Orioles sale: Price is right for players May make it harder on owners in labor talks

August 05, 1993|By Peter Schmuck | Peter Schmuck,Staff Writer

The record price that Peter G. Angelos and a large group of investors have pledged to pay for the Orioles probably won't have a direct effect on baseball's volatile labor situation, but it may make it more difficult for the owners to convince players that the financial state of the game has deteriorated.

The owners will meet next week in Wisconsin to work on a revenue-sharing proposal for the coming collective bargaining negotiations with the Major League Players Association. That proposal -- in whatever form it takes -- figures to be a harder sell in the aftermath of the $173 million that was offered at auction for the Orioles.

"I think it reflects that there is a well-founded belief that this is a good venture to be involved in," said Donald Fehr, the executive director of the players union. "It doesn't surprise me. In a bidding process, you're going to get a better reflection of the real price."

The union long has used the escalating value of major-league franchises as a counter-argument to ownership's contention that spiraling payrolls are a threat to the financial stability of the sport.

It remains open to debate whether the Angelos group paid too much for the franchise, though Angelos said during a Tuesday news conference that he would have paid $200 million to outbid New York art dealer Jeffrey H. Loria. The final bid exceeded the highest price previously paid for a major-league baseball team by $67 million ($106 million for the Seattle Mariners) and nearly doubled the price ($95 million) that investors in Florida and Colorado paid for the two new expansion teams.

Still, Player Relations Committee president Richard Ravitch, the chief negotiator for the owners, said yesterday that it should have no impact on his ability to convince the players of the necessity of drastic economic restructuring.

"No, none at all," Ravitch said. "The economics of the industry are what they are. I respect the marketplace, but what somebody chooses to pay is a factor of two things -- the circumstances of that particular team and the appetites and motives of the buyers."

Angelos said as much on Tuesday. He went to Monday's bankruptcy auction in New York determined to bring the team under local ownership for the first time since Jerold Hoffberger sold the club to Washington attorney Edward Bennett Williams in 1979. The Angelos group, which was bolstered by the last-minute merger with a competing ownership group led by William O. DeWitt Jr., ended up paying about $30 million more than the price agreed to by DeWitt before current owner Eli S. Jacobs was forced into bankruptcy.

"I have no doubt that Don Fehr will claim it as evidence that the economics of baseball are great," Ravitch said, "but it only proves that the economics of the Baltimore Orioles are great."

Fehr will concede that point. The Orioles have evolved into one of professional sports' most lucrative franchises. The combination of the club's tremendous attendance base and a relatively reasonable salary structure obviously made the bottom line attractive enough to support the sales price.

"It certainly suggests that wherever their [the owners'] problems are, they aren't in Baltimore," Fehr said. "In fairness to them, they haven't suggested that the Orioles are a problem franchise."

No one knows what the impact of the price will be. The last baseball team sold was the San Francisco Giants, who drew a $115 million bid from a Tampa/St. Petersburg investment group, but eventually sold for $100 million to a group headed by $H Safeway chief executive officer Peter Magowan. If the value of the team is affected by comparable prices, that may have been a bargain, but it isn't that simple.

"In ordinary times, you might be able to say that," Fehr said, "but I'm not sure how that would play out in Baltimore. . . . You have to look at the individual circumstances."

The $173 million price tag appears to be a sensitive subject among baseball's owners, though it only can increase the value of the other 27 franchises. Several owners and club executives contacted by The Sun refused to comment on the outcome of the bidding.

"I'm in no position to comment about the price," said St. Louis Cardinals vice chairman Fred Kuhlmann, a member of baseball's ownership committee. "It's the people involved who decide to accept a price. If that is satisfactory, that's what determines the outcome. That's a new plateau for a value of a club. I'm not the one to say whether it's proper."

The other owners will have the last word on the deal, however. They will vote soon on whether to ratify the sale, which requires the approval of at least 10 clubs in the American League and eight in the National League.

It should not be a prolonged process, because many of the investors already have been checked by Major League Baseball.

Kuhlmann said that approval may be possible without a full ownership meeting.

"That can be done by conference call, depending on the circumstances," he said.

There appear to be no major obstacles to approval, but Kuhlmann would not speculate on the outcome of the vote.

"I try not to pre-empt the work of the committee," he said.

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