- The Washington Times - Friday, December 7, 2001

Major League Baseball commissioner Bud Selig made his case to Congress yesterday for eliminating two teams, facing more than three hours of oft-heated inquiry that represented some of the toughest public scrutiny of his nine-year tenure as the game's leader.
Selig told the House Judiciary Committee that baseball will lose $519 million in 2001, and said the losses stemmed primarily from high player salaries fueled by free agency and arbitration. The House and Senate are considering legislation that would roll back the game's 79-year-old antitrust exemption on matters of franchise relocation and contraction. Hearings on the Senate side will begin early next year.
Minnesota Gov. Jesse Ventura, who also testifIed yesterday, disputed the commissioner's claims that owners had suffered large losses, as did the players association. The union is bound by its collective bargaining agreement with the owners from publicly analyzing industry finances, and has been threatened with lawsuits if it breaches that clause. The outspoken Ventura did not have such a limitation and was among Selig's biggest critics in the packed hearing room.
"I have a hard time believing it, Mr. Selig, that [the owners are] losing that kind of money and still paying the salaries they're paying," Ventura said. "That's asinine. These people did not get the wealth that they have by being stupid."
Average player salaries have more than doubled since 1994, as have industry revenues.
Whether the antitrust exemption which allows baseball to control franchise moves, expansion and contraction will survive the latest Capitol Hill scrutiny remains uncertain. Baseball's unique protection under federal law has survived nearly four dozen challenges just since 1989.
Several legislators, particularly those representing districts with minor league teams, were dubious yesterday as to what curtailing the exemption would do to help the game. And President Bush, whose support would be critical for the bill's passage, has not issued an opinion on the matter.
But the commissioner received more than an earful on what Congress viewed as a blatant disregard of the industry's marked growth of red ink and competitive and fiscal imbalance.
"For years, baseball has told Congress it can heal itself," said Rep. James Sensenbrenner, Wisconsin Republican and House Judiciary Committee chairman. "Obviously, it has not done so. The numbers do not add up."
Though much of the new legislation, entitled the Fairness in Antitrust in National Sports (FANS) Act, centers on putting the sport closer to legal equity with the other major sports leagues, most of yesterday's hearing centered around baseball finances. Selig released an unprecedented level of industry data, foremost showing a record level of industry losses and debt.
"Baseball's financial losses and overall economic stability are even bleaker now than they were in the summer of 2000," Selig said, calling the game's fiscal system "broken." He added, "Although revenues continue to grow, so do losses."
The summer of 2000 marked the game's last public release of financial data, reflecting a similar situation.
Within minutes of the marathon hearing's opening, though, the latest data was roundly attacked. Franchise values have more than doubled since 1996, majority control of the Boston Red Sox is currently for sale and likely will fetch a record price for the sport, and new free agent signings continue to push peak salaries and guaranteed future compensation ever higher.
"This all strikes me as something like a child who kills his parents and then begs the mercy of the court because he's an orphan," said Rep. Anthony Weiner, New York Democrat.
Steve Fehr, an attorney representing the players union and brother of union chief Donald Fehr, agreed but could not elaborate.
"It's safe to say that upon thorough analysis, the numbers will paint a very different picture. What are they going to do, contract the Dodgers?" Fehr said, referring to Los Angeles's 2001 operating loss of $45.3 million that was the worst in baseball.
Donald Fehr went even further, saying from the union's executive committee meetings in Texas that the players have yet to receive all of the game's current financials.
Selig, however, said the game's books have been fully disclosed to the union and staunchly defended his accounting procedures, bringing the league's outside auditor from Ernst & Young to the hearing.
"We have a defined audit procedure that involves a Big Five accounting firm and is completely above board. To think that every audit firm in America is somehow engaging in some [nefarious] activity is ridiculous," he said.
Among the sport's bigger issues, Selig remained vague on many details, as he has for weeks. There remains no formal timetable, drop-date or named teams on contraction, despite a union grievance on the matter, a stadium lawsuit in Minnesota and the Congressional inquiry that all threaten to make the move impossible for 2002.
The commissioner also said Baltimore will not stand in the way of a team relocating to Washington, but again gave no indication when or if any other team relocation will happen. Selig similarly refused to give Rep. Robert Wexler, Florida Democrat, clear assurances the Marlins will remain in Florida long term.
And no formal negotiating with the union on a new collective bargaining agreement something Selig said repeatedly is critical for meaningful reform is ongoing or scheduled in the near future. The previous accord expired last month.
"Contracting Minnesota or any other team doesn't address the financial problems of baseball," said Rep. Martin Olav Sabo, Minnesota Democrat. "It is a diversion."


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