No House Party for Selig

In a face-to-face confrontation with Commissioner Bud Selig, leaders of the House Judiciary Committee said Thursday that major league baseball no longer deserves its 79-year-old antitrust exemption in view of the determination of baseball owners to eliminate two teams, rather than allowing them to move elsewhere.

Contraction is needed, Selig replied, because baseball’s “financial losses and overall economic stability are even bleaker now” than a year ago, when a blue-ribbon panel concluded that the sport’s economic system was broken.

Yet, even as Selig was testifying about the sport’s beleaguered financial state, Jason Giambi was negotiating with several teams, including the Yankees, who were reportedly offering a seven-year contract in the $120 million range.

Giving Congress more details about baseball’s finances than ever before, Selig testified during often contentious proceedings that operating losses over the last seven years have grown to nearly $1.4 billion. “As revenues continue to grow, so do losses,” Selig said. He placed operating losses for baseball’s 30 teams at $232 million this year--largely caused, he said, by free agency and arbitration awards. The losses were topped by the Toronto Blue Jays at $52.9 million; the Dodgers were next at $45.3 million, according to his figures.

Minnesota Gov. Jesse Ventura, who was seated next to Selig, balked at the accuracy of such data. “It’s asinine,” he said. “[Owners] did not get the wealth they have by being stupid.”

Rather, Ventura said, baseball’s ills were created by team owners who can’t control their own spending.

“Mr. [Barry] Bonds is going to get over $100 million, no doubt,” he said, referring to the free-agent National League most valuable player. “Mr. Jason Giambi, they’ve said he’ll go well over $100 million. The problem out there is they’re paying their employees too much money.”

Rep. John Conyers Jr. (R-Mich.), who introduced the legislation to repeal baseball’s antitrust exemption, also was skeptical.

Noting that Selig’s figures did not include details on salaries and fees received by the owners and their families, the impact of stadium acquisition loans, and funds moved between teams and television networks operated by the same owner, Conyers said, “In essence, what [owners] have told us is, ‘We lose money, but we can’t trust you with the details.”’

Some congressmen appeared dumbfounded--and others were angered--by vague answers by Selig.

Asked by Rep. Robert Wexler (D-Fla.) whether the Florida Marlins would survive for several more years, Selig responded, “We’re there now and let’s hope it all works out.”

There was an awkward pause before Rep. F. James Sensenbrenner (R-Wis.), the committee chairman, asked Wexler is he was left speechless by Selig’s reply.

“If fans are going to get those kinds of nebulous responses from the commissioner of baseball, there’s almost a compelling reason from the whole lot of us to support the legislation so we can get some direct answers,” Wexler said.

Maxine Waters (D-Calif.) clashed with Selig over his refusal to comply with a request by the players union to lift a confidentiality agreement covering some financial information.

“You have all the statements, all the numbers,” Selig said.

“Mr. Selig, let me remind you, you are under oath,” Waters replied sternly.

On a lighter note, Rep. Anthony Weiner (D-New York) poked fun at the Milwaukee Brewers, which are owned by the commissioner’s family, telling Selig, “I’ve been particularly impressed with your management of the Brewers, because it’s always a good weekend when the Brewers come to town.”

Sensenbrenner said it was hard to understand “why so many teams are in financial peril with the protection of special legal status when professional football, basketball and hockey teams are not.”

“For years, baseball has told Congress and the public that it can heal itself. It has not done so,” Sensenbrenner added. “So maybe the Supreme Court’s help in 1922 has outlived its usefulness, and the market should be allowed to work in baseball like it has in other major sports.”

Conyers, the panel’s ranking Democrat, said baseball itself would shoulder the blame if Congress repeals the exemption, allowing struggling teams to relocate.

“Baseball lost the right to its exemption by tolerating eight work stoppages in the last 30 years, more than every other professional sport combined,” Conyers told Selig. “And baseball lost the right to its exemption with their unacceptable record of minority hiring--no minority owners and only a single minority general manager.”

Legislation to repeal or limit the sport’s antitrust exemption was introduced in the House and the Senate after the vote by major league owners last month to eliminate two teams before next season.

While no teams were named, the Minnesota Twins and the Montreal Expos are considered the likely candidates, and Minnesota’s congressional delegation pushed for Thursday’s hearing.

Congress has debated the antitrust exemption in past years but always has stopped short of repealing it. Members have preferred to threaten baseball owners in hopes that they would remedy their ills themselves.

Ventura told the hearing that “the simple, logical and common-sense fact is that major league baseball is a business that should be governed by the same laws as every other business.”

Noting that Selig has said that the Twins cannot be competitive without a new stadium and therefore might be eliminated, Ventura said, “Without more fundamental economic reforms, many teams cannot be competitive.”

Defending contraction, Selig said, “It has become clear that no single measure will solve the industry’s overall problems.... There are clubs that generate so little in local revenue that they have no chance of achieving long-term competitive and financial stability.”

He declared that “certain clubs have no prospect of long-term competitiveness on the field or financial viability off the field. That is why baseball has made the decision to contract by two teams.”

Noting criticism that baseball should help relocate troubled franchises, rather than eliminate them, Selig told the committee:

“We have looked at the possibility of relocation and have not ruled it out in the near future.... We may well find that relocation can become one part of our overall solution in the near future, but it is not the answer to any problems we are facing this year.”

He insisted that repeal of the antitrust exemption is not the answer and said if pending legislation were passed, “the franchise stability I have referred to, and that baseball has worked so long and hard to achieve, could be severely undermined.”

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Money In

Baseball teams’ gate receipts and local broadcast revenue in 2001, as obtained from a baseball management report. All numbers in thousands.

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Team Gate Broadcast Angels $30,208 $10,927 Arizona 46,509 14,174 Atlanta 62,141 19,988 Baltimore 53,216 20,994 Boston 89,743 33,353 Chi. Cubs 51,189 23,559 Chi. White Sox 30,898 30,092 Cincinnati 32,102 7,861 Cleveland 69,470 21,076 Colorado 54,015 18,200 Detroit 42,299 19,073 Florida 16,756 15,353 Houston 49,161 13,722 Kansas City 19,520 6,505 Dodgers 50,764 27,342 Milwaukee 46,021 5,918 Minnesota 17,605 7,273 Montreal 6,405 536 NY Mets 73,971 46,251 NY Yankees 98,000 56,750 Oakland 24,992 9,458 Philadelphia 30,435 18,940 Pittsburgh 48,610 9,097 St. Louis 67,084 11,905 San Diego 34,381 12,436 San Francsico 67,173 17,197 Seattle 76,570 37,860 Tampa Bay 18,193 15,511 Texas 50,664 25,284 Toronto 25,363 14,460 Total 1,383,458 571,095

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