Blue-ribbon nonsense

The baseball owners' hand-picked committee, working from cooked books, has an absurd plan to fix the sport's finances. Why is the media taking it seriously?

By Allen Barra
July 21, 2000 11:00PM (UTC)
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Question: If your union was in contract negotiations with management and management executives presented you with a financial proposal from a panel selected by them, would you accept it? You might, if you're the kind of person who would loan your keys to someone you just met on the subway. Another question, then: Why is the press accepting the baseball owners' blue-ribbon panel proposal, or, if not actually accepting it, taking it seriously?

The "blue-ribbon panel" (and who, I wonder, awarded it that name?) was mentioned a few weeks ago in this space. This is the panel that was supposed to come up with ideas to correct baseball's competitive balance problem. Last Friday it presented its conclusions.

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The New York Times, in an accompaniment to Murray Chass' July 15 report on the committee's findings, posted a sidebar with the headline "Unlevel Playing Field," with figures for "Total Revenue," "Local Revenue," "Payroll" and "Profit/Loss" for eight major league teams. The figures gave credence to the most publicized aspect of the report, that from 1995 through 1999 only three teams -- the New York Yankees ($64.5 million), the Cleveland Indians ($45.9 mil) and the Colorado Rockies ($12.4 mil) -- made any money.

And the basis for this information? If you look carefully, at the bottom of the bar there was some smaller print: "Source: Report of blue ribbon on baseball economics." Which, of course, got its financial information from the commissioner's office. And the commissioner, we should never forget, is an employee of Major League Baseball.

The Players Association's executive director, Don Fehr, gave the report the respect it deserved: "We always get some report like this before we head toward a negotiation" for the basic agreement. But for every fan who read Fehr's comments, I'll bet 50 saw the sidebar. And how many casual readers see things like this in the New York Times or the Washington Post or the Los Angeles Times, or worse, USA Today, and think, Jeez, I guess it's true that most of the teams are losing money?

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OK, that's not exactly what the Times' sidebar said, but how many readers would get that impression? How many would carefully read the article and find out that the so-called blue-ribbon panel was selected by the owners, not by a combination of the owners and the Players Association? Many? Most? Nearly all?

The Times' handling of the panel's report is typical of the way the mainstream sports press handles sports business issues. You might think there'd be some skepticism for a report that shows the Atlanta Braves -- winner of three pennants in the last five years; landlords of a spectacular new stadium that was funded by taxpayers; flagship for the owner's own national TV network -- losing nearly $7 million over the last five years. I mean, if the Atlanta Braves couldn't make any money by going to the World Series and beaming their games all over the country, what hope is there for other teams?

But no, the Times must appear objective on such matters, and so hundreds and thousands of fans walk away with the impression that the New York Mets ($40.5 million), San Francisco Giants ($97 mil) and even the Baltimore Orioles ($10 mil -- so much for the drawing power of Camden Yards) actually lost money.

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Are panel members such as George Mitchell (the former Senate majority leader), Paul Volcker (former chairman of the Federal Reserve), Richard Levin (president of Yale) and conservative columnist George Will stupid? Do they think we're stupid? Do they really feel confident that they were given the genuine financial figures by the baseball owners, or that if they were, they are capable of weaving through books cooked by people who could teach the motion picture industry lessons about hiding money?

Is it possible that just three teams made all the profits over the last five seasons, about $121 million, and that the rest of the 27 teams together lost a staggering $1 billion plus? In that case, what good would sharing a few million dollars of George Steinbrenner's money do?

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Not that the committee didn't come up with some sensible suggestions -- or at least one. It did recommend that the owners share "40 to 50 percent of their local revenue," which, of course, means local TV money. Since local TV contracts are the primary reason for the disparity in baseball's so-called big and small markets, this would certainly be a step in the right direction. In fact, it might be the only one needed. But did you ever see a committee that knew when to keep its mouth shut?

The other major recommendations are:

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  • A 50 percent competitive balance tax on portions of payrolls above $84 million. The point of this is to put a "drag" on salaries by discouraging owners from spending by taxing them. Did it occur to the panel that either A) the tax wouldn't work, in which case the owners wouldn't like it, or B) it would work, in which case the players won't approve of it?

  • Encourage clubs to have a minimum payroll of $40 million. What exactly does "encourage" mean? The committee report merely hints at "withholding central fund money from clubs that do not reach the minimum." But "central fund" in this case doesn't mean money from the national TV contract or merchandising, which the commissioner has no authority over. It means "Internet money," which might be several years in the future, if it shows up at all. And from a legal standpoint, it's not certain that the commissioner has the authority to withhold that money, no matter what his job description says on paper.

  • This is my personal favorite: Financially troubled teams should be allowed to relocate "more readily" to better financial markets. First of all, let's leave off the issue of where these better markets are (Barcelona? Tokyo? Havana??) in an era when Major League Baseball has expanded all over the country and into Canada -- except maybe to say that the best markets left may be the ones left behind (Washington and Brooklyn). Let's stick to this issue: Isn't the panel encouraging the owners to exercise precisely the same right of free agency that they're trying to deny to the players with luxury taxes and spending caps?

    These are only a few of the trip-wire issues commissioner Bud Selig is going to have to deal with now that he's been foolish enough to set the committee thing in motion. It's going to be fun watching such an elaborate plan built on greed and hypocrisy crash and burn. Meanwhile, I'm enjoying the spectacle of watching George Will -- a member of the board of directors of both the Baltimore Orioles and San Diego Padres, by the way, and why isn't it viewed as a conflict of interest that someone with these ties is on this panel? -- double talk himself into a corner. I'd pop myself some corn and pay the cost of a pay-per-view championship fight to watch the scene as Will tries to sell a group of Republican multimillionaires on the virtues of taxes and socialism.


  • Allen Barra

    Allen Barra is the author of "Inventing Wyatt Earp: His Life and Many Legends."

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