Commentary: Baseball's Losers Still Loseby
To grasp the psychology of the owner of a small-market baseball club, stop by a casino and look at the suckers playing the slots, doling out quarters from a paper cup. Those gamblers are trying to restrain themselves, and some do. But others, like the owners of baseball's poorer clubs, figure that if they can just scrape together a few more quarters, they can play long enough to hit the jackpot.
Now, with the new labor agreement approved on Dec. 3 by the Major League Baseball Players Assn., the poorest of the baseball owners can stay in the game a little longer, thanks to an assist from the high rollers who own the rich clubs. The "luxury" taxes in the new package take away a few million from the big spenders in New York and Baltimore to subsidize poor cousins in Montreal and Pittsburgh. Consider it a token of mercy--a few quarters clinking in the poor gamblers' paper cups. Notes Pirate owner Kevin McClatchy, "it was not an A-plus deal.
SHARING. Look at the numbers. Baseball's richest team, the New York Yankees, rakes in $80 million a year. Last year, the team's star-studded payroll topped $66 million. The Montreal Expos take in only $19 million, and spent a major-league low of $15.4 million on salaries. With the revenue sharing and luxury tax that form the basis of baseball's new four-year deal, the Yankees will pay a tax on every dollar over $51 million the club spends on salaries next year--about $6 million. That payment is expected to swell to about $12 million by 2000.
All told, the richest 13 clubs will hand the poorest 13 some $70 million this year. None of the clubs liked the deal. Indeed, they voted down the same package a month earlier. But after Chicago White Sox owner Jerry Reinsdorf, a former salary-cap hardliner, signed slugger Albert Belle to a record $55 million contract, the dispirited owners relented. Says Kansas City Royals General Manager Herk Robinson: "Was [this] a savior for small-market teams? No."
Still, all the owners knew it was high time for a deal: Many major advertisers, exasperated at the disarray in the league two years after an ugly strike scuttled the 1994 World Series, were ready to abandon the sport. "No one was going to invest in the game," says an official at Major League Baseball.
Despite their grumbling, owners do have something to cheer about. As part of the new deal, players agreed to the luxury tax, which they had long resisted. In addition, the players will chip in a 2.5% tax on their own salaries--at least $40 million--for revenue sharing. The new contract also paves the way for interleague play, so that the regular season will see match-ups between local rivals such as the San Francisco Giants and the Oakland A's. This may diminish the significance of the most meaningful interleague face-off--the World Series. But the owners will gladly trade that for some big crowds in the dog days of July and August. With these adjustments, Royals' President Michael Herman expects to find a local buyer for his club, which lost a staggering $24 million just two years ago.
SOME FLIRTING. Even so, baseball's status quo remains largely intact. The powers in the sport, the rich clubs and the superstars, would settle for nothing less. This means that poor teams, buoyed a bit by the handouts and labor peace, will proceed to join their rich brethren in hitting up their home towns for fancy new stadiums. And if the home towns object, many will flirt with out-of-town suitors.
Sad? Not very. Baseball has always had its princes and its paupers. From Babe Ruth to Reggie Jackson to Cecil Fielder, the Yankees have won pennants with talent that other teams couldn't afford. And why do the poor stay in the game? Some get smart and lucky, like the San Diego Padres this year, and win. Others, rich and poor alike, dream that if they could just put a couple more stars on the field, even if it costs a little more money than they have, it might be their turn next October. It's a miserable business plan, not much better than playing the slots. But who said a small-market club was good business? It rarely is, and even with the new deal, it rarely will be.