Negotiations and Conflict Resolution in Sports and Entertainment - Research Paper Example

Running Head: NEGOTIATIONS AND CONFLICT RESOLUTION IN SPORTS AND ENTERTAINMENT Negotiations and Conflict Resolution in Sports and Entertainment ] [University] Negotiations and Conflict Resolution in Sports and Entertainment Introduction: Sporting personalities have been a victim of conflicts and immense pressures throughout the course of history. Conflicts arise in almost every sport because of the pressure of the competitions. May it be boxing, football, Olympics, basketball and many other sports, every sport features conflict elevation which needs to be dealt with skills of conflict resolution before it gets out of hands (Ramsbotham, Miall, & Woodhouse, 2010) . The entertainment industry has also been full of conflicts and controversies. Media, which is a big part of the entertainment industry, has been the most contributing in this aspect. There have been times when proper rights do not get provided which results in an outcry among the employees of the industry. Literature Review: History of Contracts in Sports and Entertainment: The history of formation contracts can be dated back from 1960s and early 1970s when Major League Baseball Player Association (MLBPA) entered into the scenario. Introduction of players association also enabled sports agent to enter into the games and then with the passage of time, in late 1990s the trend of sports agencies or more renowned as sports agency firms started and afterwards many players joined several sports agencies and today all big names in sports have some kind of affiliation or connection with sports agencies. Players like Roger Federer, Tiger Woods, Maria Sharapova have affiliation with Octagon. NFL, NBA, NHL, MLB have affiliations with IMG. there are many other stars having their own agents who negotiate with different organizations and producers on different issues (Ferrand, Torrigiani, & Povill, 2007). Having a contract is one of the legal way to form an agreement or relationship between the organization and the person. Therefore celebrities as well as players need to have form agreements with the organization. Contact is important because it defines the rights and obligation of both the parties involved. And in this way one can avoid different conflicts and negotiate with each other in more effective and efficient manner. Residual Income and Upfront Monies Paid: With the introduction of third parties like agents and sport agency firms along with the popularity of different sports and celebrities because of extensive coverage of media, at the same time more investors and organizations are ready to make investment in sports and media, the bargaining power of players, athletes and celebrities have increased a lot against organizations and sponsors. Therefore now players, celebrities and athletes demand a lot more than before. Previously associations used to pay after making the players and celebrities wait a long time, though time has changed and now players and celebrities demand money in advance though not full payment but some percent of the total amount and the rest of the amount is paid at the end. There are few contracts in which organizations or sponsors pay the players or celebrities after every specific time. Types of Sports and Entertainment Contracts: The sports and entertainment contracts are just like any other contracts, which consists of different commitments and promises. There are different types of sports contracts on the basis of the role of the person in sports. The two broad types of the sports contracts are: 1. Standard Representation Contract 2. Personal Service Contract On the other hand some of the types of the entertainment contracts are: 1. Production Contracts 2. Screenwriter Contracts 3. Recording Contracts 4. Publishing Contracts 5. Media Distribution Contracts 6. Development Contracts 7. Entertainment Representation Agreements 8. Copyright and trademark registration 9. Royalty, Licensing, and Publishing Agreements 10. Financing Agreements 11. Protection of Intellectual Property. Player Associations and Representation: Unions: Unions are generally those that represents collective interest of all the players in the team and union are used to negotiate about the contracts of every individual player playing in the team. collective bargaining agreement is termed as when a union negotiates about each player and the main issues that the union discusses is about the salary and benefits minimums (Masteralexis, Barr, & Hums, 2010). Agents: Agents are different from unions as an agent represents the interest of a specific player rather than each player in the team. In addition to this, agents negotiate not only about the salaries and minimum benefits but several other benefits for that particular player. When an agent negotiates for the contract of an individual then it is termed as uniform or standard player contract. These agents are supported by players association So, these agents and unions represent players to negotiate their issues regarding rewards, salaries and other benefits. These kinds of negotiation are unique to sports and entertainment because in most of the relationships with the other party is dealt by the unions. Parties Involved in Negotiation Process: Previously players, celebrities and athletes used to contract and negotiate directly with the organization however this has changed and now celebrities and athletes now have agreements with different third parties like agents, sport agency firms and they now directly deal with the sponsors and organizations rather than players and celebrities dealing with them. So, there are generally three parties involved rather than only two parties; the player or the celebrity, the organization or