Wait and see

Only time will tell if new deal helps competitive balance

Many people thought it could never be done, but Major League Baseball avoided its ninth strike in the last 30 years by reaching a deal on Friday. The players and owners came to a four-year agreement, and no games will be cancelled. CNNSI.com spoke with Sports Illustrated's Stephen Cannella about the developments.

CNNSI.com: Who came out a winner in this deal -- the players or owners? Did one side give up a substantial amount more than the other?

Cannella: It seems the union bent a lot. The players are still going to come out of this making a lot of money, so it's hard to say they made major concessions, but I think they did concede more than most people ever thought they would. For example, when these negotiations started months ago, the union was opposed to the very idea of a luxury tax. The players came around on that and agreed that a stiffer tax than the 20 percent that was in place in first couple of years of the 1995 agreement was needed. I think the agreement is closer to what the owners came into the negotiations wanting than what the players wanted. That said, there's still plenty of money for the players to make.

CNNSI.com: How happy are the owners that they got the luxury tax and revenue sharing they so desperately wanted?

Cannella: I think in principle management will be happy they got some sort of luxury tax. In some way, it's a victory over the players, and the owners negotiated something that the union absolutely did not want a year ago. Whether it helps in practicality remains to be seen. There are still some hawkish owners out there -- like the White Sox's Jerry Reinsdorf and the Padres' John Moores -- who probably wouldn't agree that this luxury tax is enough incentive to keep spending down. Is this agreement going to solve all of baseball's economic problems overnight? Probably not. A segment of owners will definitely be disappointed by it.

CNNSI.com: What about competitive balance? Does this deal, which included a luxury tax and revenue sharing, close the gap between small- and big-market teams?

Cannella: I don't think the luxury tax, even if it keeps the top teams below the threshold, will have a huge impact. If most teams are below that amount and the Yankees are at the threshold or over it, they'll still be light years ahead of what teams like the Expos and Royals can afford. It probably won't do much to have smaller-market teams increase their payrolls. The revenue sharing could be the thing that helps the small-market teams, but we'll have to see if the deal has a guarantee that the money from revenue sharing goes into payrolls. There's a chance that a team like the Royals could get a chunk of money -- essentially from the Yankees -- and then put that money in its own pockets. There's no guarantee that the money obtained from revenue sharing will be used to help the quality of players on its team.

CNNSI.com: It looks as if the owners have agreed to put off contraction until 2006. Given Bud Selig's desire to eliminate a couple of teams, are you surprised they gave in on that issue?

Cannella: I'm not surprised. Contraction was a huge battle among the owners, then they tried to ram it down the players' throats last year and it didn't work. Therefore, it seemed pretty clear that it was too big an issue to be a part of this negotiation. Owners were so hung up on revenue sharing and a luxury tax that contraction fell to the backburner and there were no serious talks about it. If there were, we'd probably be looking at a strike.

CNNSI.com: What does avoiding a strike do for Bud Selig's legacy as commissioner?

Cannella: It wasn't pretty, but at least it was the first time in baseball history they were able to settle a collective bargaining agreement without a work stoppage. So that is definitely a high mark for Bud. But we probably shouldn't rush to judgment until we see how well this system they arrived at actually works. It's very possible that the problems Bud outlined about competitive balance were not completely solved. It's good that they settled this. It's good there was no strike. Those are positives for the game. But the real test is how well this deal works to change the economic landscape of Major League Baseball. Let's not forget; there was a luxury tax, albeit a weaker one, instituted in 1995 and that did virtually nothing to slow teams' spending. So we have to wait a year or two to see if the clubs are afraid of this one.

CNNSI.com: Even though there wasn't a strike, how much damage has been done to the fans?

Cannella: I think some damage has been done -- there's been some real bad publicity for the game in the past couple of weeks. But to tell you the truth, if there had been a strike, fans would've said they were angry, and then they would've come back. Fans were angry about past work stoppages, but they always managed to come back. Again, there may be another week or two of fan anger, and teams that are out of pennant races may see their ticket sales drop a bit more. But just the fact that the season is going on without a stoppage will do a lot to keep the fans in baseball's good graces. Also, fans don't care about the details of the agreement. They just don't want games to be cancelled. The fact that a strike was averted will go a long way toward making fans forget about this episode pretty quickly.

 

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