News Briefs: Spring 1998

J.D. Drew loses bid for free agency. See accompanying article.

Opening Day payrolls set new high. According to an AP survey, the 840 players on Opening Day 1998 rosters or the disabled list earned an average $1,441,406, up 4.2%. The median salary rose from $450,000 to $500,000. Baltimore set the pace, with a $69 million payroll; Montreal trailed at $9.2 million. 317 players earned at least $1 million; of these, 216 (more than 2/3) earned $2 million or more.

Owners go 5-3 in arbitration hearings. Nonetheless, the 81 players who filed for arbitration saw their salaries increase by an average of 150%, from $774,323 to $1,936,400. This increase was slightly below 1997's record 154% average raise for arbitration filers. Milwaukee's Jeromy Burnitz paced the players with a fifteen-fold increase, from $225,000 in 1997 to a $3,625,000 average over the course of his new four-year pact.

Owners mulling abolition of DH. Shortly before Opening Day, owners gave the MLBPA one year's notice that they may abolish the DH after the 1998 season. MLB contends that the DH is a playing rule, which under the Basic Agreement can be altered unilaterally on a year's notice, while the MLBPA asserts that its consent is required. The DH issue is tied to the continuation of interleague play, which must be re-authorized by the MLBPA for 1999 and beyond.

Pete Rose damages already-minimal chance for reinstatement. Rose violated the lifetime ban he accepted from then-Commissioner Giamatti in 1989 by talking to Reds farmhands during spring training for an hour. Although Rose recently filed for reinstatement, Acting Commissioner for Life Bud Selig indicated that before considering Rose's petition, MLB will take up Ted Williams' bizarre request to reinstate Shoeless Joe Jackson, a man who admitted under oath that he received $5,000 from gamblers to throw the World Series.

Ticket prices rise an average 10%. According to Team Marketing Report's annual survey, the average ticket now costs $13.60. The Red Sox and Yankees became the first clubs to top $20, while the average cost to see the Twins and Reds remains below $8.50. (By contrast, the average NBA ticket costs more than $36 -- almost three times as much.)

Around the Majors

Boston: The Red Sox are reportedly considering construction of a new park across the street from Fenway Park, which would remain in use during construction. "Save Fenway Park," a local group, has submitted a plan to preserve Fenway's field dimensions while enlarging capacity by 10,000 seats.

Cincinnati: The Cincinnati Post reported that MLB is leaning on Marge Schott to sell her interest in the Reds before her suspension expires on November 1, threatening to extend her suspension for allegedly involving team employees in a scheme to inflate sales figures from her car dealership. MLB denies pressuring Schott. Jacore Communications, which owns the club's flagship radio station, may bid for the club.

Cleveland: The Indians' Richard Jacobs seeks to become the first owner in decades to sell shares in the club directly to the public. The offering, which could raise up to $62.6 million, would be geared toward Tribe fans, not investors - the public offering would take the form of a new class of stock with essentially no voting rights. (MLB's new rules authorize public offerings, but require the controlling owner to retain at least 10% of the equity and 90% of the voting rights.) The Indians' filings report an operating loss of $5.0 million in strike-interrupted 1994, followed by profits of $7.02 million in 1995, $7.73 million in 1996 and $8.2 million in 1997.

Detroit: Tigers owner Mike Ilitch borrowed $145 million from Sumitomo Bank, collateralized by future revenue streams, as the team's contribution toward the estimated $260 million cost of a new stadium, which is presently set to open in time for the 2000 season. The Tigers remain responsible for cost overruns.

Florida: At the spring meetings, MLB's Ownership Committee approved Marlins president Don Smiley as the club's future principal owner. Meanwhile, in the wake of the Sheffield/Bonilla/Johnson/Eisenreich salary dump to rent Mike Piazza and Todd Zeile, several season ticket holders have sued the Marlins for fraud,

Kansas City: A partnership of Chiefs owner Lamar Hunt and Western Resources, a local utility, has become the strong favorite to acquire the Royals from the foundation which has owned the club since Ewing Kauffman's death.

Los Angeles: By a 27-2-1 vote, major league owners approved Rupert Murdoch's purchase of the Los Angeles Dodgers, a deal estimated at between $311 and $350 million. Long-time Murdoch antagonist Ted Turner attended his first owners' meeting in nine years, missing a Time Warner board meeting, to vote No; he was joined by White Sox owner Jerry Reinsdorf. The New York Mets abstained.

Minnesota: The Twins' future remains in limbo following the overwhelming defeat of a referendum in Guilford and Forsyth Counties, North Carolina which would have raised taxes to fund a stadium for the club in the Triad region (Greensboro-High Point-Winston-Salem). The proposal which lost 67-33 in Guilford County and 59-41 in Forsyth County, would have raised $13 million/year for 20 years through a 1% sales tax on restaurant food and a 50-cent surcharge on tickets at the proposed stadium. Meanwhile, in financial statements filed with Minnesota stadium authorities, the Twins claimed a $26.4 million operating loss from 1995-97, and a mediator agreed with their position that these losses and low attendance entitled the club to terminate its lease at the Metrodome after 1998.

New York: According to published reports, Cablevision, owner of the Yankees' broadcast rights, proposed to buy the club for an estimated $500 million. Negotiations broke down over George Steinbrenner's insistence that even if the team is sold, he and his family retain operating control for 15 years.

Following the collapse of a steel expansion joint at Yankee Stadium, George Steinbrenner and his new PR man, Mayor Rudolph Giuliani, called once again for a new $1 billion stadium for the Yankees on Manhattan's West Side. Meanwhile, the Mets unveiled the design for their own proposed 45,000-seat, $500 million park, with retractable dome and retractable field, to be built next to Shea Stadium. Look for much more on these in a future newsletter.

Oakland: Disgusted over their second-class status at the Coliseum, the Athletics are considering possible moves to San Jose or Las Vegas.

Pittsburgh: The Pirates continue to negotiate with local authorities over their contribution to a planned new $228 million, 38,000-seat baseball-only stadium. The Pirates have offered $35 million, but the government wants more

Copyright © 1998 Doug Pappas. All rights reserved.
Originally published in the Spring 1998 issue of Outside the Lines, the SABR Business of Baseball Committee newsletter.

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