sponsor and the agent or sport agency firms (Wong, 2010). Player-Organization Disputes: In past, the disputes between players and organizations were solved and negotiated between the players and the organization however things have changed and now such a scenario is very difficult as players and athletes use the services of an agent or a sports agency firms and they on behalf of the players negotiate with the organization and in case of disputes and the agent negotiates with the organizations to come up with the solution. Recent Conflicts and Events in Sports and Entertainment Industry: One of the biggest conflicts that arose in the sports industry was the NBA and NFL lockouts in 2011. After the 1998-1999 lockouts, this was another lockout which needed to be resolved efficiently. NFL lockout was followed by NBA lockout which was much more intense and held a threat of shutting down the whole season (Ziller, 2011). In the entertainment industry, the merger of NBC Universal and Comcast was another issue which required negotiation because if this merger was legally accepted under the wrong terms and regulation, only one firm would have had the accumulation of market share which it could have used to create monopolies. Writer’s Guild of America strike 2007-2008 was another issue which belonged to the entertainment industry. It gathered a lot of support in a short time to stand against inequitable distribution of revenues among the writers and the production studios. This issue required immediate attention because closing down all the television programs resulted on a daily basis which could have mounted to a very big amount. Conflicts in Sports One of the major conflicts that the history of sports has ever witnessed is the NBA and NFL lockouts. NFL ignited a lockout which forced NBA to take a bigger step of ceasing the league for almost a complete season unless and until proper negotiations were made. No matter how much NBA and NFL maybe alike in some way, their lockouts do hold some differences and comparisons can be made. NFL has effectively got hold of its situation and can improvise but NBA’s plans seem to show a dark side of basketball. The two biggest issues that NBA has are the alterations of the salary cork and the splitting up of revenue between the owners and the players. NBA planned to tighten up the salary cork to reduce the salary amounts and costs at a team scale and bring down the revenue sharing at almost an equal level (Fendrich, 2011). There was a bit of disregard shown by the players to meet down to the owners’ demand, although, they were willing to cut down the ratio to a certain extent. However, the lockout of 1998-1999 was under the limelight as it had a dampening and adverse effect on the recognition and ratings of the league. The lockout evidently ruined the images of the players when people started blaming the players to be very irresponsible in money matters. It had a huge blow on the NBA league as compared to the MLS and NFL but since then it recovered gradually in the last ten years (Ham, 2000). The NBA commissioner David Stern and NBPA chief Billy Hunter had played vital roles for the negotiations held in the 1998-1999 lockouts but seemed to hold relations at single-string strength. It was claimed that if negotiations were not made by NBA, it could have suffered huge losses financially as well as rating wise (Wilbon, 2011). Compared to NBA, NFL just faced one issue; the division of money. Reports suggested that players’ salaries had reduced by some percentage; however once the issue got resolved, the situation was expected to automatically settle down. Another issue was the allocation of incomes for established players and rookies, since there has been an uneven distribution of income towards the established athletes. Apart from this, another issue was the provision of incomes for retired players which also accumulated a significant part from the revenue. Speculations suggested that the bond between the NFLPA’s Chief Demaurice Smith and Commissioner of NFL Roger Goodell was strengthening; however, nothing could have been be evaluated unless a comprehensive negotiation was made (Ziller, 2011). Media Conflicts In the media industry, which forms a smaller chunk of the entertainment industry, there have been noticeable conflicts occurring followed by efforts of negotiations. One of the recent issues includes the merger of NBC Universal and Comcast. “I don’t think any of the conditions are particularly restrictive” said the executive vice president of Comcast, David L. Cohen (Arango & Stelter, 2011). This statement portrayed the idea that Comcast did not have to give up any of their assets; however, they had to compromise certain management authority in NBC’s favor. Legally, Comcast got authority in the decision making regarding management roles at NBC Universal once the deal got sealed. However, a serious concern that the Government encountered was the application of legal formalities and regulations on the online video streaming which proved to be a slightly new and unique market to deal with. Susan P. Crawford, a professor at Yeshiva University and a supporter of the merger deal, claimed that the merger of Comcast and NBC was a breakthrough in escalating the telecommunication sphere to greater heights (Arango & Stelter, 2011). However, the merger faced critical opposition from social groups as they claimed that the merger could result in media concentration and monopolization, an issue that President Barack Obama promised to combat against. Ultimately, the issue was negotiated and came to a conclusion. Although the Federal Communications Commission labeled the deal as a risk towards the creative and new video distributors in the market, it later acknowledged the merger with just one-sided