Baseball showing a short memory

Latest labor battle indicates '94 lessons forgotten or ignored


May 22, 2002|By Peter Schmuck | Peter Schmuck,SUN STAFF

In the aftermath of the disastrous labor battle that wiped out the 1994 World Series, long-polarized baseball owners and union officials seemed to agree on one very important point:

The industry could not afford to go through such a damaging, torturous process again.

That was seven years ago. Baseball dug itself out of that public relations mess with the help of Cal Ripken, Mark McGwire, Sammy Sosa, Barry Bonds and a new Yankees dynasty, but somewhere along the line, the lessons of 1994-95 seem to have gotten lost in another protracted argument over the economics of the sport.

Fans, who slowly found their way back to the ballpark after a lengthy work stoppage cut short the 1994 season and lingered into the spring of 1995, spent last week wondering just how much of the 2002 season they would get to see before the hardheads on both sides of the bargaining table found a way to shut down the game again.

Reports surfaced that the Major League Baseball Players Association was considering several possible in-season strike dates to head off a potential off-season disruption by the owners. Union director Donald Fehr denied there had been any official discussion of a strike timetable, but the mere fact that a work stoppage was again a hot topic of conversation has thrown a cloud of uncertainty over the remainder of the season.

"People do not want to hear it," said baseball commissioner Bud Selig. "I walked the ballpark in Milwaukee on Friday and Saturday, and I'm very sensitive to that. I'm very concerned. We have tried to low-key things as much as we possibly can.

"Hopefully, we can downplay this and get back to the table and do things at the table."

Yesterday, the sides agreed to resume negotiations Tuesday. They haven't met since May 2.

The basic issues haven't changed much since 1994. The owners aren't asking for a hard salary cap this time, but they have flooded the public debate with tales of financial woe that give a now-or-never tone to their bargaining strategy.

Selig was quoted last week as saying the industry was $4 billion in debt and as many as eight teams were in danger of becoming insolvent. The owners already had gotten the attention of the public in November when they announced their ill-fated plan to fold two franchises (later identified as the Montreal Expos and Minnesota Twins) by Opening Day 2002.

The union has long been skeptical of baseball's dire financial proclamations and has clung tenaciously to the collective-bargaining gains the players have made during the free-agent era. Fehr needs only to point to the recent sale of the Boston Red Sox franchise for $660 million to take issue with the notion that the industry is close to collapse.

Indeed, the debate over contraction raised some interesting questions.

For instance, how could Major League Baseball consider disbanding the Expos when there are two ownership groups in the Washington area willing to pay $300 million or more to relocate the franchise to the nation's capital or its Virginia suburbs? And how could anyone justify folding the Twins when there are prospective owners lining up to bid on the club?

Now, Selig has dialed up the financial rhetoric with his claim that the average indebtedness of each of the 30 major-league clubs is $133 million.

That may be true, but it is a little deceptive, because a great deal of that amount is mortgage-type debt on clubs that are worth vastly more than their total indebtedness. There is a big difference between the growing deficit of a small-market team that isn't meeting expenses and the hundreds of millions of dollars that had to be borrowed to complete the Red Sox sale.

No matter how you look at it, however, no one disputes there are some teams with serious cash-flow problems - a situation that Major League Baseball hopes to correct with its current proposal to raise revenue sharing among all clubs from about 20 percent to 50 percent and to levy a 50 percent luxury tax on payroll above $98 million a franchise.

The union has, so far, resisted the luxury tax (though there was a significant luxury tax in the previous labor agreement) and proposed a lesser increase in revenue sharing.

Fehr has conceded the owners need to share more revenue, but he contends such a heavy transfer of revenues to achieve competitive balance will have a negative long-term effect on the industry because it penalizes the well-run clubs and rewards poor business practices.

"The question is, will that change the entrepreneurial activities of the clubs, when you tax them at that enormous amount - revenue sharing plus luxury tax, plus commissioner's discretionary fund, plus pension cost? ... We think it does," Fehr said in a recent interview with the Chicago Tribune.

"Similarly, if you are going to take somebody who doesn't invest money, doesn't run the club well and says, `Woe is me,' and you're going to say, `OK, here's a check, you don't have to do anything,' does that make that a more efficient, well-run club or not?"

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