The Bucks Stop Here

It seems impossible for owners to substantially reduce spending, other than by shucking players whenever they think nobody's looking. This spring, the Dodgers' Fernando Valenzuela, the Atlanta Braves' Oddibe McDowell, the San Diego Padres' Mike Aldrete and the Texas Rangers' Pete Incaviglia were all dropped by their teams in what were perceived by most observers as being simple cost-cutting measures. The Players Association claims that such moves are violations of the collective-bargaining agreement and, on behalf of the players, has filed a grievance, which will be heard by an arbitrator.

Fehr argues that if the owners really are strapped—and he's skeptical—"You'll see the free-agent market dry up. And that has an immediate effect on salary arbitration. That was clearly shown during the collusion years. If things actually turn bad, and if the capitalistic system works, the market corrects."

Except that the market for players is set on a national basis, while revenues vary by locale. That is, Seattle must pay the same for top talent as New York, though it can never make as much money as the larger market. Smulyan will take in only about $1.5 million in local TV contracts this year, compared with the Yankees' haul of $42 million. His ability to compete in the free-agent marketplace is seriously compromised. In any other industry he might look for a specialty market to fill, but, "You don't do niches in baseball," he says. "It's not like I say, 'I've got the best middle relief in baseball, come see my guys work innings five through seven.' This game depends on parity."

Increasingly, owners are asking their cities and states for enough extra income to maintain this parity. By threatening to move his team to St. Petersburg, Reinsdorf got Chicago and Illinois to build the White Sox a new stadium. The income from 85 private suites and a two-level club restaurant has kept his White Sox in the black. "Had we stayed in the old stadium, we'd be filing Chapter 11," Reinsdorf says. Baltimore, Montreal and Milwaukee got similar concessions from local officials. Detroit and San Francisco are trying to do the same.

But in most cases, income from such sources cannot keep pace with current spending levels; revenue from sky boxes is just some 12-12 pitcher's walking-around money. There are exceptions—and this only compounds the parity problem. The rich teams—New York's and Los Angeles's, for instance—really do get richer, but it may increase the burden on smaller municipalities already so hard-pressed that they are cutting essential services.

In the meantime, there will be some downscaling in baseball. "What's going to happen is, the stars will still get the money, but the little guys are going to get squeezed out," says Reinsdorf. "You'll see a lot more young players, and fewer backup shortstops making $800,000." And when that doesn't get it done? "We could collude," suggests Reinsdorf.

A joke. But it seems likely that management and labor will have to strike a new deal to ease the increasing financial strains. Says Bavasi, "Things may be so out of control at this point that we will finally have conditions that will result in a real change. The time will come when potential owners in existing cities are not available. Maybe then, in those dire straits, the union will come to management and say, Let's make a deal."

They are beginning to deal already. The owners and players have gotten together to launch a Joint Economic Study Committee, on which management and labor are equally represented by high-level economists. What the committee is studying includes increased NFL-style revenue sharing among teams, to narrow the gap between have and have-not franchises. The committee is also looking at whether there might be merit in tying salaries directly to revenue, as happens in the NBA, where players are guaranteed 53% of the profits. Such measures may seem extreme, but something extreme is necessary.