Talking the talk
To speak labor-ese, these are some terms to master
By John Donovan, CNNSI.com
The language of baseball's labor negotiations can be downright confusing at times. Here are some terms to look for as baseball's haves and have-mores struggle to hammer out some sort of new labor agreement in the upcoming weeks (months? years?).
We'll update the list as things progress.
If things progress …
One of the things that makes baseball unique is the exemption it enjoys from federal antitrust laws, a present from the U.S. Supreme Court in 1922.
That exemption states, essentially, that baseball does not fall under the auspices of regular commerce so it doesn't have to conform to the national antitrust laws. Those laws are designed to keep companies from monopolizing an industry.
Baseball's exemption has been brought to light again because baseball, if it has its way, plans to eliminate two teams before the 2002 season (see contraction). That has riled lawmakers, fans and many others who argue that other industries cannot conspire to close two plants to better divvy up profits. They claim that baseball is practically flaunting its status of being immune to antitrust laws.
A bill has been introduced in Congress (sponsored by a pair of Congressmen from Minnesota and Michigan) to limit the exemption. Lawmakers will have a tough time revoking or even limiting the exemption, many analysts believe, especially with former Texas Rangers owner George W. Bush now sitting in the Oval Office. The exemption has been challenged many times before, with little success.
Still, the arguments against baseball enjoying an antitrust exemption, and the arguments for it -- owners claim it has stabilized the game for all these years -- will be waged.
This is an idea whose time has probably passed. Mentioned in the Blue Ribbon report, it calls for the worst eight teams to be able to draft players off the best eight teams every year.
The Athletics made it to the ALCS, but still face tough financial competition to keep free agents like Jason Giambi. AP
The idea was to keep the better, presumably richer teams, from stockpiling good players. If they tried to do that, the Bottom 8 could just pluck off any player not on a Top 8 40-man roster.
A problem: A high-revenue but low-performing team --the Baltimore Orioles, say -- could pluck someone off a low-revenue but high-performing team -- say, the Oakland A's. Doesn't seem right, does it?
This is what owners call the on-field manifestation of the current economic woes of the game. The richer teams win, the not-so-rich ones don't.
The idea of competitive imbalance is explained in a July 2000 report, the Commissioner's Blue Ribbon Panel on Baseball Economics. Through the almost 100 pages of the report, the panel shows that, from the period from 1995 to 1999, richer teams, indeed, won more often. In the playoffs, they won all the time. In that period, the report says, 158 postseason games were played. Not one game was won by a team with a payroll in the bottom half of the league.
The opponents to this idea of competitive imbalance based on payrolls say the Blue Ribbon study is hardly reliable because it covers only five years. They claim competitive imbalance is a cyclical thing not tied to payrolls. They point to the success of low-revenue teams like the Minnesota Twins and Oakland Athletics in 2001. The Twins were in first place for much of the year. Only the Seattle Mariners won more games than the A's.
Still, the Twins didn't make the playoffs. And the A's, though they won the first two games of their divisional series against the New York Yankees, ended up losing that series, three games to two.
Competitive imbalance? Certainly, many would agree that if the richer teams don't win more often (the Baltimore Orioles, for example), they certainly have a better chance of winning more often because they can afford the better players.
But the arguments rage on.
The granddaddy of owners' threats.
MLB Commissioner Bud Selig has not disclosed the amount of money that would be paid to the eliminated teams. AP
Commissioner Bud Selig has said Major League Baseball will buy out two owners and fold their teams by the start of the 2002 season. He hasn't said who will go. But the Montreal Expos and Minnesota Twins are the likely front-runners.
The idea behind contraction is basic enough. A smaller, fitter league means better competition (because the worst players and teams are weeded out), less sharing of revenue (with 28 teams, everybody gets a bigger slice) and a healthier overall business.
Problem One: Fewer teams, fewer players. It's not something that will go over well with the players or their powerful union. Already, the union has objected to the plan. Problem Two: Lawyers.
Some folks in Minnesota already have filed suit over a possible folding of the Twins. And, as of mid-November, the Twins hadn't even been named as a possible choppee. Still, a Minnesota judge has slapped a restraining order on any contraction talk until a trial can be held to determine the legality of contraction.
A bill has been introduced in Congress to revoke baseball's exemption from federal antitrust laws as a result of Selig's contraction call, too.
It is, this contraction idea, a legal mess, through and through.
Some think the whole contraction issue may be a negotiating ploy, though Selig insists it's not. Some say it's a way to strong-arm governments to push through stadium funding legislation (a problem in Minneapolis and in South Florida).
Others say it's a way for the owners to get an upper hand on the players' union. If contraction goes through, owners will have a bargaining tool they never had before. They will have the ability to give back some of those players' jobs lost when the two teams were folded.
Owners might be willing to increase roster sizes (from the current 25- and 40-man rosters) if -- and this is a huge if -- the players' union accepts some sort of salary restrictions. That's something the union has staunchly rejected for years.
Whatever, baseball hasn't actually shrunk in size in more than a century. The legal hurdles of contraction seem almost too much to overcome.
But the owners -- who have said shrinking by four teams is still a possibility -- are giving it a try. So it seems.
