Labor Talks Pick Up Pace

Negotiators Tuesday finally addressed the main issue that could derail baseball labor talks fast approaching a deadline, focusing on the contentious matter of a payroll tax as the sides returned to the table in New York.

Owners and the Major League Baseball Players Assn. intensified their efforts to reach an agreement a day after the union said it would wait until Friday to consider setting a strike deadline, working throughout the day on management’s demand to slow escalating player salaries by taxing teams with high payrolls. The sides had previously talked around the major item they acknowledge might prevent them from reaching a deal but now appear determined to find common ground in an attempt to avert the sport’s ninth work stoppage since 1972.

“We are close enough that it is possible to make an agreement in the next several days,” said Rob Manfred, baseball’s lead labor lawyer. “The differences between the parties are smaller now than they were 24 hours ago.”

The union views payroll tax as a component of revenue sharing, another means of transferring money from high-revenue to low-revenue clubs, and owners consider it an essential form of payroll regulation, resulting in a bridge difficult to gap.

However, negotiators expressed optimism about their first substantive exchange on the issue in talks still proceeding with civility and sincerity absent in previous collective bargaining.

“I feel pressure to get something done in advance of the time that any of what I regard to be the key events take place: the setting of a strike date or the actual strike itself,” Manfred said. “Both parties feel tremendous pressure to get this resolved as quickly as possible.”

The union’s executive council has scheduled a Friday conference call to reevaluate the status of negotiations. Potential strike dates of Aug. 30, Sept. 2 and Sept. 16 were discussed Monday at the executive council meeting in Chicago, and Sept. 2 or 16 might be selected unless progress continues on the payroll tax.

Management, seeking a tool to slow escalating player salaries, has proposed a 50% tax on all payroll above $98 million. The union has had long-standing opposition to any system that would penalize the clubs that drive the market, but sources said the union could soften its stance as a result of management broaching the idea of increasing the tax threshold and phasing in the tax for high-spending teams.

Although neither side would reveal specifics of Tuesday’s exchange, the union apparently made significant movement toward owners.

“It’s clear that if we reach an agreement in the next few days, it will contain a luxury tax,” Manfred said. “For us to make a deal, there has to be a luxury tax in it.”

If proposals for revenue sharing and the payroll tax were combined, as the union would prefer, the sides would be $150 million apart, with owners at $400 million and the union at $250 million.

A compromise would seem possible on those numbers in an industry that last year generated a record $3.55 billion in revenue, but management wants to keep the issues separate.

“We don’t think about the tax issue as a how-much-money-does-it-move issue,” Manfred said. “The union has talked about it that way, but we don’t share a common view as to whether the tax is about raising money or not.

“The negotiation is not about the amount of money it raises, but I don’t think this difference of opinion puts us farther or closer apart. Whatever the parties’ views are as to the philosophy of taxes, a place exists in which a negotiation can be done.”