Recent Developments - Summer 1995

Having already alienated the players, the fans, much of Congress, the NLRB and the federal judiciary, Major League Baseball's executives eagerly reached out to antagonize more groups. They began with local taxpayers, announcing at their June quarterly meetings that no fewer than eleven teams -- Boston, California, Detroit, Milwaukee, Minnesota, Seattle, Cincinnati, New York Mets, Philadelphia, Pittsburgh, and San Francisco -- would soon need new stadia, requiring at least $2.5 billion in public funds. In connection with Seattle's bid for a new ballpark, which goes before the voters in September, John Pastier writes that while the Mariners' contribution is capped at $45 million, Mariners CEO John Ellis described as "not acceptable" King County's proposal to limit its own share to $240.8 million plus free downtown land. Pastier also observes that the new stadium would slash Mariners' general-admission seats by 84%, from 18,100 to 2,900, and notes that the Mariners' current lease gives them 57.57% of concession revenues: $4 out of every $7 spent at the park.

Then the owners casually thumbed their own local media outlets in the eye. After about 30 seconds' deliberation, they adopted a plan to speed up the game which, by shortening between-inning breaks in the middle of the season, would force local TV and radio stations to choose between sacrificing eight minutes of pre-sold ads (a loss of $50,000 per game in some local TV markets) or missing the first pitches of every half-inning. Games on national television were conveniently exempt from this speed-up rule, which was eventually modified before it took effect. Undeterred by this fiasco, for next season MLB plans to "serve the fans by speeding up the game" with larger strike zones and higher pitchers' mounds -- both of which will antagonize fans by reducing offense. And with pre-strike attendance at an all-time high, the fans weren't exactly clamoring for these moves, either...

While no one's shedding tears over the demise of The Baseball Network, its messy death further tarnished baseball's image. NBC and ABC executives publicly trashed MLB's inability even to address basic issues about its own future. As ABC Sports President Dennis Swanson told the St. Louis Post-Dispatch, "For the life of me, with these people expressing such a dire need for money, I can't understand why in the most lucrative market perhaps in television history, they're the only ones not capitalizing on it. I don't know where major league baseball is going, and that's sad for me because I love the sport." Meanwhile, with The Baseball Network about to "treat" fans to a postseason in which, thanks to regionalization, more than half the games will be unavailable in their market, two months before the start of this farce Acting-Commissioner-for-Life Bud Selig says in Baseball America: "There's no question that while we've made a lot of mistakes, this is about the greatest one. Unfortunately, there may be nothing we can do about it right now." Way to lead, Bud!

Then there's the little matter of labor negotiations. In the 4-1/2 months since Judge Sotomayor's injunction ended the strike, the owners haven't been able to form enough of a consensus among themselves even to return to the bargaining table...though that hasn't stopped Braves President Stan Kasten, among others, from publicly blaming the players for the delay. In a delicious bit of poetic justice, though, the hard-line owners have only themselves to blame for the injunction. Although labor law would allow the owners to impose the terms of their most recent contract offer in the event of a bargaining impasse, the hard-liners weren't satisfied. Instead they tried to create Jerry Reinsdorf's dream world by force, proclaiming an absolute, unilateral right to abolish salary arbitration, rescind the anticollusion provisions under which they had three times been found liable for violating the players' rights, and require free agents to negotiate with a central management bargaining unit rather than seek the highest bidder from among the individual teams. According to the owners, these moves were legally justified because arbitration, free agency and the like weren't mandatory subjects of collective bargaining.

If their lawyers actually recommended this tactic, MLB may have a nice malpractice action: less than two weeks before the owners acted, the Second Circuit Court of Appeals, which all parties knew would hear the expected NLRB challenge, reaffirmed its 1987 decision which held that the NBA's "College Draft, Right of First Refusal, and Revenue Sharing/Salary Cap System are mandatory subjects of bargaining." NBA v. Williams, 45 F.3d 684, 691 (2d Cir. 1995). Two of the three judges who laughed the owners' emergency appeal out of court poured salt in the wound by suggesting that if the owners had settled for implementing their own proposal, they might well have won the case. Thus the overreaching of hard-line owners may have led directly to an injunction which forced them to operate in 1995 under terms worse than those offered by the players, and which forbids them from declaring another impasse without the court's permission. Meanwhile, for the first time a Senate subcommittee has voted to repeal baseball's antitrust exemption -- a bill which, if enacted, could allow the players permanently to block any salary cap or luxury tax by decertifying their union.

(And I'm sorry, Gary Hailey or John Thorn or whoever butchered my Total Baseball essay, this is not an "implausible scenario" -- the NFLPA won free agency by decertifying in just this manner, and the NBA players' threatened decertification forced the league to renegotiate its new labor agreement. In fact, decertification would be even easier for the MLBPA, since the players could simply retain the new law firm of Fehr, Rich & Orza to manage their licensing programs and provide incidental labor-relations advice to individual players.)

Meanwhile much of the media, with ESPN the most egregious offender, described every on-field development as evidence that small market teams could no longer compete. Never mind that the Reds and Rockies, in two of baseball's four smallest markets, were leading their divisions while the Brewers and Royals, in the two smallest, contended for the AL wild-card berth. Never mind that the flood of last-minute trades saw the Reds and Mariners acquiring talent while the Mets and Blue Jays sold it off, or that the Angels and Indians were running off with pennants despite Opening Day payrolls over $10 million below those of the Braves, Yankees or Blue Jays. Moreover, a substantial body of economic literature suggests that while greater revenue sharing would reduce total player salaries and make small markets more profitable, it would have little or no effect on competitive balance. As always, good management means more than market size.

Copyright © 1995 Doug Pappas. All rights reserved.
Originally published in the Summer 1995 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.

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