The `Big Show' Is Cancelled As Baseball Strikes Out
As TV revenue shrinks, both sides may have to cut back
CORPORATE America has been tightening its belt for the past five years. Is it that time for professional sports as well?
One of the lessons of the Major League Baseball season, canceled on Wednesday after the players struck for 34 days, may be that professional sports is no different from any other business. If expenses get out of hand, or revenues begin to dip, it may be time to check the belt holes.
``If the owners are now digging in their heels and the advertisers are not coughing up the same amount of money, it is a turning point,'' says Audrey Friedman, a labor economist.
Marvin Kosters, a labor economist at the American Enterprise Institute for Public Policy Research in Washington, observes that executive salaries soared in the 1980s. ``It was not easy to explain why that occurred the same way. It is not easy to explain why players' salaries rose so much,'' he says. But, he adds, growth in executive salaries has slowed.
Mr. Kosters notes that professional football has tried to slow down the growth of players' salaries with a cap. That's the aim of the baseball owners as well. The owners contend that players' salaries cut too deeply into the $1.7 billion in estimated revenues. The owners want to cap salaries for the 28 teams at 50 percent of revenue.
The salaries have skyrocketed because of bidding for free agents such as Barry Bonds, who signed a six-year $43.75 million contract with the San Francisco Giants. Andrew Schotter, an economics professor at New York University, believes the two sides could negotiate a new way of bidding for free agents that would help to control costs. ``The players may not like it since this [current] set of rules favors them, but with other rules, you can have different outcomes,'' says Schotter who has proposed such a system to the owners.
THE players have countered with a plan to tax the payrolls of large market teams, such as the New York Yankees. The tax revenue would be split among the smaller market teams, such as the Milwaukee Brewers and the San Diego Padres.
The owners have rejected this proposal. It is difficult to determine how much or if teams make profits since they are not legally required to open their books.
But there are some major differences between baseball, a legal cartel, and the real world. ``It is not as if someone is selling another sport to the same TV stations with the same national appeal and the romance of baseball,'' says Ms. Friedman.
Hockey and basketball, however, now stretch into June and football starts its pre-season in August. All sports compete for a limited amount of advertising dollars. This is reflected in a new, potentially less lucrative baseball contract with ABC and NBC.
And, of course there is a difference between the striking baseball players and striking workers elsewhere.
On the diamond, the average wage is $1.2 million. Strikers will receive $10,000 a month in strike benefits from a $200 million strike fund.
By way of comparison, the 300 Teamsters striking Diamond Walnut in California have been on the picket line since 1991. Until this summer they received $200 per week. Then, the strike fund ran out of money. Now, they have no strike benefits. ``People have had to make drastic life decisions,'' says Barbara Christe, an international representative for Local 601 in Stockton, California. Despite the disparity, Ms. Christe does not harbor any ill will toward the players.
Whether the good will continues is unclear. ``I think the strike presents an enormous challenge for baseball,'' says Andrew Zimbalist, a professor at Smith College and author of the book ``Baseball and Billions.''
This is the third strike to hit baseball and the eighth work stoppage, including five management lockouts. In the past, the fans have willingly returned to cheer on the boys of summer. ``This time I'm not so sure,'' says David Whitford, author of ``Playing Hardball,'' a book about the expansion teams. ``I know this time I don't care if they ever come back.''
He's not alone. A Gallup poll for USA Today and CNN, in early September, found that 52 percent of the baseball fans polled did not miss the game or only missed it a little. Many fans have already shifted to football.
The baseball stalemate could last until the spring. Mr. Zimbalist, a consultant to the players' union, says the owners may try to open spring training with minor league players and players who will cross picket lines. ``This is potentially extraordinarily messy,'' he adds.
If the owners turn to minor league players, they risk alienating such die-hard baseball fans as Rob Becker, a Manhattan lawyer. ``I would be utterly disgusted and not pay one bit of attention to baseball if they ever tried to do that,'' he says. ``It would fall flat on its face.''