Owners May Go Back to Square One

Peace parley or war council? It isn’t certain but mounting evidence suggests that enough major league owners, meeting today to vote on the proposed labor agreement, will risk a new war with the players’ union by rejecting the agreement that would end three years of internal friction.

The proposed agreement, negotiated to near completion in early August, then completed during the World Series in Atlanta, would seemingly provide the framework for a partnership between owners and players, assuring labor peace through 2001, if the union picked up a sixth-year option.

The alternative, just as the game has begun to regain public support after the disastrous players’ strike of 1994-95, isn’t pretty.

If the agreement is rejected--and it appears that anywhere from the required eight to as many as 14 teams will vote against it--there will be no interleague play in 1997, no revenue sharing for the small-market teams, no luxury tax aimed at controlling big-market spending, and no major marketing and licensing deals to help take baseball back to the levels of football and basketball in finances and popularity.

There would be, however, the possibility of a death-knell lockout or strike next spring if the owners tried to return to court and unilaterally implemented their own work rules.

And it is almost certain management negotiator Randy Levine will resign immediately.

“Some people predict we could simply revert to the status quo, but I think that’s unduly optimistic,” a National League executive said. “I think there would be serious acrimony again [between the owners and players].”

Said one management source, “If the owners repudiate their own negotiator on this, there will be an eruption of the type you can’t believe. Why would [union leader] Don Fehr ever negotiate with them again? Why would he ever trust them again?”

With all of that, a group of dissident owners led by Jerry Reinsdorf of the Chicago White Sox has been lobbying to reject the agreement because it:

--Restores service time to the players for the 75 regular-season days they were on strike in 1994-95.

--Does not include a stringent enough tax or cap on payrolls to control salary growth and reduce the disparity between big and small markets.

--Gives the union two tax-free years at the end.

Referring to the absence of a luxury tax in 2000 and 2001, a dissident president of a National League team said:

“All of this was about creating a new system that would help control salary growth, but we come out of this with nothing. We come out of it with the same system we’ve been trying to change. There’s nothing for us to build on in the next agreement.”

Sources said Tuesday there is a possibility that the owners may take two actions today, rejecting the agreement and authorizing a delegation to go back to the union with the same proposal except for elimination of the second, tax-free year in 2001. That would put the onus on the players and certainly would be rejected by them.

Said a union lawyer, “We have an agreement. We negotiated it in good faith with all of the elements interdependent. For the owners to come back to us at this point and say they want to eliminate one of the key elements would be nothing more than a publicity stunt.”

The agreement requires ratification by 21 of the clubs, but Atlanta Brave President Stan Kasten said Tuesday that it definitely is going to be defeated.

“It’s a horrible dilemma for teams,” Kasten said. “You have two bad choices and you have to pick one. If you accept this deal, it’s likely to yield annual losses of $100 million, maybe $200 million. If you reject it, then for some period of time you are in the status quo, the current malaise. Neither decision moves the game along or fixes its problems.”

A Times survey puts the count some where in this neighborhood: 15 in favor of ratification, five against and eight undecided.

The five adamantly opposing the deal have been there from the start. Besides Reinsdorf, they include David Glass of the Kansas City Royals, H. Wayne Huizenga of the Florida Marlins, Claude Brochu of the Montreal Expos and Andy MacPhail of the Chicago Cubs.

The undecided include the Angels, Minnesota Twins, Seattle Mariners, Houston Astros, Boston Red Sox, Cleveland Indians, Detroit Tigers, and acting Commissioner Bud Selig’s Milwaukee Brewers.

From that list, the Red Sox, Mariners and Astros are leaning toward a no vote, giving Reinsdorf the eight he needs to reject the agreement, but it could become a landslide that way, with even Selig instructing his daughter, club counsel Wendy Selig-Prieb to vote against it, drawing several more clubs with him.

Selig has never put an issue to vote without knowing the outcome and trying to influence it, but on the threshold of peace he has suddenly wavered, saying this is too important a decision for arm twisting, that the clubs have to make it on their own.

It had been thought that if Selig were to support the agreement, he could influence enough of the undecided clubs to secure approval, but that no longer appears to be the case.

Said a management source, “If there are eight clubs waiting to find out how Bud Selig votes before making their decision, that tells you just how sick this industry is.”

There has been speculation--denied by Selig--that he is reluctant to tackle Reinsdorf on the labor issue because he wants to be hired as full-time commissioner and does not want Reinsdorf to generate opposition.

It is similarly indicative of Reinsdorf’s strength that Astro owner Drayton McLane, a key vote, has remained undecided on the labor question.

