The Issues

The key issues in baseball’s labor dispute:

The sides essentially have agreed to have a committee study the issue of a worldwide draft.

Owners: Have proposed that the commissioner can take $85 million from the central fund--where money goes from national broadcasting and licensing contracts--and distribute it unequally to teams. Because the money is to be taken equally from every team--$2.83 million each--at most $45 million could be transferred to the 14 teams with the least revenue.

*--* AMATEUR DRAFT

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*--* COMMISSIONER’S DISCRETIONARY FUND

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Players: Have proposed moving $40 million unequally from the central fund to the low-revenue teams.

*--* COMPETITIVE-BALANCE DRAFT

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Owners: The teams with the eight highest winning percentages during the previous three years would be able to protect 25 players each in the draft. Only the teams with the eight lowest winning percentages during the previous three years would be allowed to make selections, and they could take only one player each. The draft would take place annually, after the World Series but before the end of the winter meetings each December.

Players: Open to the concept.

*--* CONTRACTION

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Owners: They claim they have the right to eliminate teams but must bargain on the effects of eliminating teams, such as a dispersal draft.

Players: They claim franchises cannot be folded without the union’s approval. The union filed a grievance over the Nov. 6 vote. That grievance is pending.

*--* DRUG TESTING

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Both sides: Agreed to mandatory random drug testing for illegal steroids, and also that there will not be mandatory random testing for nutritional supplements such as the testosterone-booster androstenedione, and for “recreational” drugs such as cocaine. Must still agree to details of the program.

*--* LUXURY TAX

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Owners: To slow salary growth, owners would like a luxury tax on high-payroll teams. The tax would start in 2003 on the portions of payrolls above $102 million (using average annual values of players on 40-man rosters, and including $9 million in benefits). The tax would be raised in 2005 and 2006 at a percentage matching the cost of living if payroll disparity decreases the previous year. A team would be taxed at 37.5% the first time it exceeded the threshold, 42.5% the second time, 47.5% the third time and 50% the fourth time. The previous labor contract called for a 35% tax in 1997 and 1998, and a 34% tax in 1999, levied on the portions of payrolls above the midpoint of the fifth-highest payroll and sixth-highest payroll. Because the payroll was not fixed, most owners concluded it was ineffective, but the union claims it kept the highest spenders closer to the other teams. Teams paid $12.1 million in 1997, $6.6 million in 1998 and $12 million in 1999, a total of $30.6 million.

Players: Proposed a tax threshold of $130 million in 2003, $140 million in 2004 and $150 million in 2005, with no tax in 2006. A team would be taxed at 15% the first time it exceeded the threshold, 25% the second time and 30% the third time.

*--* MINIMUM PAYROLLS

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Owners: Proposed a $45-million minimum payroll (including 40-man rosters and benefits), to address concerns that owners may keep additional revenue-sharing money. Only Montreal and Tampa Bay were below that this season.

Players: As opposed to payroll floors as they are to payroll ceilings.

*--* REVENUE SHARING

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Owners: Hoping to decrease revenue disparity, they have proposed increasing revenue sharing, which began in 1996. Under the current system, called a split-pool plan, each team contributes 20% of its net local revenue, after deductions for ballpark expenses, to a pool. Seventy-five percent of the pool is redistributed equally to all 30 teams, and 25% is redistributed only to the teams with local revenue below the major league average. Owners first proposed that each team contribute 50% of its net local revenue, after deductions for ballpark expenses, to a pool that would be redistributed equally to all 30 teams. Using 2001 figures, the amount of shared money would increase from $167 million to $298 million.

Players: First proposed continuing the split-pool plan and having each team contribute 22.5% of its net local revenue, after deductions for ballpark expenses. Using 2001 figures, the amount of shared money would increase to $228 million. The sides say they think they are close to an agreement on revenue sharing, but the union says it must be in conjunction with a luxury-tax agreement.

*--* SALARY ARBITRATION

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Owners: Would eliminate salary arbitration eligibility of “Super Twos”--the top 17%, by service time, of those players with two or more years but less than three years of major league service. In the 1985 contract, the eligibility of players with two or more but less than three years of major league service was eliminated. Eligibility for the “Super Twos”--approximately 12 each year--was restored in the 1990 contract and left unchanged in the 1997 contract. Owners also want to be able to withdraw contract offers to players after salary arbitration figures are exchanged each Jan. 18.

Players: Oppose changes.