BLIND PASS

The NBA Lockout and Public Relations Outlook Case Study

PURPOSE
of the case study
1. To understand the employee relations and public relations practice of the NBA 2. To demonstrate sports and entertainment public relations principles 3. To demonstrate strategies in communicating with mass media play a prominent role in selecting and framing mass media content that can influence public opinion, which can lead to consumer behavior. 4. To understand how communication with internal and external audiences can and will change an organizations public image, for both the organization and employees 5. To identify the specific public relations strategies used by the NBA and NBPA to shape consumer behavior

STARTING LINEUP
David Stern NBA Owners NBPA Derrick Fisher Billy Hunter
NBA Players Players Union Players Union Association: President; L.A. Executive Union Laker Chief

NBA Owners of 30 Commissioner Teams

THE MAJOR CONFLICTS

Players want a means to make an income during the year. Canceling games means advertisers and sponsors would start pulling commitments and season ticket holders would ask for refunds. Owners would like to have a salary cap to help competitive equity and increasing the luxury tax on players salary (Los Angeles Times, 2011). Both sides are working to preserve as much of an 82-game season as possible.

Players want to have a more effective revenue sharing program that would allow a small-market team like Sacramento to split the multibillion dollar local television deal that larger market teams sign (Los Angeles Times, 2011).

The National Basketball Association

The National Basketball Associations mission is to be the most respected professional sports league in the world, guided by two principles: to grow and celebrate the game of basketball, and to understand that the popularity and visibility of our teams, players, and league obligate us to demonstrate leadership in social responsibility. Values of the NBA include: an equal opportunity to grow professionally and be empowered to make appropriate decisions, and the importance of job satisfaction, (NBA.com).

An active role in helping present players, teams and coaches in the most positive light possible and being able to explain issues, being able to set up interview requests, being able to help people who cover the game,
-Chris Brienza, NBA Director of Sports Media Relations(1998)

The media are the eyes and ears so if you are not talking to the media, you are not going to get the word out to your fans, -Brian McIntyre, NBA Senior Vice President of Communications (1998)

NATIONAL BASKETBALL

PLAYERS ASSOCIATION
The union distributes a 56-page lockout handbook to its 400-plus players Handbook quotes, Please be sensitive about interview or other media displays of a luxurious lifestyle. The union is using podcasts and social media websites to keep players briefed on messages and fans abreast of the seasons status Players want 57 percents of basketball related income in the previous deal which the owners declined. During the summer of 2011, the players also proposed going as low as 53 percent. Players Union executive director Billy Hunter estimates a players loss of $350 million each month the NBA is locked out.

NBA LOCKOUT HISTORY

2011: The Fourth Lockout in League History. A result of the 2005s collective bargaining agreement expiration and disagreement over the players fair share of basketball related income. Previous lockouts:

1996: Lockout after NBA and NBPA argue over a $50 million television revenue package. 1998: Owners voted to reopen the collective bargaining agreement and announced another lockout. 1999: Commissioner Stern and NBPA Director Billy Hunter settle on maximum salaries for players and pay scale for first year players.

BASKETBALL
RELATED INCOME
The league has grown at a slower rate compared to other sports and has had an uneven distribution of revenues between teams, depending on market size. Ticket revenues were reported to be down six percent compared to five years ago. The league is still profitable, with operating income estimated as $183 million in 2009-2010, or about $6 million per team. The league claims that during each year of the expiring collective bargaining agreement, the league has never had a positive net income, or operating income. Forbes data is inaccurate; our losses for 2009-2010 were $340 million.

EMPLOYEE RELATIONS
The National Basketball Players Association filed against the NBA with the National Labor Relations Board on May 24, alleging the league engaged in a number of activities that violate labor laws: the league officials dealt directly with the players instead of union officials Failed to produce documents to back up the leagues justification for harsh and regressive demands League engaged in take it or leave it bargaining. The league filed a complaint with the National Labor Relations Board (NLRB) charging the players union with negotiating in bad faith. The players filed a complaint with NLRB and claim that the league is in violation of labor laws.

TIMELINE TO THE 2011 LOCKOUT

May 24: The players union files a lawsuit with the National Labor Relations Board
to try to prevent a lockout when the collective bargaining agreement expires June 30.