opposition by senior Democratic commissioner, Michael J. Copps (Arango & Stelter, 2011). The negotiations however gave Comcast the power to spread and branch out particular programming on internet only if one of its competitors started online video distribution. This preserved innovation and creativity to flow through for other new firms in the market. Writer’s Guild of America Another part of the entertainment industry is the writers who are related to the Hollywood industry. When things go against the interests of these writers, they respond very effectively with the belief that pen is mightier than the sword. In November 2007, the Writer’s Guild of America (WGA) called for a strike because they felt that the writers were getting a smaller ratio of revenue with regard to what the large studios were making. The strike had gained a lot of strength and the writers who were a part of it were determined than ever to get themselves heard. After persistent protests and efforts the strike came to a halt after 3 months, in February 2008 which marked its uniqueness in the course of history. (Cieply, 2008) The writers had another concern that they wanted a higher share of profits that were incurred from the show services being delivered on the internet and also demanded an increase in their pay for television sitcoms and movies that were released on DVD. Production houses were cutting off the deserving writers their deserving pay cut which caused unrest among the writers. This strike resulted in freezing all television shows except the ones which were not just for entertainment, but were informative such as news channels, due to which huge losses were incurred. However, that short-term loss was labeled as an investment in the long-run as majority of the studios had stocked up movies and TV shows waiting to be worked upon which could easily recover all the losses from the strike period. The frozen period was inevitably a big concern for the production houses and studios because a whole cycle of entertainment had come to a halt. Furthermore, this affected the consumers and subscribers of the TV shows as they were indirectly the sufferers in a small sense. After a 100 day strike, both the guilds’ boards agreed to a deal and claimed to obey what the court decided for them. Unanimous voting resulted in the strike to end while the protesters were left unasserted by the production companies. Future Implications for Positive Relationships in Sports and Entertainment: With the growth of media as well as sports industry, more sponsors and organizations are coming to these industries and investing more therefore this growth has been one of the major positive points for everyone including athletes, actors, film and TV studios, writers, agencies, clubs, investors, sponsors and organizations. Considering the positive growth and with more involvement of agents and sport agency firms, almost every artists and sportsmen would be using the services of these third party agents because of their success in dealing and negotiating with the sponsors, investors and large organizations. Many athletes and artists have been able to earn a lot more salaries and gain more benefits because of exceptional negotiation skills of these third party agents than they would have earned without using their services (Jeong, 2010). Conclusion: Negotiation and conflicts could arise in any organization and so is the case with sports and entertainment industry (Menkel-Meadow, 2003). Negotiation is an important solution to solve different kinds of conflicts and this solution is also implemented in sports and entertainment industries. However with the passage of time, how athletes and artists negotiate have changed from previous years as now there is an intervention of third party that interacts and negotiates with the organizations and athletes and artists focus on their main job. This have given rise to several types of contracts and agreements in the sports and entertainment industry. These contracts and agreements are important in order to avoid conflicts and protect the interests of players, actors, and different associations, producers, and studios. REFERENCES Arango, T., & Stelter, B. (2011). ‘Comcast Receives Approval for NBC Universal Merger.’ New York Times, Retrieved February 7, 2012, from Cipely, M. (2008). ‘Writers Vote to End Strike.’ New York Times, Retrieved February 7, 2012, from Fendrich, H. (2011). ‘Unlike NFL lockout, NBA’s threatens season.’ SF Gate, Retrieved February 7, 2012, from Ferrand, A., Torrigiani, L., & Povill, A. (2007). Routledge Handbook of Sports Sponsorship: Successful Strategies. New York: Routledge, Taylor & Francies Group. Ham, E. L. (2000). The playmasters: From sellouts to lockouts-an unauthorized history of the NBA. Lincolnwood, Ill: Contemporary Books. Hamrick, A. (2009). Understanding Sports and Entertainment Contracts. Retrieved February 9, 2012, from Jeong, H. (2010). Conflict Management and Resolution: An Introduction. New York: Routledge, Taylor & Francies Group. Masteralexis, L., Barr, C., & Hums, M. (2010). Principles and Practice of Sport Management. Canada: Jones & Barlett Learning. Menkel-Meadow, C. (2003). Dispute Processing and Conflict Resolution: Theory, practice, and policy. Burlington, VT: Asghate/Dartmouth Ramsbotham, O., Miall, H., & Woodhouse, T. (2010). Contemporary Conflict Resolution. Cambridge: Polity Press. Wilbon, M. (2011). ‘NBA lockout will dwarf the NFL strife.’ ESPN, Retrieved February 7, 2012, from Wong, G. (2010). Essentials of Sports Law. California: ABC-CLIO. Ziller, T. (2011). ‘NBA Lockout Vs. NFL Lockout: A Primer On The Similarities And Differences.’ SB Nation, Retrieved February 7, 2012, from http://www.sbnation.com/nba/2011/7/5/2258052/nba-lockout-nfl-david-stern-roger-goodell Read More