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House calls

Selig greeted with skepticism during antitrust hearing

Posted: Thursday December 06, 2001 4:51 PM
Updated: Friday December 07, 2001 1:37 AM
  Bud Selig, Jesse Ventura Baseball commissioner Bud Selig and Minnesota Governor Jesse Ventura are not seeing eye-to-eye. AP

WASHINGTON (AP) -- Commissioner Bud Selig's plan to eliminate two baseball teams was met with skepticism and hostile questions at a congressional hearing where he railed against high player salaries.

Selig repeatedly told the House Judiciary Committee hearing Thursday that his sport's financial problems were caused by a "system that is badly flawed."

He claimed baseball owners sustained a $232 million operating loss this year -- $519 million with interest payments and depreciation added in -- and placed the blame on salaries that have skyrocketed in the quarter-century of free agency and salary arbitration.

Minnesota Gov. Jesse Ventura, also testifying before the committee and seated next to Selig, doubted the claims of large losses.

"I have a hard time believing it, Mr. Selig, that they're losing that kind of money and still paying the salaries they're paying," Ventura said. "That's asinine. These people did not get the wealth that they have by being stupid."

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CNNSI.comís Bob Lorenz provides highlights from a long day of testimony and heated debate. Start

CNNSI.com legal analyst Lester Munson breaks down the hearings.
Bud Selig and his opponents make presentations before Congress.
Minnesota Rep. Martin Sabo encourages fans to fight for the Twins.
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Ventura blamed unfettered spending on players, citing the deal free-agent Barry Bonds is likely to receive.

"Mr. Bonds is going to get over $100 million, no doubt. Mr. Jason Giambi, they've said he'll go well over $100 million," Ventura said. "The problem out there is they're paying their employees too much money."

Rep. John Conyers Jr., D-Mich., who introduced legislation to repeal baseball's 79-year-old antitrust exemption as it applies to franchise moves and elimination, also was skeptical of Selig's figures.

"The summary information they have turned over to us is meaningless in the absence of learning details concerning related party transactions, salaries and fees received by the owners and their families, and the impact of stadium acquisition loans by stadiums," he said. "In essence, what they have told us is, `We lose money, but we can't trust you with the details.'"

Still, it was the most detailed release of baseball's financial information since professional leagues began in 1871. Just four teams -- Toronto ($52.9 million), Los Angeles ($45.3 million), Montreal ($38.5 million) and Arizona ($32.2 million) accounted for more than half the industry's operating losses. Operating losses exclude items like taxes and interest.

"Owners struggle," Selig said. "If they don't spend money, they're called `El Cheapo.' If they spend more money, they have problems."

Ventura doubted the need for a new stadium for the Minnesota Twins, who along with the Montreal Expos are the leading candidates for elimination. Selig claims the Twins need a new ballpark to survive, but Minnesota lawmakers have failed to support public financing.

Some congressmen appeared dumbfounded by Selig's vague answers.

When Rep. Robert Wexler, D-Fla., asked Selig to say whether the Florida Marlins would survive for several more years, Selig responded, "We're there now and let's hope it all works out."

Wexler didn't know what to say and was asked by committee chairman F. James Sensenbrenner if he was speechless.

 
Money Stream
Gate receipts and local broadcast revenue in 2001 (in thousands).
Teams  Gate  Local 
Anaheim  $30,208  $10,927 
Arizona  46,509  14,174 
Atlanta  62,141  19,988 
Baltimore  53,216  20,994 
Boston  89,743  33,353 
Chi Cubs  51,189  23,559 
Chi WSox  30,898  30,092 
Cincinnati  32,102  7,861 
Cleveland  69,470  21,076 
Colorado  54,015  18,200 
Detroit  42,299  19,073 
Florida  16,756  15,353 
Houston  49,161  13,722 
Kansas City  19,520  6,505 
Los Angeles  50,764  27,342 
Milwaukee  46,021  5,918 
Minnesota  17,605  7,273 
Montreal  6,405  536 
NY Mets  73,971  46,251 
NY Yankees  98,000  56,750 
Oakland  24,992  9,458 
Philadelphia  30,435  18,940 
Pittsburgh  48,610  9,097 
St. Louis  67,084  11,905 
San Diego  34,381  12,436 
San Fran  67,173  17,197 
Seattle  76,570  37,860 
Tampa Bay  18,193  15,511 
Texas  50,664  25,284 
Toronto  25,363  14,460 
Total   1,383,458   571,095
Source: MLB
 

"With all due respect, if fans are going to get those kinds of nebulous responses from the commissioner of baseball, there's almost a compelling reason from the whole lot of us to support the legislation so we can get some direct answers," Wexler said.

Rep. Anthony Weiner of New York City took a swipe at the Milwaukee Brewers, the team owned by the commissioner's family.

"I've been particularly impressed with your management of the Brewers, because it's always a good weekend when the Brewers come to town," Weiner said.

Sensenbrenner, a Republican from Wisconsin, drew laughs when defended the team by saying: "Those words will be stricken from the record."

The hearing was called after baseball owners voted Nov. 6 in favor of eliminating two teams, a plan stalled by Minnesota courts. The Senate said it will hold a similar hearing next year.

Selig kept his focus on the money battle between owners and players, and talks for a labor contract to replace the one that expired Nov. 7.

"The bottom line is the system needs to be fixed," he said. "Cincinnati is the prototype of why we need to change the system. If baseball is to succeed, it needs to succeed in middle America. The fight is here, to be very candid with you, for the Cincinnatis of the world."

In Texas, union head Donald Fehr said baseball has not provided enough information for it to be analyzed

"Simple numbers don't tell you much," Fehr said after the union's executive board meeting. "To examine figures on a sophisticated basis, you can't look at lump sum numbers."

Players didn't believe Selig.

"Do I think there is as doom and gloom as some on the other side would make it seem? Absolutely not," Arizona pitcher Brian Anderson said. "The numbers can't possibly even add up to support those claims."

During the three-hour hearing, Selig promised Rep. Jeff Flake, R-Ariz., that the World Series champion Diamondbacks will stay in the National League next season.

Steve Fehr, the brother of the union leader, testified that "on Sept. 19, the clubs' chief negotiator indicated to us contraction was highly unlikely for 2002."

He later said those words came from Paul Beeston, baseball's chief operating officer. While many of Selig's top aides sat behind him at the hearing, Beeston was noticeably absent.

Steve Fehr also said the union and management had 24 meetings from March through June, and the union gave owners a new revenue-sharing proposal June 26. He said owners never responded and broke off the informal talks.

Some congressmen used the hearing to criticize baseball for not making enough progress in increasing minorities hired by teams.

Lawmakers from Minnesota threatened baseball with changing tax laws that enable controlling owners to deduct 50 percent of the purchase price over the first five years after they take control -- a provision that "depreciates" player contracts the same way farmers depreciate tractors.

Rep. Gil Gutknecht, D-Minn., said if the Twins were eliminated, the tax laws would be re-examined.

"You can go ahead with this, but I submit there will be a very heavy price," he said.

Maxine Waters, D-Calif., got into a particularly contentious clash with Selig, who refused a request from the union to lift a confidentiality agreement covering some financial information.

"You have all the statements, all the numbers,v Selig told her.

"Mr. Selig, let me remind you, you are under oath," she said sternly.

 

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