Power Imbalances and Football hold-outs

I am the proud product of a union family.

My dad is a union electrician in Boston and his local has taken care of him, my mother, my siblings and myself when we were growing up. I am able to walk because the union healthcare plan let the doctors reconstruct my ankle and stabilize every other damn joint in my body. My family was able to survive the construction downturn of the late 80s and early 90s in the Northeast because the union held togehter. And now as my parents are getting older, they'll be taken care medically and financially when they retire without worrying about the probability of a corporate raider running through the pension funds in order to bump the stock by three quarters of a point. I support unions from my very positive experience with the way that the IBEW has treated me, my siblings and my dad.

I also support unions on a very simple theoretical reason. Any labor market with large or limited employers and fire at will allowances creates a massive imbalance of power where the large employer dominates the power equation against any single individual. This imbalance allows for gross distortion of behavior and economic results. The banding together of employers to form a counterbalancing power with a credible ability to counter-negoatiate and create areas of mutual profit and mutual pain redresses the individualized imbalance.

It is for this reason that I support hold-outs in the NFL. The NFLPA is a fairly weak union compared to its peers in the other major professional leagues. Contracts from the perspective of employers are really just strong suggestions after the first half of the contract is over. Employers can cut players at will with minimal cash cost and minimal credibility costs as the established behavioral norm is for contracts to be dishonored by the employer. If a player underperforms his perceived market value, he is at significant risk. The only potentially significant cost in exercising this power for a team is the accumulation of salary cap charges for players who no longer play on a team.

On the other hand the mechanism to reward a player who is significantly over-performing his contract value is much weaker as the player has to assert power and suffer significant costs for the probability of an increaed market value contract. Steeler's guard Alan Faneca is one of these players. He is an elite caliber guard who has seen the market for his position and comparative skillset to at least double in the past two years. He is in a below-market deal right now.

He is participating in all mandatory activities with the exception of a single practice but he will not participate in 'voluntary' activities. I support him on this as he is facing a signifcant power imbalance and being a team player and bearing all the injury risk by himself when he is markedly (50-75%) underpaid is irrational. He does not have a significant amount of power to improve his position, but I approve of individuals with limited power doing what they can to improve their positions and outlooks. This is most pronounced in industries and situations where there is a limited shadow of the future as in football. Good players with average to above average career lengths may sign three multi-year contracts. They must maximize their lifetime income over a short time frame.

I understand what Mr. Faneca is doing and given the power imbalances that exist in the NFL, it is a coherent and eminentibly reasonable thing for him to do.