September 3, 2002

New Agreement Fails to Cure National Pastime

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Friday afternoon, as millions of fans across the country teetered on the edges of their seats, the negotiators for Major League Baseball and the Major League Baseball Players Association finally came to terms on a new collective bargaining agreement that will run through 2006, the first ever achieved without a work stoppage.

But just how much damage was done by the threat of the strike? And how will the new agreement affect the game over the next four years?

The two biggest issues confronted by the two sides were the luxury tax and revenue sharing. These were the main points of contention during negotiations, as the positions of the owners and the players were polar opposites. The players fundamentally opposed such measures while the owners fought for as much as a 50% redistribution of team revenue.

Both a luxury tax and revenue sharing were instituted, though to a much smaller degree than the owners had hoped. While this was a huge concession on the part of the players, it is not enough.

The luxury tax will affect teams with payrolls above a certain level, which increases each year of the deal. It serves the purpose of dissuading teams from having bloated payrolls. The New York Yankees will be affected most by it, paying as much as $17 million in each of the next four years. The Los Angeles Dodgers and Texas Rangers will also be penalized next year based on their projected payrolls. For a team that spends upwards of $170 million on player salaries, a $17 million tax is a drop in the bucket, the value of one starting pitcher. Thus, this tax will do little to encourage a competitive balance in baseball.

Revenue sharing will serve a similar purpose. All teams will contribute 34% of their local revenues (mostly from local TV and radio contracts) to a central fund that will then redistribute that money to teams furthest away from the average local revenue. The most glaring problem with this plan is that there is no way to ensure that the teams that receive these monies spend them on player salaries as opposed to simply pocketing them.

Small market owners are wont to complain that they lack the financial wherewithal to compete with big market teams. So, if they are given assistance in doing so, there ought to be safeguards in place to ensure that they use this aid to improve their rosters.

Aside from these major issues, several other points were left unresolved or were not considered. While the sides did agree to steroid testing, a very positive development, other issues such as the world-wide draft, interleague play, and contraction were tabled for the duration of this deal or set aside for further consideration.

Interleague play was extended for the length of the collective bargaining agreement. When it began in 1997, it was a novel idea, but it has now grown tired and is an affront to the sanctity of the leagues. The American and National Leagues were separate entities that met only for the All-Star Game and World Series for 96 years prior to interleague play. This set baseball apart from the other major sports and kept it unique. Baseball should remain unique and play a fully intraleague schedule. Interleague games are simply exhibitions that count in the standings.

Commissioner Bud Selig pledged that two teams would be contracted before this season. His efforts to take baseball away from fans in two cities thankfully failed. Although contraction will not happen at any time during the course of this agreement, the players have agreed not to challenge an attempt by the league to contract for the 2007 season. This of course leaves open the possibility that contraction will occur in five years.

Had contraction been considered a decade ago, two teams that might have been targeted were the San Francisco Giants, who were a charter member of the National League and currently sit only two games back in the wild card standings, and the Cleveland Indians, who have since won two American League titles. The point is, one can’t predict what might happen over the next ten years.

By not agreeing now to a world-wide draft, Major League Baseball leaves open the possibility that even with increased penalty for high payrolls, teams with more money will be better able to build a minor league system.

Alfonso Soriano of the Yankees is an American League MVP candidate, a product of the Yankees’ minor league system. But Soriano was not drafted by the Yankees, he was signed as a minor league free agent out of Japan. Thus, other teams in baseball did not have the same chance to obtain him, as the Yankees offered the most money.

The biggest issue baseball may face, however, is a significant decline in fan interest. Although a strike was averted, the squabble between selfish billionaire owners and selfish millionaire players undoubtedly turned off scores of fans. Lest the players and owners forget, baseball is primarily for its fans, and both sides will have a lot of work to do in the coming months to regain the public’s trust and affection.


Archived article by Owen Bochner