SI Vault
 
WHAT PRICE SUCCESS?
Tim Kurkjian
December 17, 1990
Baseball went on its wildest spending spree yet at the winter meetings
Decrease font Decrease font
Enlarge font Enlarge font
December 17, 1990

What Price Success?

Baseball went on its wildest spending spree yet at the winter meetings

View CoverRead All Articles View This Issue
1 2 3

"It won't take that long," says Oakland A's general manager Sandy Alderson. "There's concern now. It doesn't take much to realize there's trouble when you pick up your newspaper, look at page one and CBS is asking for a rebate, and ESPN is saying it isn't happy with its deal. On page two, there's a story about breweries being subject to advertising limitations. On page three, there should be a story about what's going on here. It [serious financial distress] is going to happen quickly, not in four or five years. At some point, everyone is going to have to say no because there will be no money left. Some clubs are in that position now. We could end up with a competitive disparity like we had in the early '80s."

Alderson's $21.7 million payroll was among the highest in baseball in 1990 and is likely to increase. But, he says, "our revenue stream isn't going to go up in the next few years unless we raise ticket prices." Rosen has the same fears with the Giants and even greater fears for less successful teams in smaller markets. "For some teams, there will be only one way to go, pal," Rosen says. "Bankruptcy."

A few teams already are operating shorthanded in the free-agent market. The Pirates, who won the National League East yet supposedly will barely show a profit for 1990, lost Sid Bream to the Braves and had to stretch ($10.6 million over four years) to re-sign free-agent pitcher Zane Smith. The Texas Rangers, who aren't backed by much capital, pursued no free agents. The Seattle Mariners were out of the market after Black's contract with the Giants set the standard. The Baltimore Orioles were shut out until they agreed to sign free-agent outfielder Dwight Evans to a one-year, $1 million contract on Dec. 6.

The doomsayers argue that baseball's $200 million-plus '89 profit is deceiving because the big-market teams—the Chicago Cubs, the Dodgers, etc.—accounted for a disproportionate share of it, primarily because of their local TV revenues. The Mariners, for instance, have a local radio/TV package estimated to be worth about $1.5 million per year. By contrast, the New York Yankees' package is worth $50 million. Which once again has raised the notion that teams in larger markets should share the wealth with those in smaller markets. And there is fresh talk of profit-sharing with players, an idea that was discussed and dropped during negotiations over baseball's Basic Agreement last spring. Even Tom Reich, an agent who represents several big-money players, said recently, "Revenue sharing is a necessary part of the future of baseball and the other major team sports, as basketball has demonstrated."

Reich hastens to add, however, that "it's the teams' fault for letting players go to free agency. If they would sign them before they get that far, I guarantee it would cost them less. If you have an important piece of property, are you going to wait until the lease runs out before you talk to the landlord? No way. There's a limit to the size of payrolls. But it's tough to have sympathy for the owners after five years of collusion."

The Major League Players Association, the strongest union in sports, is certainly shedding no tears. Says executive director Donald Fehr: "With all the collusion, the owners will get no sympathy from the players by complaining about hypothetical poverty." Fehr discounts any conjecture that TV ratings and revenues will continue to suffer. "A repeat [of this year] for the next three years [of the TV contract] is unlikely," he says. "Why would anyone even assume that?"

But Rosen says, "All I know is that unless something is done that enables the players' association and management to get together and put a stop to this lunacy, fewer and fewer teams will be operating in the black. But if 26 owners said to 26 general managers in a soundproof room, 'O.K., you can't spend any more than this budget,' I guarantee there would be a collusion charge."

One thing is certain: Fans will be asked to pay more. In New York last week, both the Mets and Yankees announced a substantial increase in ticket prices for next season, making a night at the ballpark a little tougher proposition for some families, especially with a recession looming. Still, the alarms have sounded before, and baseball has proved resilient many times. Atlanta G.M. John Schuerholz says he's concerned about the games's future, but adds, "I've been saying that for 10 years. Baseball will always be popular. It's America's game. It's going to prosper despite what we do to it."

With both the Basic Agreement and the TV contract in place for three more years, there's plenty of time to test that theory. Consider the fact that 14 months ago there were no baseball players making $3 million a year. As of Sunday, there were 25. Is there a breaking point?

After signing Righetti last week, Rosen was asked if he was finished signing free agents for the winter.

Continue Story
1 2 3