TOO HIGH ROLLERS? : Dodgers’ O’Malley Makes a Pitch for Restraint in Payroll Spending

The Dodgers’ recent recall of outfielder Chris Gwynn to replace the injured Kirk Gibson did more than reshape the roster.

It provided the club with at least one player earning less than $100,000 a year.

Gwynn has a split contract. He makes $80,000 with the Dodgers or $40,000 at Albuquerque.

Club owner Peter O’Malley sat in his office at Dodger Stadium the other day and attempted to make dollars and sense of a payroll that increased about 20% over the winter and is baseball’s highest ever.

He called for economic reform.

“The system we now have hasn’t worked, isn’t working and won’t work in the future,” O’Malley said.

“The concern over player payrolls is real--both on my part and throughout the industry.”

Is this at odds with the portrait of improved profitability painted by Peter Ueberroth when he stepped down as commissioner on March 31?

O’Malley would not comment on anything Ueberroth might have said.

The former commissioner frequently cited the industry’s economic growth during his administration but never said that the system, as it pertains to player signings and movements, was working. He obviously believed that it wasn’t, in fact, because it was allegedly under his auspices that collusion occurred.

Of the call for reform, Donald Fehr, executive director of the Major League Players Assn., said:

“The system helped the Dodgers win a World Series last year. The O’Malleys have become fabulously wealthy because of the system, and still they complain. I don’t know what to make of that. If anyone has no reason to complain it’s Peter O’Malley.”

Said O’Malley: “Our club will continue to do fine, but for the sake of the clubs in general there has to be a change. We can survive if the industry can survive, but we can’t survive in a vacuum.

“If we’re going to have baseball in the smaller markets, if we’re going to expand, we have to find a system which allows both sides to prosper. I’m not saying roll back salaries or bring back the reserve system.

“For a long time the owners had all the leverage and abused it. Now the players have all the leverage. In many cases they’re not being paid for performance as much as for being in the right place at the right time.

“I mean, if they’re looking at free agency in a year, it’s likely they’ll get a three-year contract for a staggering amount.

“There has to be a middle ground. There has to be a better way to compensate the players.”

Preparing for expiration of the collective bargaining agreement at the end of the season, the owners are examining their options.

Collusion is out. Faced eventually with major penalties for their sins of the previous three winters, penalties that could erode Ueberroth’s portrait of profitability, the clubs reopened the market during the recent off-season with a spending spree reminiscent of their undisciplined response to free agency in the 1970s.

Baseball salaries rose about 14.6% last winter, the opening-day average climbing from $447,291 a player in 1988 to $512,804.

So now what? Which avenue will the clubs choose within the framework of a new bargaining agreement?

Salary caps? Revenue sharing? Tighter restrictions on free agency, arbitration or both? Abolishment of one or the other? More equitable distribution of cable TV money, such as the 12-year, $500-million contract that the New York Yankees recently signed with the Madison Square Garden network?

O’Malley said he has some thoughts on the subject but wouldn’t reveal them. He will leave the inevitable war of words to others.

“We need to hold hands and work together,” he said of management and the union. “Instead of bashing each other, we need to be creative.”

One of the creations the owners already have in place is a spring lockout date if a collective bargaining agreement hasn’t been signed.

“I don’t understand the purpose of that other than to force the players to accept a rollback,” Fehr said. “I think the clubs have already decided to go through the motions (of negotiating a new contract), then stage the lockout.

“They don’t like free markets and it has always been their goal to convince the players to accept a system that will produce lower salaries. I hope I’m wrong, but they seem determined to provoke a confrontation.

“It may be posturing, but a bunch are already talking publicly.”

And Fehr, of course, doesn’t accept a lot of what he is hearing.

If baseball needs a new system, he said, why did 58% of the Texas Rangers, who have never even won their division title, sell for an estimated $25 million?

Why, he wondered, is it virtually impossible even to put a price tag on the Dodgers or Angels?

“Look at revenues,” he said. “The new national television contracts (effective next year) represent about $15 million to each club or more than $600,000 for each player in the major leagues.

“That’s before tickets, concessions, parking, licensing and local TV-radio are factored in.”

The average major league ticket sold for $7.17 last year. If every visitor to Dodger Stadium spent a modest $12 for his ticket, food, gifts and parking, that alone would be more than $36 million.

Then there’s the $15-16 million from national TV, the estimated $15 million to $18 million from local TV and radio, the $500,000--a figure rising rapidly--from major league licensing, the undisclosed shares from appearances on opposing clubs’ cable networks and what is believed to be significant income from the 400 acres that the Dodgers own in Florida.

O’Malley obviously isn’t hurting. Neither is he crying. He is merely addressing the industry’s stability, speaking on behalf of clubs that do not own their stadiums and do not operate in a market of Southern California’s size.

And, he said, even the Dodgers cannot afford a 20% payroll increase every year, cannot have the payroll double every two years, as his has.

