Baseball deal ushers in air of conciliation Newest agreement ensures labor peace in all four pro sports; Truce through 2000; Expert says issues will continue, though


After an unprecedented period of labor strife, fans of the nation's major-league sports can enjoy a breather through at least the turn of the century.

It is, however, likely to be only a temporary truce from the battle over how to divide the spoils of America's love affair with sports.

"The labor wars will always continue. It's really an issue of who splits up the pie, the people who put up the capital or the people who provide the labor?" said Martin J. Greenberg, a Milwaukee attorney and director of the National Sports Law Institute at Marquette University.

This week's tentative agreement ending baseball's four years of hot and cold warfare brings to an end a tumultuous period that saw virtually every major-league sport marred by conflict with its players.

The NFL settled its ground-breaking collective bargaining agreement in 1993, after years of bitter courtroom battle and a failed strike in 1987. The agreement was extended last year to run at least through the year 2000.

Although no games were canceled, the NBA briefly locked out its players from training camp in 1995 -- the first work stoppage in the league's history. The resulting agreement should guarantee labor peace through 2001.

A 103-day lockout by the NHL that year resulted in a shortened season and the first, true form of free agency in that sport's history. The deal expires in 2001.

And, of course, baseball players struck for 232 days beginning in 1994, after two years of negotiations, canceling a World Series for the first time. Contractual peace should reign at least through 2000 and possibly a year longer.

The result of all this fighting? A revolutionary change in the economic environment in which the nation's premier, team-sport athletes play. All four major leagues now have agreements in place that balance some form of free agency with restrictions on pay.

Ideally, this should provide players with a fair share of theirsport's profits without bankrupting their teams.

"What's happening is we are moving toward a socialist system in sports," Greenberg said.

The mechanisms differ by sport, but were designed to give both players and owners something they had been desperately seeking for years.

The players have the chance, after a certain minimum number of years, to sell their services to the highest bidder without restriction. This, and the success of the leagues themselves, have driven salaries to levels unimaginable only a few years ago. The pay in all but the NHL now averages at least $1 million a year and the NHL, at about $700,000, is fast catching up.

The world's highest-paid team athlete, Michael Jordan of the Chicago Bulls, will earn $25 million this season.

For the owners, they are guaranteed at least some limits on how high the overall pay can go. In the case of basketball and football, the limits are tied to the revenues generated by each league, giving the players a direct stake in the success of their sports.

In hockey, the cap of pay only applies to rookies, but this is significant in a sport dominated by youthful players often signed out of high school.

Baseball will pioneer a concept discussed by the various leagues for years: detering pay by penalizing the team owners for busting the scale. The so-called "luxury tax" is designed to slow the growth in pay by hitting the most generous team owners with a penalty equal to about a third of the amount their payrolls exceed certain benchmarks.

It is not the salary cap the owners had sought. But it is the first significant restriction on pay agreed to by the union since free agency was won decades ago.

"It was a real recognition by the union that they've got to give some credence to the economics of their employers or there will be no one to play for," said Greenberg.

Baseball owners have long said a control on spiraling pay was necessary to keep struggling teams from falling so far out of contention that they could be forced out of business.

The players traditionally responded that the owners should protect their partners by sharing more of their revenue, along the lines of, say, the NFL, where 90 percent of the sport's revenues are divvied up.

In this, the players have won a partial victory: The owners agreed to a complex formula that will take from the richest teams and give to the poorest. The proceeds of the luxury tax, for example, will be paid into this pool.

"I think the sports leagues are wanting to move in the direction of stability and predictability in their labor costs," said William B. Briggs, an adjunct professor of law at Cornell and an assistant general counsel to the NFL.

The ultimate impact of the baseball agreement won't be known until it has been tried for a few years.

"It depends on how it works," Briggs said.

Some of the other unions may decide a luxury tax is preferable to a salary cap. Basketball players, who pioneered the idea of a salary cap tied to league revenues in 1983, have been trying to get out from under the cap.

Labor comparison

Free agency and salary restraints in the four major pro sports:

Major League Baseball

Expires: 2000 or 2001, at option of players.

Free agency: After six years.

Salary curbs: A luxury tax on the five highest-payroll teams will deter salaries in excess of pre-determined levels, growing from $51 million to $58.9 million over the term of the contract. No tax in 2000 and 2001.


Expires: 2001

Free agency: After three years.

Salary curbs: Team salary cap set at 53 percent of designated revenues. Cap grows from $24.3 million this season to a projected $32.5 million by 2001. Players signing new deals with their current teams are not counted against the cap.


Expires: 2001, but either side can reopen in 1998.

Free agency: Unrestricted after four years for new players; after 10 years for other players making less than average pay; and for any player after age 32, dropping to 31 next year.

Salary curbs: Rookies must be signed to three-year contracts and the pay can't exceed $699,000 (U.S. dollars) this year, rising to $806,250 by the final year.


Expires: 2000 with option for two more years.

Free agency: After five years, dropping to four.

Salary curbs: Team salaries capped at percentage of designated league revenues, ranging from 62 to 64 percent over contract.

Pub Date: 11/28/96

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