One More Strike -- and They're Out


By David Shook No strike date is set. Not yet, anyway. But listen to Major League Baseball's players and owners, and you get the idea that the last crack of the bat might come in August. The players' union, which represents the roughly 900 athletes in the league, once again is punctuating its contract demands with the threat of a walkout. The owners are, as usual, crying poverty, while refusing to release audited results.

In any labor negotiation that goes sour, both sides usually deserve their share of blame. This is no exception. Still, if the players really intend to walk out, they might first want to have their heads examined. They're among the highest paid professional athletes, raking in an average annual salary of $2.4 million. Even a reserve who rides the bench for five years can expect to average more than $500,000 a year. That's more than the typical American earns in a decade and a whole lot more than the family income of the 670,000 U.S. households the Census Dept. says still don't have indoor plumbing.

APPALLINGLY GREEDY. At a time when the economy has left many people struggling and most of the rest at least a little uneasy, the mere suggestion of a strike by an elite, highly compensated few seems appallingly greedy. It seems especially so given that player pay has risen roughly 100% since the last walkout, in 1994, which left fans with no World Series for the first time in 90 years.

The current talks center on four issues. One of them is likely to be resolved -- the free agency status of rookies from outside the U.S. (The two sides are close to reaching a deal, say people familiar with the negotiations.) But other three could create a stalemate. The unresolved issues are testing for steroids, revenue-sharing among teams, and a proposed luxury tax that teams with significantly higher-than-average salaries would pay to struggling ball clubs.

If the players were poor, some of the owners' demands might serve as strike bait. But the players are rich by most standards -- including those of the majority of their fans. And in that context, these issues don't seem to merit a collective hissy fit by the Major League Players Assn. Donald Fehr, the players' talented and aggressive bargaining chief, has made the union the strongest in professional sports. Yet might does not necessarily make right.

STILL RECOVERING. "I think the players would be making a grave mistake if they went on strike," says Mark Conrad, a sports law expert at Fordham University in New York City. "Certainly, they have a right to strike under collective bargaining rules, just as owners have a right to lock them out. But in the court of public opinion, a strike now would be a huge blow to the players. The fans are still recovering from the 1994-95 strike, and it's the fans -- the ticket holders and TV viewers -- who ultimately decide how much the players get paid."

The union did learn some lessons from 1994. It's worried that if it doesn't seriously threaten a strike, the owners will wait until the season ends and then unilaterally impose changes they want, since the collective bargaining agreement with the players has already expired. However, the owners would be taking a big chance in trying to force issues on the players, since a federal judge slapped down such attempts by the owners after the earlier strike.

Moreover, signs show that this time around some teams may really be suffering some financial strain. Even as the owners undercut their own claims of unprofitability by continuing to obfuscate their finances, the league has tentatively decided to shut down the Minnesota Twins and Montreal Expos in 2003.

MLB Chief Operating Officer Bob DuPuy also said recently that a few clubs, because of high debt and low ticket sales, may have trouble meeting their payrolls later this year (overall, league attendance is off 6% this year). While clubs such as the Chicago Cubs have tiny capital expenses, others, such as the San Francisco Giants (whose new stadium was built largely with private financing) carry large fixed costs that might be hard to cover in a curtailed season.

DERAILED GRAVY TRAIN. An equally big issue, though, is whether the items on the table this year are of sufficient gravitas to make a strike look like anything but an overreaction. A luxury tax, the teams say, would help bring more parity to payrolls -- and perhaps prompt spendthrift owners to hesitate (since they seem unable to control themselves otherwise) before signing pricey free agents.

While the union is understandably wary of anything that would derail the gravy train, such a tax existed for three years in the late 1990s without turning players into paupers. In fact, the average salary rose during those years, from $1.3 million to $1.6 million. But the union fears that a permanent luxury tax would ultimately hurt a talented free agent's chances of securing the highest salary he could get anywhere in the league.

The players also fear that a luxury tax is a stepping-stone to a salary cap -- something that football and basketball players have had to live with for more than a decade now. "We recognize a need for some revenue-sharing, but the return of a luxury tax is where the bargaining really breaks down," says Greg Bouris, a spokesman for the union.

STEROIDS: NO EXEMPTION. Still, is this the year to make pay the rallying cry for a walkout? "Fans would criticize the players as being outlandishly selfish, despite the behavior of the owners as well," says Fordham's Conrad. A far better idea, says Paul Staudohar, a sports labor economist at California State University-Hayward, is to try a temporary luxury tax again and see if the promised parity in player pay and team profits results.

Even less defensible as a strike issue is the players' opposition to steroid testing -- especially given Sports Illustrated's recent allegations that more than half of all Major League players may use the muscle-building, joint-destroying, cancer-causing drugs. Random, year-round steroid testing in the National Football League has cleaned up the sport and led to fewer serious injuries, according to both players and teams. In the Olympics, steroid use is good for a ticket home. Why should baseball players be exempt from the same scrutiny?

Drug testing could help keep the sport clean and fair

"We can accept testing if there's reasonable cause, but we don't feel that players should have to go around proving their innocence," says the union's Bouris. But what about keeping the game clean and fair? "Public pressure is going to be exerted, and eventually the players will have to agree to testing," says Staudohar, who is the author of Diamond Minds: Baseball and Labor. "Testing is necessary" he adds. "Steroids have a huge impact that reflects negatively on the game."

Already, cracks are appearing in the players' united front on this issue. New York Yankees' superstar Derek Jeter, who is doing antidrug TV commercials for The Partnership for a Drug-Free America, has said numerous times that he wouldn't mind being tested for steroids -- even as other stars, including home-run champ Barry Bonds of the San Francisco Giants, have remained mum.

FAIR TRADE. Noticeably absent from this year's labor talks are any items that might resonate with the public. The league minimum salary is $200,000, vs. the $252 million that shortstop Alex Rodriguez of the Texas Rangers is making over 10 years. Many players are just above the league minimum, and these aren't the guys driving up the cost of running a team. Setting a significantly higher league minimum isn't a high priority for either the union or the teams, experts say. Similarly, the players' union hasn't made a top priority of winning better pensions for players of the the '60s and '70s -- before free agency took effect and salaries skyrocketed.

True, the owners don't deserve any more sympathy than the players. In December, 2001, Commissioner Bud Selig presented Congress with a set of books on baseball accounting and team profits that some legislators complained were incomplete and unaudited (but what's an audit worth these days anyhow?).

And no one on management's side can offer a convincing explanation for why, if baseball franchises aren't profitable, the Boston Red Sox sold last year for $660 million. Any group of millionaire businessmen willing to pony up that kind of money for a team with a $108 million payroll (second only to the Yankees' $125 million) must be expecting a decent return.

The players shouldn't stay on the job just to appease the owners. They should do it for the game, the fans, and to prove that they really are the bigger-than-life characters they're frequently made out to be. Moreover, they might do everyone a favor by making a trade like this: The players ought to agree to submit to steroid testing, and they should let the owners experiment with their luxury tax. In return, they get a guarantee that the teams will come clean about their profits and losses, every year.

Such a deal could put some credibility and class back into baseball. Shook is a reporter for BusinessWeek Online in New York


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