Players’ Union Rejects Owners’ Latest Proposal : Baseball: Negotiations continue as deadline to impose salary cap looms.

Baseball players “fundamentally” rejected the owners’ latest contract offer Tuesday and didn’t come back with a counterproposal, Colorado Rockies chairman Jerry McMorris said.

Negotiators resumed talks at 11 a.m. EST, about 10 hours after the sides recessed. They met for two hours before owners left the room and went back to their own caucus.

“They’re meeting with the mediator now, deciding where we go next,” McMorris said.

It wasn’t until 4:15 p.m. that owners rejoined the meeting.

“It’s fair to say it’s pivotal here,” said Gene Orza, associate general counsel for the union.

Even before the meeting, union officials held out little hope for a deal before Thursday, when owners are scheduled to meet in Chicago, and union head Donald Fehr said the lateness of Monday’s talks was tied to Thursday’s meeting. Management negotiator John Harrington has said that if there’s no deal by then, owners will declare an impasse and impose a cap.

Teams, prepared to start the 1995 season with replacement players if the strike continues, want a new economic system in place before Saturday, the deadline for clubs to offer salary arbitration to their former players who became free agents.

Owners originally planned to meet Dec. 5, but agreed to push back their meeting and the arbitration deadline by 10 days.

“We’re literally out of time,” McMorris said before Monday night’s talks began. “With the holidays staring at us, it would be very difficult to move that date again.”

If owners do impose a cap, they would eliminate salary arbitration and many of the union’s gains of the past 25 years, and make players with four to six years in the majors restricted free agents.

The union would challenge an imposed cap before the National Labor Relations Board, and both sides have been determining their strategy under the assumption it will be reviewed by judges and juries.

Players would make it harder for owners to defend an impasse if they make another counterproposal. The union’s last offer, made Saturday, called for a flat 5.02% payroll tax that would apply to all clubs.

Management officials admitted their offer of Sunday would roll back the percentage of revenue going to players, which clubs say was 58% in 1994.

“It’s designed to put some drag” on salaries, McMorris said. “There’s no deception to that. It’s to get the level down to a 50-50 share.”

The proposal was so complex, according to one source, that the spread sheet explaining it was more than 100 columns wide.

“This makes my head hurt,” Fielder said during Sunday night’s bargaining session.

A chart given the union by Philadelphia Phillies co-general partner David Montgomery showed the new plan could have a 55% marginal rate, which means a $1 million payroll increase would raise a team’s tax by $550,000.

“At first blush, it appears their new proposal contains virtually all the elements of the salary cap,” Fehr said Sunday night.

The tax rate would increase as long as the percentage of money going to players was more than 50%. There would be three transition years.

As part of an example Montgomery gave the union, if players got 62% of the money this year, the target for 1996 would be 59%, so the tax rate would increase to 7.64%. Because the tax could keep increasing if players keep getting more than 50% of revenue, the union thinks the plan would serve as a cap.

Also, union officials said the plan would reward high revenue clubs for remaining just under the 112% threshold. That’s because all clubs under the threshold would receive tax money, and the tax money would be given to a club in proportion to its revenue.

Using 1994 figures, 19 clubs would pay a tax and nine would receive money. The receiving clubs would include the New York Mets, who were projected to have the sixth-highest revenue at $81.2 million but the eighth-lowest payroll, $34.4 million counting benefits and employer taxes.