Consider:

--The 1989 salary commitment to the 25 players, including the sidelined John Tudor, who were with the club opening day is $22,193,555, the highest ever. The figure does not include signing bonuses from previous winters but does include $2,050,000 in signing bonuses given to Orel Hershiser, Jay Howell, Mike Marshall, Alejandro Pena and Alfredo Griffin last winter.

--The average of $887,742 is also the highest ever, of course, and the Dodgers are the first club to open a season with the entire roster earning $100,000 or more. The Dodgers, in fact, have seven players making $1 million or more.

This year, as well, in inheriting Mike Morgan’s $375,000 contract from the Baltimore Orioles, the Dodgers have broken a policy and accepted incentive provisions. Morgan can make another $150,000 in award and appearance bonuses.

The Angels, believing that incentives help reduce guaranteed terms in some cases, have a $12.3 million payroll but could dole out another $2.5 million if every incentive is realized.

How did the Dodger payroll climb so far so fast?

Cynics might suggest that it was too low to start with, that during the disastrous 1986 and ’87 seasons the club ignored the availability of Tim Raines and other free agents because of a commitment to collusion.

O’Malley, however, said that the Dodgers’ commitment to winning has been continuous, and that at a time when it is impossible to build strictly through the farm system, supplemental trades and free-agent signings are bound to inflate a payroll.

He cited the signing of Gibson to a three-year, $4.5-million contract and the trade for Eddie Murray, who is guaranteed $2.5 million, $2.7 million and $2.8 million in the final three years of a five-year contract he signed with the Orioles, who are believed to be picking up the $500,000 of each year’s salary that Murray has deferred.

Of the 24 active Dodgers, only 10 are home grown.

Is the club also paying a price for winning the World Series?

“I don’t think that has anything to do with it,” O’Malley said. “If we had lost the World Series or lost the playoffs or finished second in the division, what players would have been signed for less?”

It seems obvious, however, that the Dodgers’ postseason success strengthened the bargaining power of several players and made the club more responsive to negotiation demands, including those of Hershiser, whose three-year, $7.9-million contract will make him baseball’s highest salaried player.

“We went higher than we planned with Orel,” O’Malley said. “People say to me, ‘Peter, you didn’t have to sign him,’ and I always say, ‘That’s fine, do you have any other suggestions?’

“I mean, if we don’t sign him, then he probably leaves as a free agent when the season is over.”

ANGEL CONTRACTS

Player 1989 1990 1991 Jim Abbott $68,000 ---- ---- Kent Anderson $68,000 ---- ---- Tony Armas $425,000 ---- ---- Bert Blyleven $1,215,000 club option ---- $1,175,000 or $200,000 buyout Chili Davis $1,275,000 $1,375,000 1,450,000 Brian Downing $1,250,000 club option ---- $1,250,000 or $150,000 buyout Chuck Finley $180,000 ---- ---- Willie Fraser $200,000 ---- ---- Bryan Harvey $170,000 ---- ---- Glenn Hoffman $160,000 club option ---- at $200,000 Jack Howell $465,000 ---- ---- Wally Joyner $920,000 ---- ---- Dan Petry $785,000 ---- ---- Johnny Ray $850,000 ---- ---- Dick Schofield $825,000 $900,000 1,400,000 (1) Bill Schroeder $372,500 ---- ---- C. Washington $875,000 $575,000 875,000 (2) Devon White $320,000 ---- ---- Mike Witt (3) $1,400,000

Player Incentives Jim Abbott ---- Kent Anderson ---- Tony Armas $25,000 awards at 50 games or 200 plate appearances; 75 games or 250 plate appearances 100 or 300; 110 or 350 120 or 400; 130 or 450; 140 or 500 Bert Blyleven $50,000 for Cy Young award; $50,000 for league MVP; $50,000 for All-Star game; $25,000 for playoff MVP; $25,000 for World Series MVP Chili Davis $50,000 award at 130 games and 150 games; $50,000 if AP, UPI or Sporting News All-Star; $50,000 for playoff MVP; $50,000 for World Series MVP; $50,000 for Silver Slugger Award; $50,000 for league MVP; $50,000 if elected to All- Star game and $15,000 if selected by manager Brian Downing ---- Chuck Finley ---- Willie Fraser ---- Bryan Harvey $15,000 if selected to All-Star game Glenn Hoffman $10,000 awards at 70 games, 210 plate appear- ances, 80 or 240, 90 or 270, 100 or 300, 110 or 330, 120 or 360, 130 or 390, 140 or 420, 150 or 450; $25,000 for comeback player of year Jack Howell $5,000 for 530 plate appearances; $5,000 for 560 plate appearances Wally Joyner $25,000 for 140 games; $50,000 for All-Star selection Dan Petry ---- Johnny Ray $50,000 awards at 130 games and 150 games; $50,000 for All-Star selection Dick Schofield Gold Glove awards of (1) $25,000 if first, $15,000 if second and $10,000 if third; $50,000 for league MVP; $25,000 for playoff MVP; $25,000 for World Series MVP; $25,000 if elected to All-Star game and $25,000 if selected by manager Bill Schroeder $13,750 awards at 50 games and 75 games C. Washington $25,000 awards at 125 (2) and 145 games; $50,000 for league MVP and $25,000 if second through fifth in voting; $50,000 for playoff MVP; $50,000 for World Series MVP; $25,000 if elected to All-Star game and $10,000 if selected by manager Devon White $10,000 for 145 games; $25,000 for Gold Glove; $25,000 for All-Star selection Mike Witt (3) $50,000 for Cy Young; $50,000 for All-Star selection; $50,000 for league MVP; $25,000 for playoff MVP; $25,000 for World Series MVP

