Baseball Strikes Out


Washington. -- Poor Cleveland. The Indians have not been in a World Series for 40 years and have not finished within 10 games of first for 35 years. Lately they have been in first, but a players' strike may truncate the season, preventing the World Series.

The players' average salary is $1.2 million but the median salary is just $410,000, not so much for people with short careers at the peak of a $1.8 billion industry. The players may strike not to enforce new demands but to protect the status quo, under which this year they will get 58 percent of baseball's gross revenues, up from 41 percent just five years ago.

Nineteen owners say they are losing money as the 28 teams earn their significantly unequal portions of the $1.8 billion in revenues -- a sum until recently beyond the dreams of baseball avarice. National television revenues this year may be half what they recently were, but baseball has set attendance records in 10 of the last 12 years. Three parks -- Toronto's, Atlanta's and Baltimore's -- are almost sold out for this season. Baseball's basic asset, the franchise, has appreciated handsomely. The Orioles sold for $12 million in 1979, $70 million in 1988 and $173 million in 1993. The Florida and Colorado expansion owners paid a $95 million entry fee and when baseball soon expands again, people will pay even more.

Baseball's troubling asymmetry is that the price of players is set by a national market but teams' revenues reflect vast local disparities, particularly regarding local broadcast revenues. The TC owners and players agree there should be more revenue sharing among the clubs.

However, the owners have made their sharing proposal contingent on the players accepting a cap on the total salaries teams can pay, limiting the players to 50 percent of baseball's gross. The players respond that the owners are just trying to share the players' revenues, and that the owners only want a cap that will set the aggregate compensation of players below where the market sets it.

The owners took a year and a half after reopening the labor agreement to propose the loathed salary cap, leaving the players two months to capitulate or strike. If the players play out the season without an agreement, the owners can seek government confirmation that an impasse exists and then impose a cap. Under the owners' new rules, eight owners can block a settlement, and perhaps that many owners would profit from a strike by losing less than they are losing while playing.

The seven most recent negotiations (1972, 1973, 1976, 1980, 1981, 1985, 1990) involved work stoppages, and the owners lost every time. This time will be different, say the owners, as they do every time. The players, say the owners yet again, are making too much money to strike for long. The owners' forget that the players are successful players because they are intense competitors who hate to lose.

Furthermore, they have shown through their union a concern for coming generations of players. They have been willing to make sacrifices rather than yield ground gained against employers who were arrogant before players won the right of free agency, and corrupt after. Remember, the owners' illegal collusion against free agents cost the owners $280 million in damages to players.

While players' salaries have soared, so have revenues, to $1.8 billion from just $625 million in 1985, the year owners first said a salary cap was imperative. When free agency arrived the owners predicted that big-market teams would destroy competitive balance by cornering the market on talent. In fact, free agency has coincided with unprecedented competitive balance, and none of the six teams in New York, Chicago and Los Angeles has recently done as well as the twice World Champion (1987, 1991) Minnesota Twins, whose market contains more walleyed pike than people.

The Yankees have more than 10 times the local broadcast revenue than the Twins have. Atlanta's Braves, owned by a billionaire and backed by a superstation, have a payroll of $52 million, about $39 million more than San Diego's Padres. Although payroll disparities are essentially unchanged since 1984, the owners are right that such disparities are unhealthy.

Perhaps no reasonable revenue-sharing plan -- one that permits sufficient inequalities to reward entrepreneurship and leaves large incentives for winning -- can save the teams in some markets. Still, why should the players subsidize, with a salary cap, any teams while the owners control the number, location and ownership of the teams?

And what of the fans now facing the eighth interruption of baseball in 22 years? Many agree with the former pitcher Jim Bouton: "While the players don't deserve all that money, the owners don't deserve it even more."

George F. Will is a syndicated columnist.

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