July: The NBPA amended the unfair labor practices charge which it to include the
allegation that the league canceled the annual summer league without bargaining with the union, as it is required to do (Sportingnews.com, 2011).

August: The NBA files a preemptive lawsuit in federal court. The league is officially
locked out.

Aug. 7: Indiana Pacers George Hill tweets: I wonder can I apply for
unemployment since its a lockout!!!!! Hills reported income was $1.2 million last season (Foss, 2011).

TIMELINE TO THE 2011 LOCKOUT

Oct. 28: Commissioner Stern canceled the rest of the November games saying there
will not be a full NBA season "under any circumstances," (Huffington Post, 2011).

Nov. 26: NBA owners and NBPA came to a tentative agreement to start the season
December 25, 2011. Players accept 51 percent of the revenues (Zillgitt, 2011).

Dec. 25: The NBA begins the 2011-2012 season with 66 scheduled regular games.
Commissioner Stern states We think it's a very good deal, and it's going to withstand the test of time," (ESPN.com, 2011).

LOCKOUT HIGHLIGHTS
After filing the charge against the players union, Commissioner Stern states "I don't feel optimistic about the players' willingness to engage in a serious way," (Foss, 2011). In September, the NBA and players meet for a third time in two weeks, but leave without much progress in negotiations. Derek Fisher comments I think coming out of today, obviously, because of the calendar, we can't come out of here feeling as though training camps and the season is going to start on time at this point," (Foss, 2011). October brings by the cancelation of the first two weeks of the NBA season. Commissioner Stern announces the cancelation and states that there will not be a full NBA season under any circumstances, (Huffington Post, 2011).

DISCUSSION QUESTIONS

The NBA released a statement that claimed financials reported by Forbes.com were not entirely true; the majority of the teams operated in the red and the NBA was losing money primarily because of the salary expense. Nate Silver, CBS news, reports that this is an inaccurate portrayal of the state of finances. What is the public relations implication of the mixed messages? How should the NBA react to a decline of merchandise sales and ticket sales due to this message?

DISCUSSION QUESTIONS
How do the actions of the NBA Commissioner and owners show a commitment to the NBA mission and vision statement? Are the NBA owners committed to a fair salary and collective bargaining agreement? How are they communicating the message?

DISCUSSION QUESTIONS

The fans are reacting to the loss of games. Revenue is being lost for each game missed because of the drop in ticket sales.

1.How might the argument over multi-million dollar contracts be perceived in the eyes of an average NBA fan?
2.How might this impact the rest of the seasons ticket and merchandise sales? 3.Stakeholder theory relates that if stakeholders goals are not satisfied, they will either pressure the organization to change or oppose it in ways to add cost. Is this theory relevant in the actions of the NBA fans now that the season has resumed?

DISCUSSION QUESTIONS
The owners who wanted to discourage the superstars forged a system that essentially encourages departing players to demand trades before their contracts end, The problem with the NBAs new rules is that they ignore the prospect of losing a superstar costs more to the team than the salary. You cant change that unless you A) stop marketing superstars to limit their influence in the NBA or b) reinstitute the logic of 1975- before the collective bargaining agreement The league spent six months of press conferences talking about the importance of small markets now owns the small market franchise that will suffer from losing a superstar player to a large franchise, in the case of Chris Pauls trade to either Los Angeles or New York, (SBnation, 2011).
These media reports are an indication that the NBA agreement may not have served its intentions. How would the NBA and NBPA collaborate and respond to negative reports to show the agreement was in fact collaborative, and worth the lockout?

DISCUSSION QUESTIONS

What strategies can NBA public relations practitioners use to better practice agenda setting tactics to use the media to better reach their targets with the intended message that the lockout and lengthy negotiations were necessary for the organization?

DISCUSSION QUESTIONS

The Superstar NBA player is often in the public eye. How do the images of the super star athlete affect the NBAs reputation? What other tactics could the NBA and NBPA employ it its plan to train superstars in media relations?

DISCUSSION QUESTIONS

The NBPA President and L.A. Lakers player Derek Fisher has acted as the main contact for all the players in the NBA. How might the individual actions of players affect the groups messaging? Discuss the NBPA Lockout Handbook located at:
http://www.charged.fm/blog/post/947/prepare-for-the-worst-an-in-depth-look-at-thenbpa-s-lockout-handbook#/just-close-for-now

What is the purpose of such a union manual?