Play Ball!

RAY SUAREZ:

After delaying their travel plans in anticipation of a baseball strike, players for the Boston Red Sox got good news at midday: There would be no baseball strike and they could get on their charter bus to go to their next game.

SPORTSCASTER:

And the fans are getting a little restless here.

RAY SUAREZ:

The news was a welcome relief compared to the scene last night at Anaheim. As the strike deadline approached, angry fans threw debris onto the field. The turnabout came today when owners and players announced a tentative deal to avert what would have been the game's ninth work stoppage in the past 30 years.

BUD SELIG, Commissioner, Baseball League Commissioner:

I think there were a lot of people who never believed they'd live long enough to see these two parties come together, make a very meaningful deal, and do it without one game of work stoppage, and I mean that. I've been… I guess I'm the longest survivor in the game now since 1970. And when I think back to all the heartache of the years, and Don is right behind me, this was a day that many people never believed would happen, and it did. And so for a lot of reasons, I'm very grateful today.

DONALD FEHR, Executive Director, Major League Baseball Players Association:

Any collective bargaining agreement requires substantial accommodations by everyone. Our prior agreements have done so. This agreement does so. But maybe this one gives us a chance to bring the game some stability that it hasn't had, and return the focus where it belongs.

RAY SUAREZ:

The two sides would not divulge details of the deal, saying it still needed to be ratified by both sides. But there were agreements on several key issues, including a new, so-called "luxury tax." Any team with a payroll over a specific limit would have to pay a tax on that additional payroll to the league. The money would be shared among other teams. Revenue sharing– wealthier, large market teams will have to share more of their locally earned funds with smaller teams in the league; a mandatory program to test for steroids among players beginning next year; and so-called "contraction;" owners agreed not to eliminate any teams until the end of the 2006 season. The owners had proposed eliminating both the Montreal Expos and Minnesota Twins before then. Owners said the agreement will help restore competition among teams at a time when salaries continue to grow– the average player's salary is approximately $2.4 million, and only some teams can afford to pay.

BUD SELIG:

I think, you know, we've made clear all along that the issue here was competitive balance, and I feel this deal clearly deals with that.

RAY SUAREZ:

Both sides said today they realized there was too much at stake to strike.

TOM GLAVINE, National League Player Representative:

I just felt like that both sides had enough common ground that we could talk about, and too much to lose to not get a deal done. And ultimately, that's the way it worked out.

RAY SUAREZ:

This afternoon, fans returned to the ballparks, beginning with Wrigley Field, where the Chicago Cubs played the St. Louis Cardinals. Fans were glad to see their teams on the field. The last strike, in 1994, which wiped out the playoffs and the World Series that year, cost Major League baseball dearly. It took five years before attendance returned to pre- strike levels. For more, we're joined by Jim Bouton, a former pitcher with the New York Yankees, the Seattle Pilots, and the Houston Astros. He is author of "Ball Four," a diary of his experiences during one baseball season. Ron Rapoport, a sports columnist for the Chicago Sun-Times and commentator on National Public Radio. And Allen Sanderson, a sports economist at the University of Chicago.

Well, Ron Rapoport, we ran through some of the basics of the agreement, but I'm guessing that steroids testing and arguments over contraction weren't at the heart of this thing. What were the do-or-die elements of this collective bargaining agreement?

RON RAPOPORT, Chicago Sun-Times:

Well, the big issues, ray, were revenue-sharing and luxury tax. I think the owners made out extremely well on both of them. I think this is the first time in the free agency era that the owners can actually celebrate the end of a negotiation and say that they won, they won big. They will be sharing, over the next four years, in revenue sharing and luxury tax. A billion dollars will be moving from the richer teams to the poorer teams. I mean, that's the good news.

The problem now down the line for the owners of some teams is that there's no place for them to hide anymore. We heard Bud Selig in the clip that you used say, "competitive balance." That's about the thousandth time I've heard it in the last month or so. The problem is competitive balance, the owners would like us to think it's from a revenue disparity. The problem is though that some of it is a brain disparity, or an intelligence disparity. If in four years the Yankees are still winning the World Series, and a lot of the low revenue teams are not making the playoffs, maybe the fans will wonder if it was revenue sharing at all that was the problem.

RAY SUAREZ:

Professor Sanderson, the owners fought very hard on sharing the pot of 3.5 billion bucks that comes into baseball every year. How did these arch-capitalists, men who are successful in so many other fields, become so devoted to socialism when it came to running their game?

