The best sports show on TV last week was on CNN, where Major League Baseball commissioner Bud Selig appeared before Congress in a desperate plea to retain baseball’s exemption from antitrust laws, which, in effect, have allowed the owners to be their own self-governing body, moving teams around at will and imposing conditions on the players at bargaining time. The hearings are, of course, a side effect of MLB’s threat to “contract” (i.e., eliminate) two of its small-market teams to alleviate what it calls losses of more than half a billion dollars in the 2001 season alone.
But to understand what was really going on and being said you need a scorecard, replete with background notes and a translation of Selig’s ground-rule doublespeak, which I have provided in this crucial section of testimony.
Selig: “Since 1997, we have also provided the union with the results of the separate revenue-sharing audits that are done of each club’s books each year by Price Waterhouse Coopers. The union has the right … to conduct its own audit of any club’s revenues. It has never done so!”
Translation: And it never will. The union doesn’t need to “audit the revenues” — anyone with a USA Today can see what the revenues are. Every baseball team’s major sources of income, the local TV contracts, the national TV contracts, and local ticket sales, are available to anyone who seeks them out. It’s the expenses, stupid, that need to be audited. Baseball expenses are like movie business expenses (which is logical since so many baseball executives spent time in the entertainment business; former commissioner Faye Vincent, for instance, was president of Columbia Pictures). You all know how the game works; we saw it best exemplified a few years ago by the Detroit Tigers, who became the Detroit Tigers Inc. and purchased Domino’s Pizza; when Domino’s Pizza goes through a severe slump it shows up as a loss for the Detroit Tigers. Selig claims the Los Angeles Dodgers “lost $59 million last season”; how much did they lose, or did they lose any money at all? Well, the Dodgers are owned by Rupert Murdock. Can you imagine how many different enterprises he could connect with “Los Angeles Dodgers, Inc”?
Rep. Conyers: ” … would you consider to provide this committee with some real records about each team, the breakouts, the salaries, consulting fees paid to team owners, the extent to which owners are earning interest on stadium loans they approved, and other related part transactions. And we’ll give you a lot of time to get that together.”
Selig: “If I may, our figures are audited three different ways. Players Association gets all the numbers, including all related party transactions … The Blue Ribbon Panel of the four gentlemen got the audited statements …”
Translation: Note that Selig just dodged the question, or rather, the request. Conyers is asking for a list of salaries for Major League Baseball executives — nobody ever talks about these, just about the players’ salaries — and for a list of all other monies paid out to owners and execs through deals involving baseball, and Selig switches the topic to the entirely irrelevant three audits of their revenue books, which, he says, are sent out to the Players Association and to the owners’ “Blue Ribbon Panel,” a group, by the way, selected by the owners themselves.
Rep. Conyers: “Don’t you know the union can’t give these statements to anybody? You just sent a letter, your lawyers, that you’d sue [union executive director Don] Fehr if he released –”
Selig: “Congressman Conyers, you have the audited financial statement for six years; the only reason you don’t have them for a seventh year, it’s not over yet. You have all the information that Mesrs. Volcker, Will, and –”
Translation: Again, Selig dodges the question. Yes, the Players Association saw all the owners books during the 1994 negotiations, but they apparently signed an agreement not to reveal anything from them — I say apparently because the union hasn’t revealed anything and the owners have threatened them with lawsuits if they do. Selig’s response says “Look, we sent you all the stuff we sent to the Blue Ribbon Panel,” which is an entirely irrelevant point, and in any event, as we’ve just pointed out, the panel was hand-picked by the owners.
Rep. Conyers: “What about the stuff I just asked you for, sir? We don’t have that — we don’t have any numbers. Staff keeps whispering in my ear, ‘We don’t have the numbers, we don’t have the numbers.’”
Selig: “I’d like to know, since they’ve been audited three different ways, what information are you looking for?”
Conyers: “Didn’t you hear me?”
Committee Chairman: “The time of the gentlemen has expired.”
Translation: Who says there’s no clock in baseball? By sitting on the ball, Selig ran out the time, refusing to answer a question or address a single issue concerning the owners’ net losses, depreciations, salaries, et al. What’s the name of the guy on first?
Here’s another fascinating exchange between the Commish and Rep. Mel Watt, D-N.C., along the same line:
Watt: “I have heard you say over and over that the system needs to be fixed. What are you waiting on to fix it?”
Selig: “Our negotiation with the Players Association. After all, we can’t share revenue without negotiation, and we certainly can’t impose salary restraint without negotiation. Those are subject to collective bargaining.”
Watt: “So what is it that you want Congress to do about that? Your testimony on the top of Page 5 says over five years only three teams … were profitable … So you’re going to eliminate two this year, two next year, two the year after that … I mean, at what point is eliminating teams going to solve this problem as opposed to fixing the system, which is what you said needs to be done, and if you have absolute authority to fix it now with an antitrust exemption, why have you not fixed it?”
