Players' 'tax plan' fails to avoid owners' veto

September 10, 1994|By Peter Schmuck | Peter Schmuck,Sun Staff Writer

NEW YORK -- The Major League Baseball Players Association tried to coax the owners into a revenue-sharing deal that would have saved the rest of the season, but it did not satisfy management's desire to restrict the growth of player payrolls.

The "tax plan" that would have collected revenues to subsidize struggling clubs figured to affect total salary outlays only subtly, according to a fact sheet produced by Major League Baseball to support the decision to reject it.

The brief analysis points out that the team with the highest payroll would only be penalized $900,000 by the 1.5 percent payroll tax, not enough -- in management's opinion -- to address the payroll disparity between the large- and small-market clubs.

There also was a tax on revenues and a standardized 75-25 split of home gate receipts, which would have cost a high-grossing team such as the Orioles as much as $5.3 million, but ownership negotiator Richard Ravitch said it was inadequate.

"Their revenue-sharing plan transfers less money than our Fort Lauderdale plan," said Ravitch, referring to the revenue-sharing program that would go into effect along with ownership's salary cap proposal. "Our plan transfers $70 million. Their plan transfers only $50 million. They say 'do more revenue sharing,' and they want less than we want."

Of course, if it were just a matter of $20 million per year, the strike would be over. The players and owners are losing that much every three days that the strike goes on. The owners want more control over the growth of player salaries and a fixed percentage of future revenues, though the analysis distributed yesterday continued to couch it in an argument for better competitive balance:

"Revenue sharing does nothing to alter the fundamental forces that drive salary growth and payroll disparity. Revenue sharing or not, the best players are always worth more to clubs in the biggest markets. It is in the economic interest of those large-market clubs to outbid the smaller markets to perpetuate revenue and competitive advantages. Until these fundamental forces are altered, the problems that plague baseball will persist."

The owners conceded that a large enough payroll tax could limit salaries but charged that the union proposal was structured to minimize the impact of the tax. That left open the question of why the owners did not counter with a proposal that called for a much higher tax.

That isn't difficult to figure out. If the owners make a counterproposal that does not include a salary cap, they lose the legal right to impose a salary cap if they declare an impasse in the negotiations. They would only be able to implement their last best offer.

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