Labor Daze

It was strictly an exhibition, and topics ranged from the weighty to the whimsical.

But a recent symposium at a New York law school offered a rare glimpse into the upcoming fall classic: labor negotiations between major league baseball and the players’ union when the current collective bargaining agreement expires Oct. 31.

Between such light fare as the legal rights of mascots and property rights of balls hit into the stands, the symposium at Yeshiva University addressed the pitches, swings and strategies expected in upcoming negotiations.

Because both sides rarely speak publicly about the key issues, it was a coup for Yeshiva to assemble a panel of heavy hitters: Thomas Ostertag, general counsel for the commissioner’s office; Gene Orza, associate general counsel of the union; former commissioner Fay Vincent, former deputy commissioner Steve Greenberg and Montreal Expo executive David Samson.

No transcripts were taken as a condition of the panelists’ participation, but the overriding opinion of audience members who grilled the baseball big shots like so many Dodger Dogs was that the owners are in disarray and will have difficulty making headway at the bargaining table.

“As baseball fans, we are in trouble,” said Gianna McCarthy, a Manhattan equities trader who attended.

“There was a lot of grousing and eye-rolling on the panel. The owners don’t have consensus, but now they must sit down and bargain with the players’ association? You won’t get a good result.”

The owners want players to make concessions to hold salaries in check and distribute the spoils of their multibillion-dollar industry more evenly among large-revenue and small-revenue teams. But owners have yet to agree on plans for revenue-sharing and a payroll luxury tax.

And the players, who are happy enough with the current basic agreement to have extended it through this season, won’t budge unless owners open their books and prove the contention that teams are losing money.

Negotiations are expected to be acrimonious. The two sides have hammered out eight contracts since 1972, but not before a work stoppage each time, most recently a 232-day strike in 1994 that wiped out the World Series.

Because of the disagreements among owners, Commissioner Bud Selig has threatened any owner or league official who discusses labor issues with a $1-million fine, which Ostertag and Samson made uneasy jokes about while tiptoeing around questions at the symposium.

“I was careful, if you know what I mean,” said Ostertag, who will leave negotiations to Selig and fellow executives Paul Beeston and Robert Manfred.

Realizing Ostertag was fighting with one hand tied behind his back, Orza refrained from throwing any haymakers.

“If the players’ association passed a law saying there was no talking, they would rightfully throw us out of town,” he said. “But it would have been unfair if I responded by putting [Ostertag] to the test about something he couldn’t comment about because of some stupid edict.”

Sporting of Orza. But baseball executives will not receive the same deference beginning Nov. 1.

Besides encouraging give and take between movers and shakers, the Yeshiva symposium and others like it prompt discussion of critical issues among sports lawyers, economists and anyone else interested in the upcoming negotiations.

One of the most intriguing issues is contraction--the term Selig uses to describe eliminating two small-revenue teams. The notion is dismissed by many as a negotiating ploy and it is widely assumed the players would resist any effort to reduce the number of major league jobs.

There is another view. Top-level players would gain by subtracting two money-losing teams and 50 of the current 750 roster spots. It’s the weakest link thing. The players losing their jobs would be among the lowest-paid, not those with the loudest voices in the union. Money from merchandising and the national television contract would be split fewer ways. And much of the extra cash would end up in the players’ pockets.

Orza admits as much.

“Nothing is so clear and dry as saying it is all good or all bad,” he said. “In the case of contraction, it is not a bluff. I think it is a serious issue as far as management is concerned.”

However, he believes reducing the number of teams cuts against the popular perception that baseball is a healthy, prosperous industry.

“The psychological impact of it makes [contraction] a bad idea,” Orza said. “Management does not fully appreciate what it says about the game.”

A better solution, experts say, would be to relocate the struggling franchises that typically come up in contraction discussions--the Montreal Expos, Florida Marlins, Minnesota Twins and Oakland Athletics.

No team has moved since 1972, and baseball can enforce rules that prohibit relocation and protect the territorial rights of existing franchises because of its antitrust exemption. But contracting without allowing a team to move would invite legal action.

“The players’ association would make a claim to the National Labor Relations Board,” said Andrew Zimbalist, author of “Baseball and Billions.” “If that failed, they would pursue an antitrust suit saying there are other areas that can viably host a team and the demand is not allowed to be filled.

“Then the attorney generals of the places that could support a team--Northern Virginia, Las Vegas, San Jose--would file suit in federal court. And Congress would do something.”

Such as revoke the antitrust exemption baseball has enjoyed since the 1920s.

“An attempt to contract baseball might lead to states and municipalities that pay for stadiums to claim they own the team through eminent domain,” said Paul Finkelman, a Tulsa University professor and expert on baseball law. “This raises an interesting question: Because of baseball’s antitrust exemption, is a team a public utility that cannot be taken away from the town?”

All of which leads to a more pragmatic question for Selig: Would he dare risk such a catastrophic chain of events, not to mention the public relations nightmare?

“The economic situation is so significant, and I would call it pervasive, that I wouldn’t take contraction off the table,” Selig said. “It is one of the options out there we are considering.”

Although reducing the number of teams might cause salaries to rise, the players remain suspicious of the owners’ intentions. Selig, after all, used contraction as a threat in a letter to the Florida Legislature requesting that state funds be used for a new stadium for the Marlins.

“The players are not likely to respond well to such an effort being used as a threat or a club,” said Donald Fehr, executive director the union.

Contraction is perhaps most useful to Selig as an incentive for owners to agree to greater revenue-sharing.

The commissioner has had difficulty convincing large-revenue owners such as George Steinbrenner of the New York Yankees and Ted Turner of the Atlanta Braves to hand over a portion of their profits to small-revenue teams simply to foster competitive balance.

The owners would be more inclined to cooperate if the number of teams needing handouts were reduced.

“The big fight is not with the union but with other owners,” said Paul Anderson, assistant director of the Marquette Law School national sports law program. “Selig is [threatening contraction] as a precursor, a setup for the revenue-sharing issue.”

Greater accountability for the money given by the haves to the have-nots will be necessary. Last year, Twin owner Carl Pohlad paid bonuses to administrative employees with funds the richer owners gave him. Establishing a minimum payroll to ensure the money is spent on improving the team is a suggestion made by some owners the union probably would go along with.

Revenue-sharing was implemented as part of the resolution to the players’ strike of 1994. This season, the six teams with the highest payrolls will pay $165 million to the six with the lowest payrolls.

Is it enough? Not if the success of the wealthiest team is an accurate gauge: The Yankees have won four of the last five World Series.

However, the on-field success of the small-revenue Twins and Philadelphia Phillies this season doesn’t help Selig convince large-revenue teams to spread their wealth.

David G. Feher, a New York attorney specializing in antitrust and sports law who has represented the NFL players’ union, believes competitive balance currently exists in baseball.

“Selig said it doesn’t matter that the Twins and Phillies are competing, that last year it was the White Sox and Athletics, that there will be exceptions every year,” Feher said. “But a couple of exceptions every year is the nature of competitive balance. The exceptions prove the rule.”

Other suggestions to address the revenue disparity have gone nowhere. The idea of a “competitive-balance draft” that would redistribute players from large-revenue to small-revenue teams is expected to be shot down quickly in negotiations.

“It would be very odd, I think, if we ended up with a situation in which a low-revenue team did well with relatively limited assets, then was penalized by losing a player to a high-revenue team that did poorly,” Fehr said.

Even less likely than contraction or a competitive-balance draft is a salary cap. NBA owners got players to agree to a cap because they opened their books and proved teams were losing money. Baseball teams have shown no inclination to do the same.

Player salaries have skyrocketed, but so have team revenues.

“If the owners go into negotiations and say, ‘Let’s put on a cap,’ they might as well not even go to the table,” said Richard Sheehan, author of “Keeping Score: The Economics of Big-Time Sports.”

“The union simply isn’t going to accept that. So you go with the next best thing, which is a steep luxury tax.”

A modest tax was imposed from 1997-99 on teams with the top five payrolls. The tax was about 34%, but only on the amount that exceeded the mid-point of the payrolls of the fifth- and sixth-highest spending teams. Roughly $30.6 million in tax was collected, including about $10 million each from the Baltimore Orioles and Yankees. No more than $2.8 million was collected from any other team.

Most experts believe a luxury tax, like a salary cap, would require union approval because it would apply a compress on salaries.

“The players have long believed that a free-market mechanism is by far and away the best way to determine what the players’ fair share of the overall industry revenues are,” Fehr said. “Players still feel pretty strongly about that.”

In the absence of either a salary cap or luxury tax, owners might expand player development efforts globally to reduce salaries. Implementing an international draft would be the first step.

“If you believe in price theory and labor theory, players are worth the money they are paid because they are rare,” Finkelman said. “So, make them less rare. The place to look is Asia. Baseball hasn’t done enough to recruit overseas players.

“I wonder if with sufficient player development efforts there isn’t a huge pool of talent throughout the world. To paraphrase Wee Willie Keeler, instead of hitting them where they ain’t, management must go looking where they ain’t.”

Selig’s incessant talk of contraction and a salary cap send an unmistakable message: Expect a fight.

Expect the players’ association to remind the owners that many of their problems have little to do with labor.

Expect the owners to make their problems the players’ problems by implementing a signing freeze on free agency during the off-season and locking players out of spring training in February unless an agreement is reached.

Testifying before a Senate subcommittee last fall, Selig said: “At the start of spring training, there no longer exists hope and faith for the fans of more than half our 30 clubs. It is my job to restore hope and faith. I can assure you this system will be changed.”

Talk of change makes the players uneasy. They generally are happy with the status quo. So what can Selig and the owners do?

“If I was an owner and trying to come up with a strategy, I’d try to split the union,” Sheehan said. “NBA owners did a little of that separating the Michael Jordans from the middle class. To the extent they were successful, they got a better deal. If baseball wants to take a page from the NBA, that’s the page to take.”

That kind of hardball inevitably will result in yet another strike or lockout.

“I’m certainly not going to go as far as to say there won’t be a work stoppage,” Selig said. “But I feel the climate is better to reach an agreement than it has been in a long time. There is a feeling both sides want to cooperate.”

Baseball has had six consecutive years of uninterrupted play for the first time since 1966-71. Will it be seven?

The best clue at the Yeshiva symposium came afterward. Met owner Fred Wilpon invited the panel and audience to take in a game against the Astros from a Shea Stadium luxury box.

Orza and Ostertag declined.

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Baseball’s Work Stoppages

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Year Stoppage Duration GL* 1972 Strike 14 days 86 1973 Lockout 12 days 0 1976 Lockout 17 days 0 1980 Strike 8 days 0 1981 Strike 50 days 712 1985 Strike 2 days 0 1990 Lockout 32 days 0 1994-95 Strike 232 days 938**

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*--Games lost; **--Plus 1994 postseason