What the Pawn Stars tell us about the NBA Lockout

Do you ever watch the show about the Las Vegas pawn shop on the History Channel?  It’s called Pawn Stars, and every episode is a case study in the consequences of uneven bargaining power.  NBA players should tune in.

Sellers on Pawn Stars generally have one item to offer for sale to the store owner, Rick. Since the sellers have gone to the trouble of bringing the item to a pawn shop, one can assume the sellers either want to be on television or they have no other means to sell the item, and they probably need money. Rick, on the other hand, needs items for his pawn shop, but he only needs them at his price, and he is the only bidder in every proffered transaction. He knows this, and uses it to brutalize the sellers.

“What are you looking to get for this?” he will always ask.

The seller will invariably name a price (stupid, you should always let the other party go first). Rick will proceed to humiliate the seller by mocking the desired price (through laughter, or by questioning the seller’s sanity). Rick will follow with his own offer, normally about 20% of the seller’s ideal price. Then he will complain in some manner that the price on offer “is all I can really do”. After that, the seller will sometimes scoff a bit and complain about the unfairness of the offer and perhaps beg Rick for a few dollars more.

Sometimes Rick will raise his offer, but you always sense he does so out of pity. The seller will generally end up accepting Rick’s meager offer and leave the store with their tail between their legs. Its painful to watch. Its also a preview of the end game in the current NBA lock out.

In the lock out, the NBA owners are Rick, and the players are the sellers. The owners have set the terms of the negotiations and they have little incentive to compromise. Time is on their side, yes it is.  After all, if they are to be believed, then under the current system most of them operate at a loss.  If that’s the case, then most will not realize a return value on their investments until they sell their teams.  Why operate the team when operations lose money?

Well, one reason the owners might want to operate their teams is because an extended work stoppage could erode the “goodwill” pro basketball has built up with its fans over the NBA’s long existence. If the owners extend the lockout too long, eventually they might lose some fans whom they can never regain. Or will they?

David Berri and Martin Schmidt say “no”. The pair have found no evidence to support the oft repeated and oft threatened loss of “goodwill” that sports work stoppages supposedly produce. According to their research, fans do not punish leagues for extended work stoppages.  The NHL missed an entire season and yet regained their fan base.

If that is the case, the owners have no incentive to compromise their negotiating position. In fact, they have every incentive to hold strong to that position.

The players, on the other hand, will suffer immensely once games are cancelled. The players will lose salary dollars that they can never regain, and career time that will be lost forever.

The players should see the poor hand they are holding. They are offering a common place item to Rick. They have no leverage, Rick has all the leverage.  Thus, the players are going to lose these negotiations. In fact, they will probably lose them badly.

I would advise them to drop their pants right now. If they continue to holdout, they will get the same deal, and they will lose money and time for nothing in return.

 

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3 Responses to “What the Pawn Stars tell us about the NBA Lockout”

  1. jbrett Says:

    Ty,

    While I haven’t watched a major league baseball game since mid-August of 1994, I suspect i’m in the vast minority of fans who exercised OUR only measure of leverage. I simply lost interest in football at all levels; watching a brutal collision between two players, I found myself speculating on which would kill his wife and then himself, and which would be living under a bridge within fifteen years. Throw in that the team I rooted for is run by a senile shell of the maverick that moved the needle on the league for three decades, and I gotta say basketball is all I have left. If they fuck this up badly enough, I’ll run out of team sports to watch. To paraphrase Ron White, I seem to have a fair amount of quit in me.

  2. Chicago Tim Says:

    Or, the players could form their own league.

  3. Dre Says:

    Ty,
    This scenario is interesting for a few reasons. I have two scenarios. I have a comic book collection probably worth a few hundred to a few thousand dollars (no idea how the market looks any more). I also have a car worth a few thousand.

    Now it’s entirely possible I’ll need to replace my car at some point and as a result need to sell my old one to afford it. Any dealer or buyer knows this and as a result has some power.

    Now I could be coerced into selling my comic book collection but I have no desire to. Me selling it does not affect my current state. As such I have the power there.

    In the NBA the players NEED their revenue as their livelihood. The owners have teams as luxury items. I think the players are the real money makers and should have more power but as the owners are not approaching this in a needs way and more of a luxury way it oddly swings the power back to them.

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