McLane will need Reinsdorf, as chairman of the ownership committee, to support his attempt to sell the team to buyers who would move it to Virginia if Houston voters on Tuesday rejected an initiative approving financing for a Houston stadium.

Reinsdorf refused to add to what has been his standing comment.

“I am not against a deal,” he said. “I am just against this deal.”

Selig, who had said last week that “some way, somehow” he thought the agreement would be approved, could not be reached.

A source close to Selig said he will recommend today that Tampa Bay and Arizona, the 1998 expansion teams, be permitted to vote, but that does not change the equation: eight of the 30 can still kill the deal.

Said a management source, “The owners have been losing labor deals for 25 years and there is no way to reverse that in one swoop. There is no perfect deal.”

The players, however, have agreed to several items in the proposed deal that can be considered concessions. Among them:

--A three-year luxury tax that would have cost the four highest-salaried 1996 teams between $5.8 million and $1.3 million for exceeding the threshold.

--A revenue-sharing formula that the union insists is a cap or tax by itself, since it takes money from the high-revenue clubs that fuel the market. Six small-market teams--Minnesota, Montreal, Milwaukee, Detroit, Kansas City and Pittsburgh--would each receive more than $5 million in 1997.

--A two-year, 2.5% tax on their own salaries or the equivalent guarantee of $40 million to fund a revenue-sharing shortfall account and a joint growth fund.

--A switch to three-man panels to decide salary arbitration cases.

--The withdrawal basically of all litigation filed in response to management acts that the courts or National Labor Relations Board judged illegal during the strike.

Both Selig and the owners’ labor policy committee, including Reinsdorf, were kept abreast of the negotiations from the start--one reason the current opposition is difficult to fathom unless, as some believe, it continues to stem from Reinsdorf’s dislike of Fehr and the belief of some owners the union can still be broken.

“Randy Levine is the most talented representative the owners have had in a long time and I’d be surprised if I didn’t support his recommendation,” Dodger owner Peter O’Malley said. “I look forward to the presentation and discussion and hearing about the alternatives.”

Alternatives? The consequences of rejecting the deal seem dire:

--Levine would certainly resign, following Richard Ravitch, Chuck O’Connor and a cast of thousands who have tried to satisfy the owners in that role.

Greg Murphy, the president and CEO of newly created Major League Baseball Enterprises, the industry’s marketing and TV wing, might also resign. Sources say Selig promised him a labor deal with which to lure new sponsors and endorsement contracts. Murphy, sources said, has already arranged for $500 million in such deals, pending an agreement.

--The industry would continue to operate under expired work rules, but everything in the proposed agreement would collapse, since there would be no time to renegotiate with the off-season’s free agency, roster and arbitration rules kicking in.

--Under the injunction that ended the strike and reinstated the expired work rules, owners would have to return to court for permission to declare an impasse and implement their own work rules. But the rules they would be implementing are those of the agreement now at issue.

Courts generally have taken the position that only the last, best offer can be implemented, and the owners’ last, best offer has been accepted by the players, meaning they would be laughed off the docket or told to return when new negotiations had produced a genuine impasse--months or years from now.

They might also be told, a labor lawyer said, that their 21-vote rule is unconscionable minority rule and an impossible impediment to a deal.

Will it be?

The nation voted Tuesday.

Baseball’s house of lords is scheduled to vote today.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Whither Baseball?

Baseball owners meet today in Chicago to vote on a proposed labor agreement that could shape the future of the game, for better or worse.

WHAT THE DEAL WOULD DO

-- Establish working agreement with players’ union through year 2000.

-- Set payroll thresholds that call for a luxury tax on teams exceeding limit. The limits would range from $51 million in 1997 to $58.9 million in 1999. There is no tax for 2000, or for 2001, when the players have the option of extending the agreement.

-- Establish revenue sharing between teams.

STICKING POINTS

-- Restores service time to players for 75 days missed during the strike of 1994-95.

-- Does not include a stringent enough tax on payrolls to control salary growth and reduce disparity between big- and small-market teams.

-- Gives players two tax-free years at end of contract, assuming union picks up the option for 2001.

HOW THE VOTE WORKS

-- 21 of 28 (or 75%) teams must approve agreement for it to pass.

-- Also, a separate vote might be taken on whether to include the two expansion franchises (Arizona and Tampa Bay) in the vote.

IF PROPOSAL IS REJECTED

-- No interleague play in 1997.

-- No revenue sharing or payroll cap to control spending.

-- No new marketing deals to generate revenue for teams.

-- No baseball? Rejection of deal would open possibility of a lockout or strike next spring.