ALLEN SANDERSON, University of Chicago: Well, I agree with Ron in terms of we'll see if they're as good at baseball as they are in other things. Incompetence and mismanagement are not illegal. In part, even though the commissioner and others have focused on competitive balance, I don't think that's the issue. We are not going to see Milwaukee playing Kansas City in the World Series any time soon. I would probably rate it a tie overall. The owners were able to put some constraints on players' salaries, but players won as well because they were able to stop firm salary caps and payroll caps that are prevalent in the National Football League and National Basketball Association. And I think it's a tie for fans as well. The season will be completed, but we'll be back, as it were, in court three or four years from now to do it again because there hasn't been solid footing that fixes the problem in baseball for the next decade.

RAY SUAREZ:

You say the players can take comfort in the fact that they avoided a salary cap. But doesn't a luxury tax, which forces owners to pay into a kitty if they go over a certain amount of player salary, in effect, act as a salary cap?

ALLEN SANDERSON:

An implicit one, but I think a minor one, if one looks at the numbers. The amount of money that will be shared is relatively small compared to total revenues. Also, in the end, big city teams– New York, Los Angeles– are going to do better because there are just more off-the- field opportunities for players to earn revenues. They are just not going to be there in the smaller markets.

RAY SUAREZ:

Jim Bouton, a player from the St. Louis Cardinals, Steve Kline, said, "Baseball would never have been the same if we walked out." He was talking about the pressure the players were under. Did they make a deal that maybe they wouldn't have made in other circumstances because they were feeling that kind of public pressure?

JIM BOUTON, Author/Former Player:

I think so. I think the fans were against the players. I think there's a cumulative effect of about 25 years of owners trashing the players, calling them greedy and overpaid; also claiming, for the last 25 years, ever since free agency, that teams were about to go bankrupt. Now the newest argument, small market teams don't have a chance; and also falsely blaming the players for ticket prices which have nothing to do with players' salaries. But all of that put great pressure on the players who are concerned how the fans feel about them. These are guys who have been playing in front of fans since Little League, and they want their approval.

RAY SUAREZ:

You heard Ron Rapoport call it a win for the owners, Professor Anderson calling it a tie. How do you score the result?

JIM BOUTON:

Well, however it turns out, I guarantee you that four years from now, the owners will come back and say, "no, this isn't enough either. We need something else." It's going to be interesting to watch how it might work; for example, are the high-spending New York Mets and Texas Rangers- – both in last place this year– are they going to be giving money next year to possibly the first place Minnesota Twins or the Oakland As? That will be interesting to watch.

RAY SUAREZ:

Because they're in big markets as well, —

JIM BOUTON:

Exactly.

RAY SUAREZ:

— and small market teams are doing fairly well in some parts of baseball.

JIM BOUTON:

Extraordinarily well. For example, one of the lowest payrolls in baseball is the Minnesota Twins. They're in first place there. There are five other small market teams in pennant contention as late as August, and this is something baseball never had before free agency when the Yankees were winning– I don't know, what was it– 30 pennants in 35 years. The Washington Senators, the St. Louis Browns, the Kansas City as were always in last place, never got out of last place. Since free agency in 1976, more different teams have won league championships than ever before in history. So this is a fake problem along with the fake problem of teams about to go bankrupt that we have been hearing, but has never happened in baseball. So who knows?

RAY SUAREZ:

Ron Rapoport, a fake problem? Most of the owners were declaring they were losing money in baseball.

RON RAPOPORT:

It's so hard to understand where they're coming from. I absolutely agree with Jim that this is just the beginning. One of the most important provisions of this contract, Ray, is a rollover clause. If there is an impasse again in four years from now, the owners can say that the players have agreed that the levels of revenue sharing and luxury tax now in place will be where they start from. That's a floor. So the owners are going to come back in four years and say, "we need more. We need more." But it's so interesting that the Oakland A's are in baseball's pennant race and they have a very low payroll. The Minnesota Twins, as Jim pointed out, are leading their division. Here in Chicago, the Cubs have a very high payroll. Let's not go into exactly where they are in the standings today.

