Strike 2? Major Leagues Plan to Cut Pair of Teams

Major league baseball owners voted Tuesday to eliminate two teams before the next season, a radical step that sets the stage for another confrontation with the players’ union over how to control the spiraling costs of the baseball business.

According to baseball sources, the Montreal Expos and Minnesota Twins are the most likely candidates for contraction, the industry term for buying out and dissolving teams. The major leagues have nearly doubled in size over the last 40 years, adding 14 teams in six expansions, and no team has been eliminated since 1899.

Owners believe contraction is a dramatic first step in controlling costs, particularly salaries, and many from richer franchises are tired of contributing tens of millions of dollars per year to a revenue-sharing pool to bail out small-market teams.

Sources said conraction also might lead to new ownership for the Anaheim Angels.

Commissioner Bud Selig said no team has yet been selected for contraction but suggested owners saw no point in continued financial assistance to--or the continued existence of--teams with faint hope of making enough money to become competitive. These teams also need to be able to pay their players competitive salaries.

“It makes no sense for major league baseball to be in markets that generate insufficient local revenues to justify the investment in the franchise,” Selig said. “The teams to be contracted have a long record of failing to generate enough revenues to operate a viable major league franchise.”

The timing is particularly significant because the labor agreement between owners and players expires today, and either a players’ strike or owners’ lockout has followed expiration of each of the last eight agreements.

Union Director Issues Statement

The players’ union believes it should have a say in contraction, as a separate issue, or as part of the bargaining agreement. Donald Fehr, the union’s executive director, issued a statement that said the vote to eliminate teams was “most imprudent and unfortunate.”

“This is the worst manner in which to begin the process of negotiating a new collective bargaining agreement,” Fehr added.

Selig said that many owners supported the elimination of four teams but added that he preferred to limit contraction to two teams at this time. In addition to the Expos and Twins, the Florida Marlins, Tampa Bay Devil Rays, Oakland Athletics and Kansas City Royals fit the criteria for contraction.

Under one complex and widely discussed proposal, Montreal owner Jeffrey Loria, who wants out of Montreal but not out of baseball ownership, would buy the Marlins. In turn, Florida owner John Henry would buy the Angels from the Walt Disney Co., which wants to sell its money-losing baseball team.

That scenario depends upon the implementation of contraction, however. Angel President Tony Tavares said Tuesday that Disney has no agreement with Henry and that the team remains for sale “to the right buyer for the right price.”

Owners directed Selig and his staff to resolve several details so that remaining teams can proceed as seamlessly as possible.

For example, the 2002 schedule, which currently includes all 30 teams, will be revised. Also, assistance will be offered to team employees facing layoffs, and a reorganization plan will be devised for minor league teams affiliated with the eliminated major league clubs.

Most important, owners ordered Selig and his staff to begin negotiations with the players’ union over the fate of major league players on the rosters of bought out teams, a discussion the union believes should have started long ago.

Selig said the owners would not implement a freeze on player signings this fall and would not lock out players come spring, announcements that could have all but guaranteed next season would be played without interruption had the players responded by promising not to strike.

Instead, Fehr, the union chief, said, “[Contraction] has been made unilaterally, without any attempt to negotiate with the players, apparently without any serious consideration of other options, including relocation, and seemingly with little concern for the interests of the fans. We consider this action to be inconsistent with the law, our contract and perhaps, most important, the long-term welfare of the sport.”

Selig’s lawyers have studied contraction for most of this year and believe it can be implemented without union approval and without undue legal risk. The attorneys general of Minnesota and Florida have discussed the possibility of filing suit, and so have potential ownership groups in the Washington, D.C., area, threatening to challenge the sport’s cherished antitrust exemption by contending that owners abused their monopoly by dissolving a team rather than moving it to an available market.

Selig Opposes Move to Any New Market

The Baltimore Orioles claim Washington territory as theirs and could file a lawsuit should a team move there. Groups in Las Vegas, Portland, Ore., and Charlotte, N.C., also have expressed interest in recent years, but Selig said there are no markets to which he would currently endorse a move.

“At this point in time, if you just shift a club to another area, you just shift the problem from Area A to Area B,” Selig said.

The union believes the sport is financially healthy enough for all teams to survive with increased revenue sharing. Owners believe players must help control costs by somehow agreeing to limit wildly escalating salaries, but Selig denied that the proposed elimination of two teams--and 50 major league jobs--was a card for ownership to play during talks for a new labor agreement.

“It is absolutely not a negotiating ploy,” he said. “This has to do with a number of franchises that just can’t produce enough revenue to be competitive.”

The primary sources of local revenue are broadcast rights--for instance, the Dodgers’ deals with Channel 5 and Fox Sports Net--and stadium income from ticket sales, luxury suite rentals, concessions and parking, which makes a new cash-generating ballpark a virtual necessity for teams that do not play in major markets and thus do not command lucrative fees for broadcast rights.

The Expos’ local revenue is less than 8% of that generated by the New York Yankees, the biggest moneymaker in the sport, and less than 18% of the industry average, baseball officials said. The Expos attracted 7,648 fans per game this season, the worst of any major league team and on par with successful minor league teams, with no plans for a new ballpark and no English-language broadcast contract.

If they fold, the Expos will join a string of Canadian professional sports franchises that failed to surmount the challenge of paying escalating salaries to players in U.S. dollars while revenues in the anemic Canadian dollar stagnated or fell.

Expos officials declined comment Tuesday, but sports columnists in Montreal quickly prepared obituaries for the team. “Expos Facing Their Final Out,” read a headline in the Gazette, Montreal’s English daily. “The Final Out?” echoed La Presse, the French-language broadsheet.

The Twins won the World Series in 1991, the last team from one of baseball’s smaller markets to do so, but no plans exist for a baseball-only stadium to replace the Metrodome.

Not long after Selig’s announcement, the Metropolitan Sports Facilities Commission filed a lawsuit in Hennepin County District Court to compel the Twins to honor their lease to play in the Metrodome next season. The suit named the Twins and major league baseball as defendants.

Although the Twins were surprisingly competitive this season--and profitable--their winning record was their first since 1992. Their profit resulted from a roster dominated by younger--and cheaper--players and from revenue sharing.

Many owners are tired of subsidizing teams in smaller markets and are searching for ways to reform a sport in which high player payrolls do not guarantee victory but low payrolls almost always spell defeat.

Said Selig: “Is this some kind of tacit admission there is something fundamentally wrong? Absolutely it is not. This shows we’re committed to solving our problems.”

Still, Jerry Colangelo, owner of the World Series champion Arizona Diamondbacks, did not deny the bizarre spectacle of a sport’s eliminating teams within 48 hours of celebrating a grand series.

“Baseball is coming off a high right now,” Colangelo said. “We ought to build on that. I’m very sensitive to how we move forward.”

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Reuters contributed to this report.