Eleventh-Hour Baseball Negotiations Strike Out : Sports: Both sides doubt that salary-cap compromise will emerge in time to avert players’ walkout on Friday.
Major league baseball’s eighth work stoppage since 1972 is virtually certain to begin Friday as negotiators for the owners and the players ended Wednesday’s negotiating session having made no progress and with no plans to meet today.
The failure to come to any kind of agreement seriously threatens the final 52 days of the regular season, plus the playoffs and World Series. The players plan to go on strike Friday, meaning that eight of the 28 teams, including the Angels, may have played their final game of the season on Wednesday. The remaining 20 teams, including the Dodgers, will stop playing after today’s games.
A 2 1/2-hour meeting here Wednesday failed to produce any progress in the stalemated negotiations for a collective-bargaining agreement.
Richard Ravitch, the owners’ chief negotiator, made reference to players union counterpart Donald Fehr after Wednesday’s meeting when he said: “I continue to hope, as Don said in our meeting, that lightning will strike in the next day and a half and one of us will get an idea allowing us to bridge this gap, but I’m not optimistic.
“I regret that the union has not recognized the problems of the industry and responded to our proposal in any way, shape or form. I regret the union’s decision to strike, which not only hurts the owners and players themselves, but, more significantly, the fans.”
One such fan, dressed as a clown, stood at the corner of 49th Street and Lexington Avenue in mid-town Manhattan on Wednesday and distributed heart-shaped balloons to anyone who asked.
“I’m a baseball fan,” the man said, “and I’m handing these out as my way of telling people that neither the players nor owners have any heart.”
Most fans may not need that reminder.
At issue is the owners’ attempt to overhaul a pay system that has seen the average major league salary go from $146,500 a year in 1980 to $1.2 million today. The owners say this threatens the economic viability of many of the 28 clubs. They say 12 to 14 of the clubs will lose money this year, down from a previous estimate of 19 to 21 clubs.
The owners also claim that a payroll gap between clubs threatens the competitive balance of the leagues. For example, the San Diego Padres have a payroll of $15.5 million, while the Atlanta Braves are spending $52.1 million on player salaries.
The owners have responded with a proposal that would place a cap on salaries, eliminate salary arbitration as a method for settling contract differences and reduce the eligibility requirement for free agency from six years of major league service to four years. A player’s current ballclub would then have the right of first refusal for a player with five-to-six years of service.
The owners’ proposal does not specify an exact salary cap, but it calls for 50% of all revenue to be shared with the players. The players currently get 58%. The proposal also guarantees that the players get at least $1 billion a year for all player costs (salaries, pensions, health benefits, etc.) as long as club revenues don’t fall below the 1994 level.
If revenues grow at 7% per year, the average salary of a major league player would be $2.6 million in seven years, when the proposed contract would expire. Revenues have grown at an average rate of 14% over the past 15 years.
Ravitch has also persuaded teams in larger markets to share a portion of their revenue with teams in smaller markets. However, this would only happen if there were a salary cap.
Fehr says the union will never accept a cap and is prepared to fight for as long as it takes. He disputes the owners’ contention that they are in economic trouble, citing revenue of $1.8 billion a year and this year’s projected attendance of 70 million people (if a walkout is avoided).
Fehr says a salary cap would place an artificial restriction on salaries, transfer billions of dollars from the players to the owners and destroy free agency because many clubs would be too close to the cap to bid for high-priced players.
He also says it would damage the competitive balance of teams because many player-related decisions would be made by accountants rather than general managers.
“This is not a fight of the players’ making,” Fehr said. “It’s strictly an internal dispute among owners who couldn’t agree on how to sort out $1.8 billion in revenue without forcing the players to accept a salary cap by which the players would pay back the big-market clubs (for increasing the amount of revenue they share with the small markets). If there are revenue problems, the owners need to address the possibility of bad management and rewrite their own rules without asking the players for a pay-back.
“It’s a terrible shame the owners put the players in this position by waiting 18 months to make a proposal they knew we wouldn’t accept, but they have us right where they wanted us.”
The previous labor agreement expired in December. The owners had voted to reopen the negotiations a year earlier but did not make a proposal for 18 months.
The union cites that delay, along with the owners’ recent refusal to make a $7.8-million pension plan contribution from All-Star Game receipts, as evidence of the owners’ intention to force a strike. The owners said they weren’t required to make the contribution because there was no bargaining agreement in place.
The union also claims that a strike is its only leverage against the possibility of the owners declaring an impasse in October and unilaterally implementing a salary cap.
The players will not be paid during a strike, collectively losing about $5 million a day in salaries. However, they have a $175-million-to-$200-million strike fund from licensing revenues and will distribute the first checks on Sept. 15 and Sept. 29, the usual paydays for the players.
The owners have $140 million in TV revenue at stake during the postseason and anticipate some of their biggest attendance dates during the final days of the season, when teams are trying to make the playoffs.
They have no strike insurance, as they did during the 50-day strike of 1981 (which ended when the insurance ran out), but they have a $260-million line of credit from a bank consortium, providing “short-term relief for any club with a cash-flow problem,” Ravitch said.
It is generally agreed that the players won all seven of the previous work stoppages--four strikes and three lockouts--by outlasting the often-splintered owners.
Baseball has been without a commissioner for 23 months because the owners do not want a commissioner interfering in labor negotiations as they believe Fay Vincent did in ending the lockout of 1990.
Despite the belief that many of the large-market clubs have no interest in a prolonged work stoppage and could live with the status quo, Ravitch says it would be a mistake for the union to underestimate the owners’ resolve.
In addition, because of a recent rule change by the owners, it will require 21 of the 28 clubs--rather than a simple majority--to approve an agreement in the event of a work stoppage.
That means eight of the hard-line small-market teams could hold up any settlement that does not include a salary cap. Some owners have said that even the 1995 season could be in jeopardy.
“I have never seen so much (economic) distress and despair among the clubs,” said interim commissioner Bud Selig, owner of the Milwaukee Brewers. “For too many years we put off addressing the problems until tomorrow, figuring they’d disappear, just go away. We now know otherwise. We now know tomorrow is here and something has to be done. The future of the game is at stake.”