The Baseball Wars
Here we go again: the endless public squabbles, the rancorous dialogues that end up going nowhere, the threats and accusations and screaming matches. And that's just WFAN.
Sports-business reporting isn't American journalism's strong point in the best of times, and labor-related work stoppages always seem to bring out its worst. In anticipation of the load of spin doctoring and horse-race coverage that will no doubt accompany this summer's baseball labor wars, the Voice would like to debunk some of the sport's more firmly held misconceptions. So here's the real deal:
Baseball is not in crisis. If you believe MLB commissioner Bud Selig, anywhere from six to eight teams are on the verge of bankruptcy. Of course, if you believe Bud Selig, that makes one of you. Baseball's economic figures are essentially fictitious in the best of timesthis is an industry that makes heavy use of Arthur Andersen, after alland during labor negotiations, truth is the first casualty. " 'We lost a half billion dollars last year'that all uses bad math," says a disgusted Joe Sheehan of the seamhead bible, Baseball Prospectus. "At least Don Fehr has never stood up and told me that Alex Rodriguez made $7.75 an hour last year."
"Revenue sharing" will not help the Royals compete with the Yankees. Leaving aside whether the Royals could compete with the Yankees even with George Steinbrenner's checkbooknotice which team is paying Chuck Knoblauch $2 million to be its leadoff "hitter"the proposals bandied about by Selig would do little to help matters. "These solutions are great for lowering salaries, but that's really all they do," says Sheehan. "If the Yankees can only keep 50 percent of every dollar Jason Giambi brings in, that's going to affect how much they pay Jason Giambi."
And even if MLB were to somehow transplant both $50 million and Brian Cashman's cerebral cortex into the Royals' front office, there's every reason to believe that the big-market teams would still outspend the small-market ones. A star player will always be worth more in New York, notes sports economist Rod Fort, because the fannies he puts in the seats are worth more there: "There's no reason for Kansas City to put any revenue reallocation into team quality, because their fans won't pay for it."
"Selig talks of financial success and on-field success as if they were interchangeable," says Baseball Prospectus business columnist Doug Pappas. "But one thing the current revenue-sharing formula has proved is that it's possible to remain solvent and field a terrible team." Owners have proposed a $45-million-a-year "salary floor" to encourage teams to spend revenue-sharing money instead of just pocketing it, but as Pappas points out, "the devil is in the details. It could effectively force bad teams to do things like sign Derek Bell just to get their payroll up."
Lowering player salaries would not bring down ticket prices. High ticket prices do drive up player salarieswhen owners have more money to throw around, life is bery, bery good to the Kevin Browns of the worldbut the reverse simply isn't true. Owners already gouge fans for as much as they figure the market will bear, and the numbers bear this out: After free agency drove salaries through the roof in the late '70s, for example, ticket prices held largely steady. (Note also the NCAA, which charges top dollar for tickets despite no payroll costs at all.)
The union's vote to authorize a strike date doesn't mean the players want a strike, and Selig's promise not to impose a lockout doesn't mean the owners want to keep playing. The players are, in fact, largely happy with the status quoas they should be, having won every labor showdown dating back to the mid '70s. But thanks to the convolutions of labor law, the union fears that if it doesn't strike before the playoffsthe teams' main cash cowthe owners will attempt to declare an impasse in bargaining and simply impose a new economic structure without consulting them.
The owners tried similar brinkmanship in 1994, and were slapped down by the National Labor Relations Board for bargaining in bad faithbut this is no longer 1994, and the owners apparently hope a Bush NLRB will be more sympathetic to their cause. It's a huge gamble, but "if they win, they've hit the mother lode," notes Sheehan, breaking the union and earning themselves billions of dollars. If they lose, of course, they alienate fans and end up maintaining the economic status quojust like in 1994.
"People are saying that's the owners' plan, but what's not being emphasized is that's the only owners' plan. There's not even a thought of negotiation," says Sheehan, adding, "If Florida goes differently, this whole situation might be different."
Contraction is not on its way. Even if Selig really does want to trash two teamsand many still doubt it's anything more than a tactic to keep the union and local stadium voters running scaredhe's fast running out of candidates. The Twins are probably already safe, thanks to a clever lawsuit that scared MLB into committing the team to stay put in 2003 for fear of having to open its books, and to a tentative stadium deal approved last month in Minnesota. That would leave Tampa Bay as Montreal's likely contraction partnerexcept that Devil Rays owner Vince Naimoli wants no part of it. Moreover, Florida's attorney general is champing at the bit to challenge baseball's antitrust exemption if any of his state's teams are axed, meaning the Marlins are safe as well. Which leaves . . . Bud's own Brewers?
Selig is not clinically insane. An alien mind-control device has not been ruled out, however.
If the players strike, the season isn't necessarily a goner. Fay Vincentremember him?suggested recently that baseball owners are so heavily leveraged that their bankers would force them to cut a quick deal just to maintain cash flow. Another wild card could be Fox, which according to its contract must pay MLB $400 million a year whether there are games or notand which, as owner of the Dodgers, has the perfect platform to pressure other owners. "Can you imagine the size of the writeoff they'd have to take if this melted down like '94-'95?" says Pappas. "You've got to imagine their person at the bargaining table is going to read the riot act to them about what they can expect over the next few years if they don't reach a deal."
With Selig's $1 million fine for owners who break silence on labor matters, and no strike date set as yet, observers emphasize there's no way of knowing whether we're headed for a 1985-style two-day walkout or a 1994-type meltdown. One key indicator to watch, suggests Sheehan, is the strike date ultimately set by the union. "If the players set a strike date of August 14 or whatever, it will be an indication that they want a quick result, and to play out the rest of the season," he says. "The later the strike date, the more worried I would be. The players would be saying: Let's collect as many checks as possible, because we don't think this is going to be resolved."
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