Share and Share Alike? : Baseball: Owners to discuss how much they will help each other, with possible strike looming.

Against the backdrop of a possible players’ strike next month, major league baseball owners will meet in Kohler, Wis., next week to try to agree on a formula for increased revenue sharing between the big- and small-market teams.

A new formula, requiring approval of 21 of the 28 teams, would be contingent on the players’ union then accepting a new compensation system based on a salary cap and designated percentage of revenue going to salaries.

But the union has been buoyed by the $173-million sale of the Baltimore Orioles, and it dismisses the owners’ claims of economic trouble. The players are not inclined to change the system, no matter what the owners do in Wisconsin, where the tranquillity is likely to be shattered by the search for 21 votes and a formula that will satisfy big- and small-market teams alike.

“I understand some owners who oppose revenue sharing will vote for it, relying on us to kill it,” Don Fehr, the union’s executive director, said of the eventual bargaining.

However, Peter O’Malley, president of the Dodgers, said he supports the concept of increased revenue sharing tied to the price controls of a salary cap, and hopes that the 21 votes for a specific formula will be in hand before the owners gather for their three-day retreat.

“Anyone voting no should have an alternative, and I don’t know of an alternative,” O’Malley said.

While the clubs continue to discuss concepts and refinements, no specific resolution has yet been presented for consideration.

The questions persist:

--Will there be greater sharing of ticket sales and/or local TV-radio revenues; or in what seems to be the more popular concept, will revenue simply be shared on a percentage of each team’s gross?

--How are revenues defined?

--What is a small-market team?

Richard Ravitch, president of the owners’ player-relations committee, calls it an obviously complicated situation he won’t discuss publicly other than to say the competitive and economic future of the game requires a new system of sharing among the owners and a new compensation system with the players.

“I won’t call it Armageddon, but it is a crossroads if the game is going to grow and prosper as it should,” Ravitch said. “The industry had revenues of about $1.7 billion last year, and the majority of teams still lost money. The current system doesn’t work anymore.”

Since exercising an option and voting, 15-13, on Dec. 7 to reopen collective bargaining negotiations a year before the agreement expires, the owners have taken eight months to get to this point, while the suspicious union sits and waits.

The union has long contended that if there are economic problems, the owners should help themselves before asking the players to do it for them; and simply because the owners agree to share more revenue--if, indeed, they do so--does not automatically mean the players will accept a salary-cap system.

“It’s important for the long-term interest of the sport that the owners revisit their outdated revenue-sharing formulas,” said Eugene Orza, the union’s associate counsel, “but they have no right to think that increased sharing entitles them to a suspension of the laws of economics and the free-market system.

“They have no right to come to the players and ask them to make bargaining concessions until they have lived for a time with a new formula. I mean, just because the owners say there is a linkage between increased revenue sharing and a salary cap, there is no conceptual reason for the players to create a system that reduces and restricts salaries as a payback to the big-market owners for helping the small markets.”

Orza and other union officials maintain that, with revenues of $1.7 billion; with attendance up again and an expansion team headed for a record gate; with cities and individuals standing in line for expansion teams costing $95 million and with the small-market Orioles and Seattle Mariners selling for $173 million and $106 million, respectively, the industry is hardly in economic peril.

Union officials also claim that the owners have given only lip service to their desire for an improved relationship and partnership with the players; and that a true and total partner would have to be involved in all decisions, particularly in how revenue is defined and created. Since the December vote on reopening negotiations, they point out, the owners have not consulted the players on any decision before it was made.

Said Fehr: “Their definition of partnership consists of two words: salary cap .”

The last six bargaining negotiations have resulted in a work stoppage, but the long delay by the owners in reopening talks--”We’ve already wasted the chance to establish a new relationship,” an American League owner said--has left the union believing it has no alternative but to prepare for a preemptive strike in September. It would then still have the leverage of threatening the $300 million in postseason revenue the owners are scheduled to receive in the last year of the TV contract with CBS.

If the players don’t strike, they fear that the owners will declare an impasse after the current agreement expires on Dec. 31, and either stage a lockout next spring or unilaterally install their new system.

Sources close to the union, which will never forget collusion, say Fehr is considering submitting a grievance to the National Labor Relations Board.

“We’re concerned,” Orza said. “We have a lot of evidence, some of it coming from management statements to us and some from management statements to reporters, that they have abused the reopener; that they reopened purely to commence negotiations at the end of the season, when we would have no leverage, and yet they would have enough time (between the start of negotiations and Dec. 31) to say they have negotiated in good faith and (therefore) an impasse exists.

