So it's time for the gamesmanship and the public relations gambits to stop. It's time to set aside the history of distrust and to focus on the major issues. Here's what those issues are, and here's SI's plan for a compromise that would resolve them:
Revenue sharing and luxury tax. While arguing the merits of revenue sharing and a luxury tax and crunching the corresponding numbers, the owners and players should actually be negotiating only one number—the total amount of money to be transferred from the richer teams to the poorer teams. That's the nut of this crisis. The two sides should then work backward by debating how to arrive at that number through contributions from revenues, a luxury tax and the commissioner's discretionary fund (a pot derived largely from TV and licensing revenues and doled out as the commissioner sees fit).
Based on the owners' three-pronged proposal—sharing 50% of local revenues ($253 million), a 50% tax on payrolls above $50 million ($80 million) and an $85 million contribution by the players to the commissioner's fund—the total shared revenue, or magic number, would be $418 million. The players' current offer—22.5% of local revenues ($188 million), no counterproposal on a luxury tax ($0) and a $40 million contribution to the commissioner's fund—would redistribute $228 million. Take the midpoint between the two plans, and you have the basis of a settlement: $323 million.
Obviously, each side would have to make concessions to reach the $323 million magic number. For instance, if the players insist on no luxury tax, then the owners should get their 50% revenue-sharing plan while cutting the commissioner's discretionary fund to $70 million. Or the owners could drop their revenue-sharing percentage and increase the fund money to arrive at the same number.
Thus far owners have insisted on a tax, claiming that revenue sharing without a "compression mechanism" at the top would be inflationary. If they don't budge on that, they would have to accept the players' 22.5% revenue-sharing plan with $55 million going to the commissioner's discretionary fund. However, the players are on record in favor of the tax concept and in 1995 proposed a 25% tax on payrolls above $50 million. Our solution (chart, left) includes middle-ground compromises on revenue sharing and the commissioner's fund, with a luxury tax plan like the one the players proposed in '94.
After the magic number is agreed upon, and the two sides compromise on where the money will come from, the last step will be to determine how to divide the shared revenue. The owners believe it should be split equally among the 30 teams in what's called the straight pool concept. The players want a split pool, from which more money is funneled to the seven or eight lowest-revenue clubs. The solution is a hybrid plan in which 80% of the revenue is shared equally and the remainder is divided among those clubs with revenues below the industry average.
Contraction. The talent pool isn't shallow enough to warrant eliminating teams, and under a deal that redistributes $323 million, plus additional changes to the game that would improve competitive balance (laid out in the pages that follow), contraction is unnecessary.
Steroid testing. When players sign on to play major league baseball, they place themselves in a public trust. Think of baseball as a publicly traded company and the fans as stockholders. Fans must have full confidence that the talent and outcome are untainted; otherwise we're talking about pro wrestling. That's why we have rules prohibiting players from betting on baseball. And that's why steroid testing is needed.
This should be a no-brainer. The fans want testing. The owners want it. The clear majority of the players want it, according to a recent USA Today poll. Now it's up to the union's board to make it happen.
An independent agency should administer and monitor the testing, which should be random and year-round, as it is for the NFL and IOC, because the off-season is a popular time for bulking up with performance enhancers.