBA-MASTER-LONG-FORM-FINAL-DISTRIBUTION-VERSION.pdf> accessed 12 November 2023.

[4] David Thorpe et al, Sports Law (4th edition, Oxford University Press 2022).

[5] AFL Players’ Association Limited, ‘AFL and AFLW Collective Bargaining Agreement’ (Australian Football League, 2023) <https://cdn.aflplayers.com.au/app/uploads/2023/10/2023-2027-AFL-and-AFLW-CBA-MASTER-LONG-FORM-FINAL-DISTRIBUTION-VERSION.pdf> accessed 12 November 2023.

[6] NFLPA, ‘Collective Bargaining Agreement’ (NFL, 2020) <https://nflpaweb.blob.core.windows.net/media/Default/NFLPA/CBA2020/NFL-NFLPA_CBA_March_5_2020.pdf> accessed 13 November 2023.

[7] Daniel Pannett, ‘Collective Bargaining in Sports: Challenges and Benefits’ (2015) Journal of Law and Jurisprudence 4(1), 189.

[8] Buckley v Tutty (1971) 125 CLR 353.

[9] ibid.

[10] Catherine Healey, ‘Time’s Up! Aussie netballers left unemployed as new deal not reached by deadline’ (Fox Sports 29 September 2023) < https://www.foxsports.com.au/netball/times-up-aussie-netballers-left-unemployed-as-new-deal-not-reached-by-deadline/news-story/87a45a16ffd8fafec2792d6220a56b21> accessed 15 November 2023.

[11] Gabriel A. Feldman, ‘The Legal Issues Behind the Looming NBA Lockout’ (Huffpost 21 June 2011) < https://www.huffpost.com/entry/the-legal-issues-behind-t_b_881409> accessed 13 November 2023.

[12] Patrick Rishe, ‘NBA Lockout Costs League $800 Million… and Counting; Players Justified to Fight in Courts’ (Forbes 16 November 2011) < https://www.forbes.com/sites/prishe/2011/11/16/nba-lockout-costs-league-800-million-and-counting-players-justified-to-fight-in-courts/?sh=599b6b0a4be5> accessed 14 November 2023.

[13] Brad Adgate, ‘Next NBA TV Deal Could Set New Standard for Sports Streaming Rights’ (Forbes 23 October 2023) < https://www.forbes.com/sites/bradadgate/2023/10/23/how-the-next-nba-media-rights-negotiations-will-be-different/?sh=6c365cfc4ead> accessed 15 November 2023.

[14] Robert Kidd, ‘The Big 6 Clubs Are ‘Destroying The Premier Leauge’, Report Says (Forbes 18 June 2019) < https://www.forbes.com/sites/robertkidd/2019/06/18/the-big-6-clubs-are-destroying-the-premier-league-says-report/?sh=7009e34c10dc> accessed 14 November 2023.

[15] Ryan T. Dryer, ‘Beyond the Box Score: A Look at Collective Bargaining Agreements in Professional Sports and Their Effect on Competition’ (2008) Journal of Dispute Resolution 2008(1), 267.

[16] Rudi Schuller, ‘Which NFL team has the most Super Bowl wins?’ (DAZN 24 September 2023) < https://www.dazn.com/en-US/news/american-football/which-nfl-team-has-the-most-super-bowl-wins/484faigcpnwi1foytqsaoagq3> accessed 15 November 2023.

[17] Antoni Buti, ‘Salary Caps in Professional Sports: an Unreasonable Restraint of Trade’ (1999) 14 JCL 130.

[18] Chris Davies, ‘The Use of Salary Caps in Professional Team Sports and the Restraint of Trade Doctrine’ (2006) Journal of Contract Law 22.

[19] Brent Reed, ‘Salary Cap Challenge a ‘smokescreen’’ (Fox Sports 18 March 2009) < https://www.foxsports.com.au/nrl/nrl-premiership/salary-cap-challenge-a-smokescreen/news-story/3c45d66d31e50fffadfec3a709bf12fa> accessed 14 November 2023.

[20] Antoni Buti, ‘Salary Caps in Professional Sports: an Unreasonable Restraint of Trade’ (1999) 14 JCL 130.

[21] Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535.

[22] J W Carter and D J Harland, Contract Law in Australia (4th edition, Butterworths 2002).

[23] Adamson v NSW Rugby League Ltd [1991] FCA 550.

[24] David Thorpe et al, Sports Law (4th edition, Oxford University Press 2022).

[25] Daniel Pannett, ‘Collective Bargaining in Sports: Challenges and Benefits’ (2015) Journal of Law and Jurisprudence 4(1), 189.

[26] Andrew Das, ‘How U.S Soccer and Its Players Got to Equal Pay: a Timeline’ (NY Times 25 February 2022) < https://www.nytimes.com/explain/2022/02/25/sports/uswnt-soccer-equal-pay> accessed 15 November 2023.

[27] Michael Rogers, ‘Big pay rises, more AFLW games in historic joint CBA’ (AFL 21 September 2023) < https://www.afl.com.au/news/1036866/big-pay-rises-40m-boost-for-past-players-in-historic-afl-and-aflw-joint-collective-bargaining-agreement> accessed 14 November 2023.

[28] Sarah Burt, ‘Play hard, work harder: The ‘exhausting’ balance for AFLW players’ (The Age 22 December 2021) < https://www.theage.com.au/sport/afl/play-hard-work-harder-the-exhausting-balance-for-aflw-players-20211222-p59jhf.html> accessed 15 November 2023.