- The Washington Times - Saturday, August 31, 2002

NEW YORK Major League Baseball averted a strike by its players yesterday when negotiators, with only hours to spare, reached a tentative agreement on a new labor contract.
The Major League Baseball Players Association agreed in principle to a four-year contract that heralds significant changes to the game's economic structure. The agreement calls for vastly increased revenue sharing among clubs, the return of a luxury tax on the payrolls of high-spending teams, no elimination of teams through 2006 and, for the first time, a steroid-testing program for players.
The end of the threat to eliminate, or "contract," teams gave the efforts to bring baseball back to the Washington area another sizable boost. Owners had sought to wipe out two teams this year, but a legal challenge in Minnesota blocked their efforts to eliminate the Twins.
The Montreal Expos, another team thought to be a prime candidate for contraction, is also considered the strongest candidate for relocating to the District. The Expos are owned and operated by Major League Baseball.
"This is the best possible outcome for Washington," said Fred Malek, chairman of a District-based group that seeks to land a franchise. "The current situation in Montreal is not sustainable, and this agreement, I think, makes them more likely of moving."
Major League Baseball officials declined yesterday to address the prospect of a team moving in 2003 or after. However, Commissioner Bud Selig has long pledged to consider franchise relocation after a labor deal with the players union was struck and has called Washington the "prime candidate" to get a team.
The players had pledged to go on strike yesterday if no agreement was reached, and they almost certainly would have walked off the job without a deal. The agreement represents a huge victory for the owners, who had long sought meaningful economic changes and had been out-negotiated by the union in the past eight bargaining sessions.
The agreement also averted the ninth work stoppage in baseball since 1972 and represented the first time since 1970 that players and owners accepted a new collective bargaining agreement without a strike or a lockout.
The long-running feud between owners and the players union wiped out the World Series in 1994 and threatened to do so again this year. Thus, the agreement yesterday was a historic occasion for the troubled sport.
"This has been a long, very difficult and very winding road," Mr. Selig said. "But at least today we were able to do what had never been done before."
Formal ratification of the agreement by both players and owners is expected to take place late next week.
"All streaks come to an end sometime," union chief Donald Fehr said. "This one was due."
Revenue sharing among clubs will increase from $169 million per year to an average of more than $250 million during the life of the deal. The increase in revenue-sharing rates for wealthy clubs will be phased in, reaching its full effect in 2005 and 2006. Those funds will be used to prop up economically struggling teams such as the Florida Marlins, Tampa Bay Devil Rays and Minnesota Twins.
A luxury tax on high-spending teams, the subject of the most heated negotiations, returns after a four-year absence. Under the terms of the new deal, teams will be taxed on every dollar spent on player payroll more than $117 million next year, rising to $137 million in 2006. The tax rates will range from 17.5 percent to 40 percent, depending on the year and number of times a team has crossed the threshold.
Like the revenue-sharing funds, luxury tax proceeds are also used to help poorer teams. The tax burden will be borne largely by the New York Yankees, at least in the near term. An additional $72 million per year, taken largely from the Major League Baseball central fund, will also be allocated to lower-revenue clubs.
"The primary determinant on salaries will remain the economy," said Gene Orza, general associate counsel for the union.
The minimum salary for players was boosted 50 percent, to $300,000 per year, a huge boon for the large group of young players making the minimum.
"This deal gives us a chance to bring the game some stability it hasn't had in some time and deserves," Mr. Fehr said.
The agreement generated an instant and heavy sigh of relief at the many regional and national TV networks and corporations that collectively invest hundreds of millions of dollars annually in Major League Baseball.
"We're delighted both sides were able to make an agreement," said Lou D'Ermilio, spokesman for Fox Sports. The network is baseball's primary TV partner, investing $2.5 billion in the game over six years. "Hopefully, the negative feelings among the fans seen during this process will not continue during the rest of the season and on into the postseason."
Two questions about the deal, however, remain: Will it soothe the fan vitriol and boost the lagging attendance that were fueled by months of tense and often fruitless negotiations? And will the deal truly provide competitive and economic balance to baseball, something Mr. Selig has doggedly pursued and discussed?
The games yesterday did produce a positive reaction from fans, but the true measure only will be known over time.
The economic effects of the deal also won't be fully known until at least late next year. But compared with previous labor negotiations, the deal agreed to yesterday shows a much more moderate bent. It included substantial concessions by both sides and harkened to a progressive negotiating strategy advocated by Commissioner Fay Vincent 10 years ago a strategy that cost him his job.
"This deal is the quintessential compromise," said Dennis Howard of the Warsaw Sports Marketing Center at the University of Oregon. "The effects will be modest, targeted and most meaningful to the teams that make good payroll and roster decisions, as it should be, really. The best and most dramatic economic news in this is that they're still playing."

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide