Despite movement, not much optimism

SCOTTSDALE, ARIZ. — SCOTTSDALE, Ariz. -- The euphoria that enveloped the baseball labor negotiations Friday was nowhere in evidence during yesterday's talks, but each side did establish a clear bargaining position -- for better or worse.

Union officials cut about $5 million off the luxury tax threshold that they presented to the owners Friday. The owners presented a comprehensive proposal that looked in some ways like the settlement recommended early last month by special mediator William J. Usery, but was not similar enough to keep the union from accusing the owners of backtracking on several key issues.


The players now are offering a plan that calls for a 25 percent tax on excess salary over a threshold that is equal to 133 percent of the average major-league payroll. Using 1994 salary figures, that would drop the threshold to about $54 million per team, but still is far from the $40.7 million threshold -- and 50 percent tax -- that the owners said they would agree to under the Usery compromise.

Management's counteroffer also would put a 100 percent cap on arbitration awards in 1995 and eliminate arbitration entirely next year, trading it for restricted free agency and higher minimum salaries.


Despite the movement, management and union representatives seemed far less optimistic than a day earlier. Colorado Rockies owner Jerry McMorris expressed frustration that the economic gap remains extremely wide, but it was the first time that both sides presented a new proposal on the same day.

"We're disappointed, considering we've been waiting since Wednesday," McMorris said. "I wish it would have been more. It isn't, but at least we have a number. . . . At the rate we're moving, we could be here until Labor Day."

The players considered the Usery recommendation to be the baseline for the owners, so they had to be disappointed also, since the owners did not embrace Usery's arbitration trade off. The Usery proposal would have kept arbitration in effect for 1995 and then traded arbitration eligibility for four-year and five-year players for unrestricted free agency. The owners want the option of draft choice compensation or restricted free agency for those players, and higher minimum salaries for remaining players who were eligible for arbitration under the old rules.

"It's [a proposal] which in all respects provokes in one and all members of our bargaining committee a feeling of profound sadness," union chief Donald Fehr said. "The owners are taking a step away from the players and a step away from their previous positions."

The owners' proposal would span seven years with an opportunity for either side to re-open after five. It also would push the Usery tax terms into effect immediately instead of phasing them in over several years.

That caused the players to cry foul, claiming that the owners already had accepted the Usery compromise and were pulling things off the table, but McMorris insisted that the Usery recommendation was only acceptable as a comprehensive agreement.

"We were prepared to recommend that ownership accept the Usery proposal," McMorris, "but we're not going to let the players treat it like a smorgasbord and pick out just the things they like."

The luxury tax remains the overriding issue in the negotiations, and-- despite the reservations of the union -- both sides finally are on the same wavelength. Both proposals would establish a )) luxury tax threshold based on a percentage of the average payroll. Teams that go over that level would have to pay a tax on the excess payroll.


The Orioles, for instance, would have spent $44.6 million in salaries and benefits over a full 1994 season, $3.9 million over ownership's threshold. Under the ownership plan, they would be liable for a $1.95 million tax. But, under the players' plan, the Orioles would still have $9.4 million to spend before incurring any tax.

It didn't figure that the owners would take the union offer seriously, since any taxation plan with a $54 million threshold would have little impact on payrolls during the three-year term of the tax plan. Only one team -- the Detroit Tigers -- would have paid any tax if such a system had been in place in 1994 and the season had run its course. That tax on the Tigers would have been about $650,000. Ownership is looking for a far greater drag on salaries.

The owners remain on a tight schedule. There is an owners meeting set to begin on Tuesday in Palm Beach, Fla., where Major League Baseball is expected to move forward on a two-team expansion, but McMorris indicated yesterday that he would stay in Scottsdale if the negotiations continue to progress. Union negotiators left open the possibility of walking out on the negotiations, but are expected to remain at least through today.