This goes hand-in-hand with contraction. It is, simply, a matter of finding teams for the players who will be without a team if baseball shrinks to 28 or, perhaps, 26 teams.
Montreal's Vladimir Guerrero would be a hot property with a career .319 average and 158 home runs and 469 RBIs over the last four seasons. Brian Bahr/Allsport
At this point, of course, it's all fun and games. Who would get Montreal's Vladimir Guerrero, for instance? What about all that good starting pitching in Minnesota?
Good hot stove league stuff. But hardly critical until the contraction hammer finally comes down. If it does.
Probably a misnomer, these terms often are used to describe large-revenue and small-revenue teams. The size of the market often reflects revenue. But not always accurately.
In smaller markets -- Seattle and Cleveland, Milwaukee, Detroit, Pittsburgh, soon in Cincinnati -- new money-generating ballparks make teams more financially viable. That's why owners without new stadiums so badly want new ones built.
Still, a city like Milwaukee will never generate the type of income for a team that a city like New York does. The Brewers had $69.6 million in revenues in the 2000 season (before Miller Park was opened), the Yankees $192.4 million (according to Forbes).
But if some sort of revenue sharing is instituted, the Pittsburgh Pirates ($70.4 million in revenue in 2000, before new PNC Park opened) can get close to the same level playing field, economically speaking, as the Los Angeles Dodgers ($131.3 million in revenues).
Or so the dream goes for the little guys, anyway.
In the last agreement between owners and players, after the work stoppage that canceled the 1994 World Series, owners agreed to pay a tax, generally around 35 percent, on any player payroll that exceeded a preset amount (the amount started at $51 million in 1997 and rose to $58.9 million in 1999). The money goes into a fund and is split up among the lowest-rung teams.
Many would like to see the tax (also called a competitive balance tax) raised to 50 percent on payrolls of $84 million or more. Without some salary cap measure, some sort of luxury tax is almost surely to be reinstated.
The Blue Ribbon Panel actually sees this as a viable option, though no team has re-located in almost three decades. (Strangely, perhaps, the commission did not see contraction as necessary.)
Expos fans face the double threat of both contraction and relocation as an end to baseball in Montreal.
Many people see moving a franchise as the best option to rid baseball of its more lowly markets. It is why the Montreal Expos (whose average home attendance in 2001 was 7,648 in run-down Olympic Stadium) have been rumored to be going to Northern Virginia.
Portland, Ore., also is hot for a major-league team. San Jose, Calif., is often mentioned. Las Vegas. Whether they would make good markets or not is up to some debate.
But the argument is that they should get a chance, rather than baseball just lopping off teams because a team might perform poorly in a given market. Cleveland used to be a poor market. So did Atlanta and Seattle. Now they are among the best.
There are problems with relocation. Owners who have territorial rights to a market to which a team may relocate will put up a fight (the Baltimore Orioles, for instance, in Northern Virginia). But if contraction is shot down, relocation will be looked at closely.
When this comes up, Yankees owner George Steinbrenner blanches. Other owners of rich teams hide. This is literally taking from the rich to hand to the poor.
Baseball already splits up its leaguewide monies. The so-called "central fund" money comes mainly from merchandising and the national television contract. Teams all get, generally speaking, an equal amount of that pie. Considering the national TV contract from FOX is $2.5 billion over five years, that's a rich pie.
But that's not the sharing that people talk about when they talk about revenue sharing. They're talking about local revenues that are not shared -- again, generally speaking -- as of yet.
Those local revenues include ticket sales and the local TV contracts (the local radio and cable TV contracts, too). The local revenues also include concessions and parking and money from luxury boxes and team sponsorship money (adidas's deal, for instance, with the Yankees). Proponents of revenue sharing want all this money thrown into a pot and split up evenly.
The arguments against it are simple: The Yanks say they work hard to get that money and they shouldn't have to split it with, say, the Tampa Bay Devil Rays, who can barely get a TV contract.
The Devil Rays and those for revenue sharing argue that the Yanks have to play somebody. It's the "We're all in this together" argument, the baseball-as-a-brotherhood cry.
Well, if contraction is the granddaddy of owner threats, it's only because this is what they really want. Control on players' salaries. Control that they have been unable to grab on their own.
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The NBA has a salary cap, and the NFL. But because baseball has the strongest players' union in sports history, baseball so far has been able to quash anything close to a restriction on salaries. As a matter of principle, players don't even want a minimum salary.
The players argue that market conditions ought to set what a player can be paid. If Texas Rangers owner Tom Hicks can afford that $252 million to pay Alex Rodriguez … well, fine. If not, they say, fine.
Taking that stance, players salaries have increased remarkably over the years. In 1976, the average salary for a major-league ballplayer was $51,000. In 1990, it was almost $579,000. In '92, the average baseball salary cracked $1 million a year.
In 2001, the average salary for a player was almost $2.3 million.
The players, mildly speaking, would rather scrub the dugout floor at Shea with their tongues than agree to anything that would limit those salaries. If a salary cap of any kind were even proposed, that's liable to send any negotiations into a tailspin that won't be easy to correct.
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