NFL Lockout: How Mediation is Helping

Posted by Michael A. Petruzzi on May 26, 2011  /   Posted in Business Options

The NFL owners and players completed another round of mediation last week in their ongoing efforts to negotiate a new collective bargaining agreement (CBA) in time for the start of the 2011-2012 season. This most recent session was court-mandated and, as expected, did not lead to a settlement.

It’s possible the parties may have made more progress had the 8th Circuit Court of Appeals not stepped in on the same day as the mediation conference, but that’s unlikely. The Court decided to reinstate the owners’ “lockout” of the players, keeping the freeze on all NFL business – including payments to players – in place. This is technically a temporary order by the Court until it issues its final ruling after oral arguments in June. Both sides want to see this particular legal challenge through before negotiating further.

Given all the fits and starts to this labor dispute, many are questioning whether mediation has been largely a waste of time. A new CBA seems no more likely today than it did before the two negotiating groups met for 16 days in February and March during their first attempt at a mediated settlement. We have only vague public statements about “progress” and speculation regarding what, if any, movement has occurred from either side in negotiations. Instead of consensus, the parties exit each meeting as entrenched in discord as ever.

All of these mediation sessions must appear rather pointless then, right? Doubtful.

What Is Happening in the Negotiating Room
The truth is we don’t know what is happening behind closed doors. But I suspect mediation has already proved more productive to this point than anyone is letting on. I’d even go so far to say that not only is mediation exactly the right process for this dispute, but that it will prove to be the foundation around which a resolution is finally achieved. Despite all of the hand-wringing, this negotiation is unfolding as it must before a new CBA will be reached. Too much money (some estimates range in the neighborhood of $9 billion) and too many competing agendas are at stake for this to be resolved without a few false starts.

Consider the dynamics in play. Not only is the NFL a multi-billion dollar industry, the parties are ensnared in a very public dispute as both sides – owners and players – vie for public sympathy for their respective positions. Further, each “party” represents a larger group with diverse interests and agendas that do not always align in-house. Owner divisions include small- vs. big-market teams; cash-rich vs. cash-strapped operations; and traditional vs. progressive sensibilities. Compare that against player tensions arising between top-tier vs. middle-of-the-pack and league minimum contracts; stars vs. “role” players; and current vs. retired members.

And, to complicate matters further, every discussion is surrounded by participants with ultra-competitive personalities that have been forged in a tradition where wins happen only when the other side loses.

Why There Is No Deal Yet
At this stage, the owners and players are bent on gaining whatever leverage they can before either gets serious about working out a deal, and they each have many cards to play away from the negotiating table before narrowing their respective bargaining positions. For the owners, the primary point of leverage is the lockout. They hope it will put financial pressure on enough players to force the union (despite efforts to decertify) to yield to negotiations in order to get its members back to work. For the players, they have a laundry list of legal challenges they can bring to risk the current structure of the league, and which, in turn, could cast this wildly successful joint enterprise into a world of uncertainty.

So much of the commentary surrounding these events has been preoccupied with the endgame of getting a deal done. The problem with this approach is that it fails to acknowledge the subtleties inherent in the negotiating process as a whole. Every negotiation involves stages of preparation and discovery before bargaining begins in earnest. The NFL owners and players have not been ready to bargain, because they do not yet feel adequately secure in their bargaining positions. Some of these ongoing legal challenges will have to play out before either side begins to accept their stations at the negotiating table.

Mediation Is the Framework
Negotiations with this many moving parts take time and involve more than a few bumps and bruises. Mediation has provided the NFL owners and players a framework to help them navigate through the necessary preparatory phases of their negotiating process and, perhaps most importantly, a confidential setting in which to do it. Public airings are far from an ideal platform for parties with a long and contentious history to come to terms on an agreement. Mediation requires open and honest communication, and offers a safe space to air discussions outside of the public forum. By invoking confidentiality, information shared during these sessions cannot be used in court, freeing the parties to explore areas and interests that they would not otherwise discuss.

Additionally, part of a mediator’s job is to help the parties get to a point where they each feel comfortable bargaining. This may mean helping them better clarify their positions and focus their respective strategies. It may also mean acting as a facilitator to create a collaborative environment for the parties to discover where they have joint interests on which they can build consensus.

As a neutral third party who is not there to decide right or wrong on any given issue, the NFL mediator would have been well-suited to help the owners and players sift through their many (often competing) agendas, grievances, concerns and goals. That process would have been constructive regardless of whether it led directly to a deal. In fact, it would not surprise me to learn that the current legal strategies working their way through the courts were refined as a result of such an exercise.

Common Goal: Keep the League Thriving
As it stands now, the NFL owners and players remain in the positioning phase of these negotiations. Both groups’ positions will come clearer into focus as some of the current legal challenges are decided. How the parties respond in the short term remains to be seen, but I am confident they will be back in mediation to further negotiations and ultimately strike a deal. Using the courts to garner leverage in negotiations can only take them so far. Eventually, the risk of uncertainty associated with relying too heavily on the courts to “solve” their differences will outweigh the utility of litigation to improve bargaining position.

In the final, both sides know they are partners in a very profitable enterprise and they will be forced to bargain with one another to keep it thriving. Mediation will continue to be a critical tool that guides those negotiations much of the way.

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