Owners, Union Strike Out in Settlement Try : Baseball: Management scheduled to implement salary cap today. Next stop for two sides appears to be courts.

Baseball’s doomsday scenario is about to become reality. The final attempt to reach a negotiated settlement in the four-month-old bargaining dispute before the owners declare an impasse ended in failure Wednesday.

The owners are scheduled to meet in Chicago today and implement a new economic system that includes a salary cap.

Litigation is about to replace negotiation. The National Labor Relations Board has already been heard from. General counsel Fred Feinstein notified the two sides Wednesday that the NLRB will issue two complaints against the owners--involving failure to negotiate in good faith and discrimination against union members--for failing to make an Aug. 1 payment of $7.8 million to the union’s pension fund from All-Star game receipts.

Union lawyer Doyle Pryor, referring to the likelihood that the players will return to the NLRB to charge that the owners also failed to bargain in good faith during the sporadic talks of the last four months, called the pension complaint significant.

“If we have to file another charge, it will already have been determined that they have not bargained in good faith,” he said.

“If the theory is that they never wanted to reach an agreement, then this (withholding of the pension payment) was part of the attempt to provoke a strike.”

The owners, who say they withheld payment because the pension agreement had expired last December, will have a chance to respond to the complaint before it goes to a hearing. Management attorney Chuck O’Connor said the NLRB action would have no impact on a decision to implement the salary cap or the possibility of future litigation by the union.

“Any pension settlement would be part of a new collective bargaining agreement,” O’Connor said.

A new agreement? Union leader Donald Fehr said he hoped he was wrong but that the demeanor of the owners’ negotiating committee left the impression that this would prove to be more than only a “temporary interruption” in the negotiations.

He said he expected the owners to implement the salary cap, “but if I was their lawyer I’d suggest they think about it.”

John Harrington, the owners’ chief negotiator and chief executive officer of the Boston Red Sox, said he would recommend implementation of the new economic system. Twenty-one votes are needed. Baltimore Oriole owner Peter Angelos said Wednesday he will vote against implementation, but sources said only the Toronto Blue Jays and Cincinnati Reds might join him.

“If we implement, it will definitely be a setback to the bargaining process, but the calendar is where it is,” said Atlanta Brave President Stan Kasten, a member of the negotiating committee. “We have to get on with our business and prepare for 1995.”

The owners faced two key dates. Saturday is the deadline for a club to offer its free agents arbitration, which will be eliminated under the owners’ plan. The deadline for tendering 1995 contracts is Dec. 20.

In addition to seeking an injunction through the NLRB and possible filings in federal court, the union is considering an immediate signing freeze. Without a settlement, the strike that began on Aug. 12 as economic leverage against implementation of the salary cap will resume next spring, when owners attempt to open the camps with replacement players.

Special mediator William J. Usery, whose tenacity might have been the only reason the sides were still talking Wednesday, said absence of an agreement did not represent a failure on anyone’s part. Usery had recently said implementation of a salary cap would be an impediment to the bargaining process, but on Wednesday he called it a “bump in the road” and said he was hopeful the sides would consider resuming talks next week, probably wishful thinking.

“I still have a dispute to mediate,” he said. “We just ran out of time.”

Fehr complimented Usery and said: “It’s apparent, at least for now, that there’s not an agreement to be found, and that’s because everything the players were willing to do did not add up to a cap or functional equivalent of a cap. Unless one defines good-faith bargaining by giving the owners everything they wanted, the players made substantial moves. Anyone who thinks implementation will change what the players will or will not accept is simply wrong.”

Said Harrington, acknowledging that the industry will be damaged by the failure to attain a settlement: “We’re disappointed, but at peace with ourselves. We felt we made every effort to reach an agreement, but we remained deadlocked over the central issue of cost control and the relationship between compensation and revenue.”

About 58% of 1994 revenue went to player compensation. The owners hope to reduce it to 50% through a system the union insists will wipe out 25 years of the bargaining progress, destroy free agency and transfer millions of dollars from players to owners.

The salary cap proposal has been on the table since June 14 and modified only to the extent that a $1 billion compensation guarantee for the players has been removed because of the estimated $600 million that the clubs have lost during the strike.

The payroll cap will be set at about $34.8 million and linked to revenue sharing, which will transfer about $58 million to 11 smaller-revenue teams when fully implemented in four years. Arbitration will be replaced by salary minimums in each of a player’s first four years and right-of-first-refusal free agency after a player’s fourth and fifth years.

About 80 players in those categories will become free agents if the system is implemented today, but union officials believe overall movement will come to a halt because few clubs will make multiyear commitments under the cap. The flooded market will also contribute to the drag on salaries.

The recent, partnership-based union proposal would have transferred $58 million to the smaller revenue teams next year, rather than in four years. The union went back to the owners with different ways of doing it Wednesday, but Fehr said: “We had always been led to believe that the one thing the owners wanted to accomplish was to help the small-market teams, but everything we suggested was rejected. They countered with plans that would have helped the larger -revenue teams. This was all about the cap.”

Both sides had come out of a session at 2:15 a.m. Wednesday with a degree of optimism, but it led nowhere after the talks resumed in early afternoon.

Brave pitcher Tom Glavine said the scars would be hard to heal “but as a player, what price do you put on your freedom? People say we’re greedy, but if we’re greedy we would have taken their best deal and gone back to collecting pay checks.”