On Dec. 7, a date already awash in infamy, it will have been three years since baseball owners decided to reopen their collective bargaining agreement with the players. The owners could not stay in business, they said, without a radical change in the system of how players are paid, later proffering a salary cap as their must-have remedy. Now that cap is as outmoded as a fedora and as forgotten as Richard Ravitch, the owners' erstwhile chief negotiator.
Ravitch's demands for fixed labor costs have been answered by the owners themselves with a radical idea, for them: It's called a budget. Owners don't need an overhaul of the system anymore, because over the past three seasons they proved they could rein in salaries through their own prudence and ingenuity.
According to the owners' Player Relations Committee, the median 1995 salary—half the players earned more, half earned less—was $275,000, a level last seen in 1988. "When I first heard that number," says Atlanta Brave president Stan Kasten, "I thought it had to be a mistake."
Says Gene Orza, associate general counsel for the players' union, "It's reflective of a trend to use younger players—players who have no rights."
While that median hardly calls to mind compensation for, say, tool and dye makers, it's more representative of what's happening to player compensation than the overused average-salary figure, which was $1,089,621 last season. But even that bloated number represented a 5.6% drop from the previous season. That's a significant dip considering that many high-end players arranged their multiyear contracts so that they received substantially less money in 1994—in anticipation of a strike—than in '95, when they believed a strike would be over. Also, the average salary has remained flatter than a bad slider over the past four seasons, with little differential between its low in that time ($1,012,424 in 1992) and its high ($1,154,486 in '94). In the four years before '92, the average salary almost doubled.
"There's a de facto salary cap," says agent Barry Axelrod. "I have teams talking to me about salary slots, just like they do in the NBA. This is the era of the finite budget. We don't need a salary cap or some taxation system. They're doing a better job than they ever did." The union has no complaint. Says Orza, "As long as the market is a free one, that's all we ask. The union has never asked for money. It's only asked for a process."
Some of the poorer teams still need some assistance. But that aid could come from a revamped system of revenue-sharing among owners and even a revenue-based taxation system. The owners don't need to ask the players for permission to implement those measures. All of which means there's no reason now that the two sides can't quickly cut a deal similar to the existing labor agreement before they risk further damage to the game.
Two key revenue streams are already picking up: Owners can be encouraged by a new $1.7 billion television contract (it doubles the gross national-TV money to each club, from $5.5 million last year to $11 million in 1996) and indications that fans are ready to come back. The poststrike World Series drew a TV rating 15% higher than that of the '93 Series. What's more, cash-starved franchises in both Seattle and Milwaukee soon will be flush with the currency generated by publicly financed stadiums replete with luxury boxes.
General managers have even learned how to create a buyer's market for players: flood it. The spigot opens full bore on Dec. 20, the deadline for tendering contracts to unsigned players. Rather than risk being clobbered in arbitration or bound by a rule that prevents them from cutting a player's contract by more than 20%, the clubs will cut loose numerous players, a group that could include Cleveland Indian 16-game winner Charles Nagy, San Francisco Giant reliever Rod Beck, Baltimore Oriole pitcher Ben McDonald and even Chicago Cub outfielder Sammy Sosa, whose big 1995 numbers—36 home runs, 119 RBIs and a $4.3 million salary—might be dwarfed by the size of an arbitrator's award for '96.
With most teams planning to cut their payroll next year, the market remains recessionary. When Jose Canseco, coming off $5.8 million in 1995 earnings, asked Boston for $6 million per year, the Red Sox offered him half his asking price. Prized free agents Roberto Alomar, Craig Biggio, David Cone, Jack McDowell, Fred McGriff and Randy Myers are still available.