FINANCIAL INFORMATION PROVIDED TO THE UNION
1.
During collecting
bargaining in 1985, the Clubs provided the Union with their financial
statements for the first time. The
Clubs provided detailed audited financial statements and financial information
questionnaires for each Club and consolidated industry financial
statements. These statements provided a
detailed accounting of the Clubs’ revenues and expenses, on both an operating
and net basis, and broke out the various revenue and expense categories in detail.
2.
During the free agent
litigation of the late 1980s, the Clubs provided the Union with this same
detailed Club-by-Club and industry revenue and expense information for all
years that the Union did not receive in 1985.
3.
During the 1990
collective bargaining negotiations, the Clubs provided the Union with all
audited financial statements and financial information questionnaires and
consolidated industry financial statements containing the same detailed revenue
and expense data for each Club for the years not yet provided during the 1985
bargaining or during the course of the free agent litigation. The Union never once complained that it was
not provided with every financial document that it sought.
4.
The 1990 Basic
Agreement established a Joint Economic Study Committee (“Study Committee”)
which consisted of Union and Club appointed experts. Don Fehr was a co-chair of that Committee and the Union and its
staff had access to all of the financial information and data that was provided
to and produced by the Study Committee.
The Committee was charged with studying and reporting to the parties on
the overall economic condition of the industry. The Study Committee hired its own staff of economists who sought
and received the Clubs’ financial statements and other financial information
dating back to 1978. Upon its review,
the Committee staff concluded that the financial data regularly complied by the
Clubs, with the assistance of Ernst & Young, “are probably more consistent
and accurate than data for most other American industries.” In addition to all of the typical
Club-by-Club financial statements provided to the Committee, several individual
Clubs made presentations to the Study Committee and revealed aspects of their
business in even greater detail than is provided to Central Baseball and the
Union during the normal course of business.
5.
Again, during the
1994-1996 collective bargaining negotiations, the Clubs provided the Union with
all of the same detailed Club-by-Club and industry revenue and expense information,
audited financial statements and financial information questionnaires and all
other requested information covering the years following the work of the Study
Committee. The Union hired its own
“experts” to review this data and never once complained that it was not
provided with every financial document that it requested.
6.
Since 1997, the Clubs
have, pursuant to Article XXV of the Basic Agreement, provided the Union with
regular local revenue estimates, broken down by the major revenue categories, for
each Club on May 15, July 15, September 25, November 15 and March 31 of each
year. The Clubs, also pursuant to
Article XXV, have on an annual basis provided the Union with the audited
financial statements and financial questionnaires of each Club and the
industry’s consolidated financial statements.
They also have provided the Union with the results of the separate
audits that are done of the Clubs’ books each year by an independent auditor
hired pursuant to Article XXV. The
Union has the right under the Basic Agreement to conduct its own audit of any
Clubs’ books and it has never done so.
Further, the Union has the right under the Basic Agreement to file a
Grievance challenging a Club’s reporting of its revenues and it has never done
so.
7.
On December 1, 2000,
in connection with the commencement of early Basic Agreement negotiations and
in response to a specific Union request, the Clubs provided the Union the
following financial data:
a.
A flash forecast of
the Clubs’ revenue and expense projections for the 2000 season.
b.
A Club-by-Club debt
breakdown for the years 1996-1999 for all Clubs.
c.
Ticket and concession
price information for the period 1995-1999.
d.
Payroll quartile data
for the period 1982-1990.
e.
For Florida, Kansas
City, Minnesota, Montreal, Oakland, Tampa Bay and Toronto:
(i)
Franchise sale
agreements;
(ii)
A breakdown of gate
revenue by tickets class and suites for the period 1996-1999;
(iii)
Lease agreements;
(iv)
Local media contracts;
(v)
Debt and financing
information; and
(vi)
Concession,
advertising and signage contracts (for Toronto only).
8.
In March 2001, the
Clubs provided the Union with:
a.
Audited financial
statements of the Major League Central Fund and Major League Baseball
Properties for 1999 and 2000.
b.
Updated projections of
the Clubs’ 2001 revenues.
c.
Attendance detail,
including the impact of “no shows,” for the 2000 season.
d.
A breakdown of Central
Fund revenues and expenses for the period 1996 through 2000.
e.
A forecast of Central
Fund revenues for 2001 through 2012.
f.
A listing of the
expiration dates of all local media contracts.
g.
A detailed breakdown
of the Clubs’ amateur player acquisition costs for the period 1990 through
1999.
h.
A detailed analysis of
local revenue and local expense growth of the Clubs for the period of 1990
through 2000.
i.
Detailed information
on the Clubs’ debt service obligations over the period 2000 through 2003.
9.
In September 2001, the
Clubs provided the Union with:
a.
Updated Club-by-Club
projections of 2001 revenues and expenses.
b.
A detailed breakdown
of the industry’s increasing debt obligations during the period of 1991 through
2001.
10.
In October 2001, the
Clubs provided the Union with unprecedented detail on the
Clubs’ growing debt, including the sources of the
debt and the uses to which the debt
has been put.