“I mean, if it takes them eight months or more to make a proposal, how do they expect us to study it, respond to it and negotiate it in only a couple months?”

Ravitch has called the strike threat a bluff and has said the owners are not scared. He believes there will be debate and disagreement among the owners on various aspects of the revenue-sharing issue, but once negotiations start with the union, he does not expect the disunity that has proved costly to the owners in previous talks with the players.

With national TV revenue expected to be reduced by 50% next year, Ravitch hammers at the problems of San Diego, Pittsburgh, Milwaukee and other small-market clubs, citing statistics to document the need for unity and change. Among the statistics:

--In 1989, 41% of baseball’s gross revenue went to salaries. That figure is now 58%.

--In 1989, a club with $40 million in revenue would have had to pay 60% of that total to equal the industry average for player payroll. It now has to pay 82%.

--Although, according to his claim, the majority of clubs lose money--they have never opened their books to the public--the average salary has risen to $1.1 million, and there are 198 players already guaranteed $520 million in 1994, when 50% of the compensation will be going to 10% of the players.

Baseball’s middle class is dying, in Ravitch’s view. More and more clubs are stocking their rosters with young, low-salaried players.

“I think the issue of so few players receiving so much of the compensation would be a major concern to the union,” he said.

Orza replied: “That’s a nice convergence of paternalism and rhetoric. We’ll decide what we’re concerned about, and we’re not concerned about that as much as they are. If the free market creates those situations, so be it.”

Baseball’s free market is also driven by arbitration and free agency. It has been speculated that the owners will seek major changes in--possibly elimination of--arbitration in exchange for allowing players to become free agents after three years instead of six, the thinking being that the market glut will also serve as a cost control.

First, however, they have to agree on a revenue-sharing formula among themselves: How much do they share, where does it come from and who gets it?

“The concept is not designed to guarantee profit for any team or to equalize revenue,” O’Malley said. “It’s designed to enhance chances of baseball surviving and prospering for the next five, 10, 20 years.

“Basically, if a club doesn’t have the revenue to fund its share of the (designated salary) pot, the other clubs would make up for it.

“(All clubs) share about one-third of the gross revenue already, but we don’t have the price controls.”

Revenue sharing provided each club with about $18 million in 1992. The shared money comes from national TV, a percentage that differs in each league from local cable rights, the visitors’ share of ticket sales, licensing income and indemnification from the superstations.

Ravitch has met with the financial officers of every club in an effort to develop uniform accounting terms and methods, providing for a more accurate gauge of revenue. But sources say that many clubs remain skeptical, believing their brethren continue to hide income.

The NBA designates 52% of revenue for salaries. Ravitch will have a hard time getting the baseball players’ union to accept less than the 58% that he claims is now going to salaries. Will that be too much for the owners to accept?

“There’s definitely going to be debate on the percentages, but the concept is right on,” O’Malley said.

Perhaps, but many of the small-market clubs are said to be clamoring for a higher percentage of shared revenue than is being discussed, and many of the prospering clubs--the Toronto Blue Jays, New York Yankees, Boston Red Sox, Colorado Rockies and Florida Marlins, among them--are said to be accepting the concept with serious reservations.

“Philosophically, I’m against revenue sharing between clubs,” Blue Jay President Paul Beeston said. “On the other hand, I don’t have another way that would ensure teams like Seattle, Pittsburgh, Milwaukee, San Diego and, even perhaps, Houston being competitive with the New Yorks, Chicagos and, for that matter, Toronto.”

Said Colorado owner Jerry McMorris: “I think everyone is agreed on the principle, but the question is how much and how? I think there’s a risk in simply creating a dole system in which we’re sending checks to teams that don’t get support from their fans and city (officials), and to owners who don’t do all they can do. People tend to lose incentive and pride when you make it easy for them to survive.”

O’Malley agreed. “Management is definitely a factor,” he said. “There must always be an incentive to work harder. In no way would I support revenue sharing with a team whose management isn’t being aggressive, and that has to be addressed some way in the formula.”

Ravitch said: “The other major sports have recognized that they could not survive without sharing revenue among themselves and with the players on a designated basis. The union has yet to acknowledge that this is a necessary part of the future of baseball. Until it does, there can’t be a meaningful partnership, and we’re going to have a continued state of tension (between owners and players) that will perpetuate the problem of marketing the game.”

State of tension? Ravitch must first deal with the big-market, small-market tension.

He hopes this can be resolved in the idyllic and stimulating environment of rural Wisconsin, but his itinerary will eventually take him to the bargaining table and the familiar hostility of a confrontation with the union.