Labor Talks May Be a Shock to Players’ System

The decision by the players’ association this week to extend the current bargaining agreement through 2001, assuring a sixth year of labor peace, was about as anticlimactic as they come. After all, the average major league salary has increased from

$1.1 million to $1.9 million during the agreement. San Diego Padre President Larry Lucchino called the union decision a no-brainer, saying, “The players have an extraordinarily advantageous system in place, if they are only concerned with salaries.”

The agreement now expires Oct. 31, 2001, but we will know before then--assuming negotiations aren’t delayed until the 11th hour--just how determined ownership is to change the system and possibly risk what would be the ninth work stoppage since 1972.

“We’re not supposed to talk in terms of war and peace, so anything I say is my personal point of view, but there have to be changes and improvements in a system way out of whack,” Lucchino said. “There’s a gross imbalance in competition and revenue, and the escalation in salaries has led to spiraling prices in everything from hot dogs to tickets.”

The rhetoric, of course, is familiar and could be plugged into any time and place in a contentious labor history.

The last dispute was about the worst. The 1994 player strike--the result of union fears that owners would try to unilaterally and illegally implement new work rules, which was the case--ultimately led to the cancellation of the World Series that year and the loss of games in 1995.

Will players and owners ever learn that there should be a peaceful way to divide the industry’s billions, or is another disruption likely as owners press for a more meaningful deterrent to salary growth?

Given the history, the temptation is to predict another Armageddon.

However, the ongoing recovery from the prolonged dispute of 1994-95 has been so costly there is reason to believe that neither side would again jeopardize the future.

One labor-oriented management official cited four reasons for optimism:

1. Experience has taught both sides the value of starting negotiations early, probably at some point during the coming off-season.

2. The recent report by management’s blue-ribbon economic committee has provided a road map to the relevant issues--from ownership’s standpoint.

3. The sides now have some experience with those issues, primarily the luxury tax on payrolls and increased revenue sharing among the clubs.

4. The personality conflict between union leader Don Fehr and then-owners’ counsel Dick Ravitch, which damaged communication during the early months of the last talks, has yielded to improved relations between the union and the two key management representatives, Paul Beeston, chief operating officer, and Rob Manfred, the executive vice president for labor and human resources.

Said the official, “We were in La La Land the last time because we didn’t really know how a luxury tax or revenue sharing would work. We’ve had some experience with it all now and [negotiations] should be much easier. It’s just a question of where to put certain thresholds. It’s just a matter of turning the gas up on the flame.”

He referred to a higher luxury tax and increased revenue sharing among the clubs. Neither may be as easy to achieve as he suggested. Not only will the union regard a high payroll tax--the panel recommended 50% on payroll over $84 million--as tantamount to a salary cap, but the top-revenue clubs may oppose a restrictive tax. Those clubs may also oppose any increase in revenue sharing without assurance that the recipients will spend the money on players rather than the electric bill. The panel recommended that clubs be required to have payrolls of at least $40 million to receive money from the central fund.

For Beeston and Manfred, there are issues with the union and complex internal issues with big and small clubs that have their own agendas.

And although there is room for compromise, there is also the historic element of mistrust.

The owners, for example, look at the standings and see imbalance. The union looks at the standings and sees improved balance and parity, a September scenario in which four of the six division races may go down to the wire, six teams are vying for the American League’s wild-card playoff berth and there is no one apparent powerhouse, as evidenced by the fact that no team may finish with a .600 percentage for the first time since 1982.

The union would also argue that:

* The impact of improved revenue sharing in the current agreement, only fully implemented in the last two years, can be measured by the improved play of several teams, including the division-leading Chicago White Sox, with only the 25th-highest payroll, and the small-market Oakland A’s;

* There is the promise of increased revenue from the Internet and a new television contract;

* Teams in San Diego, Cincinnati, Milwaukee and Pittsburgh will soon benefit from new ballparks;

* Attendance continues to grow (thanks largely this year to the new park in San Francisco) despite the dire predictions of four years ago and the fact that 16 teams are down in attendance this year.

All of that may be valid, but it is still hard to dispute management concerns regarding the revenue and competitive disparities.

The union’s decision to extend the labor agreement only delays the question of how those concerns will be addressed and the more ominous question of whether baseball is doomed to repeat history.