Baseball union resists change Organization wants to retain the gross inequity that is hurting the league

Major League Baseball's labor negotiations involve two paradoxes.The players' union's primary objective is to protect the revenues ofa very few very rich owners--principally, the Yankees'. The owners'primary objective is a more egalitarian distribution of wealth.

The union believes that unconstrained spending by the richestthree teams pulls up all payrolls. Most owners believe thatbaseball's problems--competitive imbalance, the parlous financialconditions of many clubs--result from large and growing disparitiesof what are mistakenly treated as "local" revenues.

These disparities largely reflect differences in teams'broadcasting revenues. The Yankees' broadcasting revenues ($62million) are more than those of seven other teams (Kansas City,Minnesota, Oakland, Cincinnati, Pittsburgh, Florida, Milwaukee)combined.

The owners' initial proposal included two recommendations of theBlue Ribbon Panel on Baseball Economics (George Mitchell, PaulVolcker, Yale's President Richard Levin and this columnist). One isincreased revenue sharing (from 20 percent to 50 percent of so-called "local revenues"). The other, to slow payroll growth, is a 50percent tax on the portion of any team's payroll in excess of $98million. Neither recommendation involves a new or radical concept.Baseball has revenue sharing now. It had a luxury tax from 1997through 1999.

The union's initial proposal was to increase revenue sharing onlyto 22.5 percent, and no tax. The union likes the status quo. But thisis the status quo:

Of the 224 postseason games since the 1994 strike, 219 have beenwon by teams in the top two payroll quartiles. All World Seriesgames since the strike have been won by teams in the top quartile.In 1991, 13 of the other 25 teams had payrolls at least 75 percent aslarge as the Yankees' payroll (which was smaller than Oakland's).Today, only four of the other 29 do. When the Yankees play the TampaBay Devil Rays, which they do 19 times this season, there is a $97million payroll disparity ($135 million to $38 million). One day thisMay, the Mets fielded a $63 million starting lineup against a $4million Padres lineup.

Unlike the NFL and the NBA, both of which adopted their basiceconomic arrangements after (and because of) the advent oftelevision, baseball's economic model predates radio. And flight. Andthe internal combustion engine. Today, as when the National Leaguewas founded in 1876, locally generated revenues stayed with the localowner.

But the concept of "local revenues" is problematic because no teamsells a local product. To buy a team is not to buy an entitlement toall dollars generated by games in that market. Rather, it is to buyan association with MLB. All revenue streams of all teams flow fromthat association.

As Clark Griffith (of the old Washington Senators family) says,suppose a store sells baseball caps with four differentornithological emblems: a Cardinal, an Oriole, a Blue Jay--and aGoldfinch. The first three will sell much better than the fourth, andthe value of those three derives from their association with MLB,which should receive at least 50 percent of those misnamed "localrevenues," to enhance MLB's collective health--particularly,competitive balance.

Many players have scant knowledge of today's negotiations. On ateam flight recently, a superstar, a very intelligent man, discussedthe labor negotiations with a team executive. The player said: Wewill never accept a salary cap. He was startled to learn that nosalary cap has been proposed for eight years.

Players who disbelieve MLB's financial difficulties may beconvinced by developments already under way. Attendance is down forthe third consecutive season (5.7 percent this year, which meansalmost $80 million in lost ticket revenue alone). Four of the topfive amateur players picked in the June draft remain unsigned asteams balk at the players' demands.

The San Francisco Giants' payroll is $75 million, up from $65million last year. Because of back-loaded contracts, just keeping thecurrent roster would make next year's payroll $85 million. But theGiants plan to trim to $70 million. This is a team averaging a league-best 38,658 fans per game in a park that seats 41,503--but a teampaying $20 million yearly in interest on that park, which was builtwithout public funds.

Negotiations are creeping at a glacial pace, primarily because theunion is being dilatory. It may soon set a strike date, under thepressure of which differences will be split--or not. The union mightmiscalculate, as in 1994 when it assumed the strike begun on Aug. 12would be brief because the owners would surrender. Instead, thepostseason was lost.

If a strike starts, do not expect to see baseball before nextApril. And do not expect to see today's levels of attendance then, oragain.