1--Dick Schofield received a $250,000 signing bonus with his new contract.

2--Claudell Washington received at $300,000 signing bonus with his new contract.

3--Mike Witt is in the second year of a two-year contract. He received a $1.4-million salary in 1988.

DODGER CONTRACTS

Player 1989 1990 1991 Dave Anderson $420,000 ---- ---- Tim Belcher $225,000 ---- ---- Tim Crews $130,000 ---- ---- Mike Davis (1) $987,500 ---- ---- Rick Dempsey $420,000 ---- ---- Mariano Duncan $200,000 ---- ---- Kirk Gibson (2) $1,000,000 $1,000,000 ---- Alfredo Griffin $900,000 $900,000 club option (3) at $900,000 Chris Gwynn $80,000 ---- ---- if in the majors, $40,000 if in minors Jeff Hamilton $150,000 ---- ---- Mickey Hatcher $450,000 ---- ---- Orel Hershiser (4) $2.4 million $1.6 million $2.8 million Ricky Horton $580,000 ---- ---- Jay Howell $800,000 $800,000 club option (5) at $1,050,000 or $300,000 buyout Tim Leary $670,000 ---- ---- Mike Marshall (6) $1,000,000 $1,000,000 $1.2 million Ramon Martinez $80,000 if ---- ---- in majors $35,000 in minors Mike Morgan $375,000 ---- ---- Eddie Murray (7) $2.5 million $2.7 million $2.8 million Alejandro Pena $775,000 $875,000 club option (8) at $1 million or $300,000 buyout Willie Randolph $875,000 $875,000 ---- Mike Scioscia (9) $1.1 million ---- ---- Ray Searage $141,000 ---- ---- John Shelby (10) $550,000 ---- ---- Franklin Stubbs $345,000 ---- ---- John Tudor $1.3 million ---- ---- Fernando $1,850,000 ---- ---- Valenzuela

Player Incentives Dave Anderson ---- Tim Belcher ---- Tim Crews ---- Mike Davis (1) ---- Rick Dempsey ---- Mariano Duncan ---- Kirk Gibson (2) ---- Alfredo Griffin ---- (3) ---- Chris Gwynn ---- Jeff Hamilton ---- Mickey Hatcher ---- Orel Hershiser (4) ---- Ricky Horton ---- Jay Howell ---- (5) Tim Leary ---- Mike Marshall (6) ---- Ramon Martinez ---- Mike Morgan $25,000 for comeback player award $25,000 awards at 150 innings or 45 points (based on 2 points for start and 1 point for relief appearance), 175 innings or 50 points, 200 innings or 55 points, 225 innings or 60 points, 250 innings or 65 points Eddie Murray (7) ---- Alejandro Pena ---- (8) Willie Randolph ---- Mike Scioscia (9) ---- Ray Searage ---- John Shelby (10) ---- Franklin Stubbs ---- John Tudor ---- Fernando ---- Valenzuela

1--Mike Davis is in the second year of a two-year contract. He received a $987,500 salary in 1988 and is guaranteed a $400,000 loan.

2--Kirk Gibson is in the second year of a two-year contract. He received a $1-million signing bonus and a $1.5-million salary in 1988.

3--Aldredo Griffin received a $200,000 signing bonus with his new contract.

4--Orel Hershiser received a $1.1-million signing bonus with his new contract.

5--Jay Howell received a $250,000 signing bonus with his new contract.

6--Mike Marshall received a $300,000 signing bonus with his new contract.

7--Eddie Murray is in the third year of a five-year contract signed originally with the Baltimore Orioles. He received an $800,000 signing bonus and salaries of $2.3 million in 1987 and $2.4 million in 1988. He has $500,000 a year deferred.

8--Alejandro Pena received a $200,000 signing bonus with his new contract.

9--Mike Scioscia is in the fourth year of a four-year contract. He received salaries of $800,000 in 1986, $875,000 in 1987 and $1 million in 1988.

10--John Shelby is in the second year of a two-year contract. He received a $465,000 salary in 1988.