NFL's salary cap could be the save baseball needs If it works in football, idea may catch on

December 24, 1992|By Jon Morgan | Jon Morgan,Staff Writer

With the NFL's tentative labor settlement this week, two of the nation's four major sports leagues have adopted an idea once considered revolutionary: Let athletes change teams nearly will, but tie their salaries to team revenues.

Coupling a salary cap with limited free agency was accomplished first by the NBA in 1983, which credits the invention with helping to save the league.

If it can work in football, it could spread to other sports and potentially reduce the chronic money disputes that have marked modern sports labor relations.

In the nearly 10 years since basketball adopted a salary cap, it has been the only major sport to avoid a work stoppage. This year alone, there was a strike in hockey, a courtroom showdown with players in football and preparations for a possible lockout next season in baseball.

"I think it's something you really have to look at, based on the success it's had in the NBA. It's pretty much saved that league," said Douglas L. Bureman, senior vice president for business operations with the Pittsburgh Pirates.

The idea has strong philosophical appeal, providing players with a fair share of their sport's wealth while protecting the industry from an unfettered salary spiral.

"We will follow it carefully, and I think it is inevitable that baseball will have to have some system similar to basketball and football," said Richard Ravitch, chief labor negotiator for Major League Baseball.

NHL spokesman Gary Meagher said:"The league certainly monitors all the collective bargaining agreements and all the developments. . . . [A salary cap] certainly has been talked about publicly here."

Sports industry professionals say the applicability to other sports may depend on changes within each league, especially the manner in which teams share revenues. Also, other leagues are likely to watch the agreement in operation to be sure its concepts work in football.

An agreement like the NFL's "would certainly be the preference of baseball. But it's a difficult thing to bring about," said Tal Smith, a sports consultant based in Texas and a former president of the Houston Astros.

For one thing, players' unions tend to oppose salary caps, arguing that the free market should decide wages in sports as it NTC does in other entertainment industries. Team owners, on the other hand, resist free agency and argue that fast-rising salaries could destroy sports leagues.

Gene McHale, a sports consultant in New York, cautioned that baseball once viewed its salary arbitration plan as a major breakthrough. But that plan, in which players with three to five years in the majors can turn to an arbiter for settlement of salary disputes, now is hated by most clubs, he said.

Basketball turned to a salary cap in an effort to staunch a flood of red ink that was threatening the league. It seems to have worked, pushing franchise values from $10 million to $80 million and average player salaries from $400,000 to $1 million, said Charles Grantham, executive director of the NBA Players Association.

But he said: "I think the time has come and the business has matured, and it's time to return to business as usual.

"I really have a problem with a cap. Business isn't run that way. There is no cap on profits. They are saying, 'I will cap your income, but not mine.' "

The NBA's agreement expires at the end of next season, and Grantham said he is educating players on why they should fight the cap. He also has criticized the formula used to determine revenues, which excludes receipts from product licensing.

But the league is happy with the arrangement, said Joel Litvin, the NBA's deputy general counsel.

"We think it has worked out very well for both the teams and the players. It has allowed the players to share in the growth of the league," Litvin said.

"It's been the answer for us, and I guess football will soon find out for itself."

The father of the cap, NBA vice president and general counsel Gary B. Bettman, recently was named commissioner of the NHL, effective Feb. 1. This has led to speculation that a cap could be on its way to hockey.

Bettman, who was unavailable for comment yesterday, has said he will not simply transplant the NBA plan to hockey, but might try to craft an entirely new system. Hockey players ended an 11-day strike in April after agreeing jointly to study the economics of their sport with the owners. The new agreement expires next September.

Baseball owners recently issued notice to their players that they will reopen the labor contract next year. The league failed to get ++ a salary cap last time around, and management officials acknowledge it will be a tough sell this time.

For one thing, the union, led by executive director Donald Fehr, says it's unfair to ask the players to help the league's finances with a salary cap when the owners aren't willing to help themselves by sharing more revenues. Big-market teams have resisted sharing television and gate receipts with small-market teams.

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