Question

Most major sports organizations (NFL, NBA, NHL, etc.) and the players' unions can be viewed as a bilateral monopolies. In the light of the text discussion and the theory of bilateral monopoly, discuss the situation faced by the team owners and players as to ease of settling salary and salary cap disputes, prospects for the future, etc. 25 points

Answer 1

Solution:-

In bilateral monopoly, there are single seller and single buyer. This theory is applicable to the sports league and the players union. Both the parties exist due to each other. if sports leagues are relinquished, then players union will also suffer. If players are not available, the league will not function. Thus, they both cater to each other and they both need each other.
It causes them to settle the different issues such as player’s contract, salary negotiations. It also helps in building the future prospects.