Baseball Owners Fail To Agree on Pooling Funds
Small-market teams seek major league financial support to survive
HEADING into important contract talks with players, the owners of Major League Baseball's 28 teams still face a simmering conflict among themselves.
In a marathon two-day meeting last week, owners of teams in big-city markets could not work out a deal with their small-market peers to pool more of their revenue. Such an agreement is seen as crucial for financially struggling teams from small cities where local television revenue is hard to come by.
For a professional sport in which owners have historically wielded monarchical power over their own teams, the meeting was remarkable in itself.
"It seems like the first time they've really tried to air their views," says Andrew Zimbalist, a Smith College economist who wrote a book on the sport from a business perspective. "I was skeptical all along that they would come up with anything."
Such meetings should have begun months ago, Professor Zimbalist adds, since greater revenue-sharing was one of the central recommendations last year of a commission sponsored by players and owners after a 1990 contract dispute.
The major league owners already pool money from national television broadcasts, but only one-fourth or less of the revenue from local broadcasts or ticket sales is shared. This has created wide income gaps between small-city teams such as the Seattle Mariners and big-market rivals. Any new system must be approved by three-fourths of the teams.
"If the big guys think they can survive without the small guys, then I think they're wrong," says Christopher Cameron, a labor-law expert at Southwestern University School of Law in Los Angeles. To the degree that a failure to expand revenue-sharing causes the game to lose popular appeal, the big-market owners will be hurting themselves by not giving up a little more money, he argues.
Fans of the San Diego Padres, for example, have become embittered as their team has sold star players to cut costs.
Income-rich clubs have pushed up overall salary levels, making it even harder for small-market teams to keep up, says Milwaukee Brewers general manager Sal Bando.
A group of 10 big-market teams met in a caucus by themselves for most of the meeting near Milwaukee and failed to agree to increased sharing. Those teams included Baltimore, Boston, Chicago White Sox, Colorado, Florida, Los Angeles, New York Mets, New York Yankees, Texas, and Toronto.
Still, Richard Ravitch, Major League Baseball's chief negotiator with players, said the team owners made enormous progress in last week's meeting:
"I hope in the very near future I will be able to tell you there is a total agreement among the clubs as to how to redistribute revenues among themselves so we can meet our obligation to players under the new economic system we will be proposing to them," Mr. Ravitch told the Associated Press.
For owners, the "new economic system" means trying to put a lid on player salaries.
The owners voted last December to reopen negotiations with players on parts of their collective bargaining agreement, including the minimum player salary of $109,000 and the systems of free agency and salary arbitration.
"Free agency" means a player can put his services up for bids by all teams after six years in the major leagues. Prior to 1976, when players won the right to become free agents, they were tied to one team. Baseball had no free labor market. Since that time salaries have soared.
"Salary arbitration" is the means of resolving salary deadlocks for players with three to five years of service. An arbitrator selects either the player's or management's final contract offer. The bipartisan study panel recommended doing away with arbitration and having players become free agents after three years, Zimbalist notes. Owners generally believe arbitration has been a money-loser for them.
Coming out of last week's meeting, Ravitch said owners had pledged not to lock players out of 1994 spring training, as they did in 1990. This appeared to remove the threat of a player strike before the end of the current season.
But Zimbalist says this concession is "not much of an assurance for players." The real question, he says, is what terms owners will offer in the coming talks.
Owners have been talking, for example, of trying to place a cap on player salaries - a move players strongly oppose.