Making the Cut Won’t Be Easy

A district judge at least temporarily barred baseball from folding the Minnesota Twins on Friday, ruling that the club must play its 2002 home schedule in the Metrodome, and that owner Carl Pohlad can’t sell unless there is an agreement to keep the team in the same ballpark.

Baseball and the Twins will try to overturn that decision before a Minnesota Court of Appeals panel, but no timetable has been set.

Despite the legal maneuvering that threatens to derail their plans, baseball officials said they will continue to push for the elimination of two struggling franchises before next season.

Owners say that their contraction plan is the first step toward creating a stable of healthy, profitable franchises that will provide revitalized competition throughout the major leagues.

A high-ranking baseball source said Friday that owners plan to rally support for reform by showing that only five teams made money last season, and the other 25 lost a total of $511 million.

Contraction won’t solve all of baseball’s ills, though. By eliminating two profit-sucking teams, owners would increase their annual revenue by an average of about $2.8 million--spare change to general managers charged with assembling a winner.

The remaining 28 owners would split $40 million in reduced revenue-sharing donations and another $40 million in shared broadcasting and licensing profits, but that would appear to do little to solve the competitive imbalance owners say is professional baseball’s fundamental problem.

“Is another million or two to a team going to make a difference? No,” former Dodger General Manager Fred Claire said. “One only has to look at the average player salary to realize that’s not a significant amount.”

The average base salary last year was $2.3 million. The Boston Red Sox paid $2.5 million to reserve outfielder Darren Lewis, a splendid defender who hit one home run, and the Baltimore Orioles paid $2.75 million to pitcher Jose Mercedes, who won eight games, lost 17 and posted a 5.82 earned-run average.

Owners voted last week to eliminate two teams--but they didn’t identify which ones. The Twins and Montreal Expos are considered the most likely choices. The Florida Marlins, Tampa Bay Devil Rays and Oakland Athletics are other possibilities.

The Twins and Expos each received close to $20 million last season in revenue sharing, a commitment that would disappear along with the teams. Their shares of national broadcast revenue ($18.5 million per team, from Fox and ESPN) and licensing and merchandising (close to $2 million per team) would be dispersed among the remaining teams.

Teams that pay the most toward revenue sharing would save the most, so major-market teams such as the Red Sox and New York Yankees could save far more than $2.8 million. However, those savings might not be realized for several years because owners first would have to share the costs of buying out two franchises, a figure subject to negotiation but estimated to be in the $400-million range.

And, although Commissioner Bud Selig acknowledges excessive expansion contributed to baseball’s economic ills, owners could recoup contraction costs years from now by adding two teams and charging a big expansion fee.

Selig said folding teams is one response to “franchises that just can’t produce enough revenue to be competitive.”

Ticket revenue is one symptom. The Red Sox, with the highest ticket prices in the majors, generated an estimated $95 million at the gate last season. The Twins and Expos each made more money from other owners--through revenue sharing--than they did at the gate: The Twins, an estimated $17 million in tickets, the Expos, an estimated $6 million.

Although owners no longer wish to subsidize teams at the bottom of the revenue standings--Selig emphasized that many owners preferred to eliminate four teams rather than two--dispensing a few million dollars among each surviving team would seem to do little to assure competitive balance in an era of $100-million payrolls.

High payrolls correlate so strongly with the list of World Series contenders that the temptation to spend more on a slim chance to win can appear foolish to owners and club executives.

“That was the problem we had with the Angels,” said Richard Brown, team president under former owners Gene and Jackie Autry. “For another $5 million we could ill afford to pay, would that make the team more competitive and would more people come out and watch, and would we get more for our broadcast rights?”

Selig does not consider the contraction plan a panacea, instead calling it “one step toward addressing the industry’s problems.”

Among the bigger problems is that some owners seem to favor financial solvency over being competitive. If, for example, a team cannot afford the $80-million player payroll increasingly necessary to win, then it might be better off losing games but making money with a $20-million payroll than losing games and money with a $50-million payroll.

The Twins and Expos recently used that strategy to turn profits.

“There’s no simple answer,” Claire said. “The owners and the players will have to recognize, which they don’t seem to want to recognize, that they are partners in this business.”

With negotiations for a new collective bargaining agreement underway, owners believe players must agree to some sort of salary restraint, and players believe owners can resolve their financial mess themselves--by significantly increasing revenue sharing.

Under the expired labor agreement, owners contributed only $2 out of every $10 in local revenue--that is, local radio and television contracts, ticket sales, suite rentals, concessions and parking--to the revenue-sharing pool. Selig’s economic study committee recommended last year that owners increase that contribution to as much as $5 out of $10, a proposition more palatable to large-market, large-revenue teams if fewer small-revenue teams exist.

The owners almost certainly would balk without concessions by the players, which Brown says should involve the reform or elimination of salary arbitration and the installation of minimum and maximum payrolls. Selig’s committee recommended a minimum payroll of $40 million.