It is really a question of where competitive balance comes from. Is it brains or is it money? And I think we are going to be finding out that the owners are going to have some problems when they start spending some of George Steinbrenner's money. And if you're Steinbrenner, you have to wonder, "here I am giving money to other teams. What hurts me most — that they compete for the players I'd like to sign, or that they put it in the bank and declare a profit and money for the shareholders?" Poor George, I'm starting to feel sorry for him.

RAY SUAREZ:

Well, the Yankees did pay $28 million this year into various revenue-sharing programs. There's estimates, based on the first word that's coming out from the contract settlement, that they're going to have the touch put on them for $50 million starting as early as next year. It's a big amount of money.

RON RAPOPORT:

There's some talk that George Steinbrenner is hiring attorneys to look into this. The next great conflagration may not be between the players and the owners, but between the owners and the owners. That would really be a good one to watch.

RAY SUAREZ:

Well, Professor, wasn't that underlying a lot of what was going on during this negotiation season anyway? It was depicted as the players versus owners, but weren't there really two classes of owners as well?

ALLEN SANDERSON:

Well, there are two classes of owners, but there are also more than two classes of players. In some ways, it's amazing that Don Fehr was able to keep 750 people inside the same tent because you have journeymen players and superstars and then you have people at the margins who could be eliminated by somebody else. It has been emphasized about the diversity of ownership, but there is enormous diversity among the players as well. Bud Selig only has to keep 30 people in line. Bud Selig has to keep 750 — that is a more difficult task. There is nothing in economic theory that says the owners deserve the money or the players deserve the money. There is a cartel. Baseball is an industry, as are other professional sports, that operates in a very protected industry. So it produces monopoly spoils. And after that, it's two groups at the same trough fighting over those spoils.

RAY SUAREZ:

Jim Bouton, we've talked a lot about what the owners wanted out of this. What did the players want out of this? What does a player, a sort of middle-of-the-deck player who is looking at ten or so productive years want out of a collective bargaining agreement that may end up covering half his playing career?

JIM BOUTON:

The players wanted to minimize the damage here. They knew they were going to have to compromise, and they have been compromising for 25 years because they've never really asked for anything except to continue with the current system, which itself was a compromise, negotiated in 1976 after the arbitrator ruled that the lifetime contracts were illegal and players could all be free agents in one year. That's when the owners were forced to sit down with the players and negotiate the current system of six years of service before they could become free agents. Ever since then, they have been asked to compromise on the previous compromise.

RAY SUAREZ:

Well, they've done very well in the year of free agency, going from an average of $51,000 to an average of slightly over $2 million. Even the minimum wage, which is going to be raised in this contract, is going to be around $300,000. It doesn't sound like they've been compromising too hard.

JIM BOUTON:

Well, they're compromising on the principle of negotiating what they would be worth in a completely free market. And who knows what they would be worth? You don't pay people according to whether they've got enough in this society, or whether they're worth it, or whether they need it. We pay people according to what somebody else is willing to pay them in an arm's length transaction. That's what the players would like to have. If it ends up they make a lot of money that way, then fine. If they don't make that much money, then that's okay, too. But it should be an arms-length transaction deal and they should be entitled to their share of whatever anybody is willing to pay them.

REENA AGGARWAL:

Let me go back to Professor Sanderson.

ALLEN SANDERSON:

I'm not sure which I find more disingenuous: Bud Selig's comments that 25 of the 35 teams are losing money, or Don Fehr's, or Jim Bouton's– and I respect his writing– that the players want their worth determined in a free market. This is not a free market. Sports industries operate off a zero-sum game. If the Cubs lose– I'm a White Sox fan, and I hope they do– somebody else wins. You can't get around that. You can't allocate resources in any way to get anything more than 2430 wins every year and 2430 losses. If there really were a free market for players, then Don Fehr wouldn't have a job. There wouldn't be salary arbitration. Players are not interested in that type of a free market. It is the cartel that provides the profits that pays the salaries. If we had a free market in baseball and had 48 teams instead of 30, the current 750 players would be making a lot less money than they're making now. That's a free market. So we need to be honest about what we're saying here.

RAY SUAREZ:

Professor…

JIM BOUTON:

If I could jump in for a second.

RAY SUAREZ:

Quickly. Very quickly.

JIM BOUTON:

If there were a competing major league, you wouldn't have a draft. You wouldn't have six years of service, and the players could play one league off against another. That would really be a free market. They would do very well in that situation.

RAY SUAREZ:

Jim Bouton, Ron Rapoport, Allen Sanderson, thank you all.