Selig: “Well, I, well, I, uh, let me make two points in response. First, I said it’s going to take a myriad of solutions to fix the problem. Contraction is merely one of them. None of these will do it unilaterally. But two of these bigger issues that other sports have … are subjects of collective bargaining. I can’t do that by myself.”
Watt: “How does contacting the number of teams fix the problem? You said, ‘The system needs to be fixed.’ How does contracting the number of teams fix the system?”
Selig: “It’s one of the things that when you’ve looked at it, and talked about it, it’s one of the things that help fix the system.”
Translation: How, indeed? What Watt is trying to ascertain is whether or not baseball has a real business problem — i.e., whether or not revenues are too small for the money paid out — or whether it’s simply a case of how the revenues are paid out, i.e., if the Yankees and Braves and other so-called big-market teams shared their revenue more equitably with so-called smaller market teams, would that solve the problem? Selig’s answer is evasive; he seems to want to have it both ways. Selig makes a valid point: the owners simply can’t institute a new revenue sharing plan without approval of the union. (Why, you ask? Tricky question: the short answer is that the owners agreed to that. Why? Probably to safeguard against some renegade owner suddenly opening up on his own and agreeing to share more of his revenue with smaller teams, a circumstance which would put them all in awkward positions).
Watt, however, wants to know what difference such revenue sharing would make if only three teams made money; is it possible that the revenue from just three teams, divided more evenly, could pull 27 others through? And if the system of revenue sharing is what is wrong, how can eliminating two teams help? The answers, of course, are no and it wouldn’t, but Selig is quick to add that sharing revenue is just one part of the problem. Now we’re getting to the point: Keep your eye on the ball.
Watt: “You’ve got two less teams that are unprofitable, but the other teams are operating on the same system, and all of them, except three, are losing money, according to your testimony.”
Selig: “But the two teams that finally get contracted are two teams that are subsidized by the other teams, because of revenue sharing. And in a system where you’re losing $519 million a year, Congressman, the industry doesn’t have the luxury anymore … ”
Watt: “You told me revenue sharing was part of the fix.”
Selig: “It is, but we need to negotiate that with the Players Association. We’re not doing enough revenue sharing today, Congressman. We don’t have enough salary restraint.”
Translation: When Selig uses use the term “revenue sharing” he wants Congress, the press, the public, and above all, please God, the Players Association, to hear “revenue sharing plus a salary cap.” That’s what he means when he says “salary restraint”: a restraint on player’s salaries. Any club can practice salary restraint on its own, but if one or two or five owners don’t go along with the program then it screws up the rest. In other words, because the owners can’t trust themselves to stop spending, they want the Players Association to help them place a cap on spending.
If the owners simply went to the players and said “We’d like to make a more equitable share of TV money between the big clubs and the small clubs, please allow us to negotiate that amongst ourselves,” the players certainly wouldn’t stand in their way. But that isn’t what this is about. What Major League Baseball is trying to do is to sneak the salary cap in through the back door by lumping the issues of revenue sharing and salary cap together in one ball of wax and calling it “revenue sharing,” even though revenue sharing and salary caps are two entirely different issues.
How does “contraction” fit into this plan? It doesn’t. If two clubs couldn’t make it on their own, they’d simply declare bankruptcy, and that would be that. That’s not what all this is about. This isn’t about two clubs going out of business, it’s about going into basic agreement negotiations with the union while threatening to cut 80 jobs if they don’t get some cooperation on the issue of a salary cap.
I’ll have my trusty “Selig Decoder” tuned to all upcoming negotiations. Stay tuned.
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Why is it that people are getting stats-smart in every area but the Heisman Trophy voting? Eric Crouch has got to be the worst example of “the nation’s outstanding college football player” since Miami’s Gino Torretta in 1992. Crouch was erratic and all but ineffective against the only two first-rate teams Nebraska faced all year, Oklahoma (whom they beat in large part because of an injury to the Sooners’ starting quarterback) and Colorado, who beat them. In those two games, Crouch threw exactly zero touchdown passes and a total of three interceptions. For some reason we were expected to overlook this lousy passing because Crouch is such a great runner, with over 1,000 yards rushing and 18 touchdowns. Myself, I think that Nebraska is always going to get a huge number of rushing yards and rushing TDs because practically all they ever do is run, and it’s simply a question of which players are going to be the beneficiaries of the yards and the TDs when they divvy up the opportunities. But in any event, if Crouch’s rushing stats were supposed to be the issue, then why not compare him to running backs — and that’s essentially what he is, a running back who takes the center snap — instead of to other quarterbacks? And when you do that, Eric Crouch is a fairly ordinary player. Which, now that I think of it, makes him, by all historical standards, a perfectly suitable Heisman Trophy winner.