- The Washington Times - Friday, July 12, 2002

Major League Baseball executives yesterday backed off an assertion by commissioner Bud Selig that two teams might not stay solvent through the regular season.

On Wednesday, Selig told the Houston Chronicle and several other newspapers that one team might not make its payroll Monday and another might not be able to survive until October. Yesterday, however, Selig's top aide said the financial crisis had passed.

"There are teams that are continuing to work very hard to meet all of their expenses that come due," said Bob DuPuy, baseball's chief operating officer. "Whatever immediate issues there were with one or two clubs have been resolved in the short term."

Selig did not identify the two teams to which he referred, saying only that one of them "will surprise you."

A top official of a major league team, speaking on condition of anonymity, told the Associated Press yesterday that the Detroit Tigers and Tampa Bay Devil Rays had cash-flow problems earlier this year.

Another high-ranking baseball official said a club that he did not identify was having financial difficulty before the June15 payroll. The team received additional credit from its bank after baseball confirmed that it made a payment from its central fund to the club in July.

Baseball maintains a line of credit, backed by the sport's central fund, that enables each team to borrow up to $72million. The fund collects money from national broadcasting and licensing contracts.

Officials with the Devil Rays and Tigers denied any financial difficulties.

"As far as I know, as far as I'm concerned, it's not the Devil Rays," Tampa Bay general manager Chuck LaMar said. "All I know is, I'm not aware of any type of loan or bailout from major league baseball."

Tigers president Dave Dombrowski said his team would have enough cash to pay its players but declined to say if baseball provided any assurances to the club's bank.

"We don't get into our personal finances at all," Dombrowski said.

Selig's comments came on the eve of renewed negotiations with the players union talks scheduled for yesterday were pushed back to today and touched off a frenzy of backpedaling and speculation on baseball's state of disrepair.

"I'm done. Major league baseball's credit lines are at the maximum," Selig told the Chronicle. "We've done everything we can to help people by arranging credit lines. Frankly, at this point in time, we don't have that luxury anymore.

"If a club can't make it, I have to let 'em go. I'm a traditionalist, and I hate all that. It pains me to do it. I just don't have any more alternatives," he said.

John McHale Jr., Major League Baseball's vice president of administration, seemed to suggest that there was no immediate danger but that it could arise later in the season.

"Sometimes solutions to a problem quickly present themselves," he said. "But I expect that as the season progresses, we will have more teams with these kinds of [financial] issues."

McHale declined to be more specific.

Union head Donald Fehr seemed surprised by Selig's remarks.

"It was sort of an odd thing to see said publicly," Fehr said. "And, hopefully, it's an issue that's behind us at this point."

Baseball finances have been the subject of considerable debate for the past eight months. In December, Selig testified before Congress that the 30 clubs lost $519million and stand more than $3billion in debt.

The players union tacitly dismissed the claims but remains contractually barred from making specific comments on them.

Forbes Magazine, not a pro-labor publication, in March issued its own analysis of MLB finances and claimed the industry actually finished 2001 $74.2million in the black.

"There are some teams that are definitely losing money, most certainly Toronto, Tampa, Montreal. And the prospect of a work stoppage doesn't help either," said Michael Ozanian, Forbes senior editor. "But I doubt there's a team out there that isn't going to make it until the end of the season."

McHale strongly denied Selig's comments were posturing.

"I don't believe for a second that they have anything to do with our labor negotiations resuming," McHale said. "It was a moment of spontaneous candor. There are very real issues in front of us."

Regardless, Selig's comments marked yet another day in one of the ugliest weeks for baseball in recent times. On Monday, the players union agreed to begin formally canvassing players on their willingness to strike if need be later this season. Tuesday night's All-Star Game, intended to be a celebration of baseball, was halted by Selig after 11 innings and ended in an unsatisfying 7-7 tie, prompting a nationwide torrent of criticism. And rather than try to improve the public perception of baseball, MLB executives simply went deeper into bleakness by further discussing debt problems.

Selig met with MLB lenders Tuesday in Milwaukee before the All-Star Game and has often said as many as eight clubs could go under without substantial economic reform in baseball.

"Some owners think that number is conservative, but I'll stand by it," Selig said.

Baseball bankruptcies are not unheard of. Current Baltimore Orioles owner Peter Angelos purchased the club out of bankruptcy court in 1993, but the team never suspended operations.

This article is based in part on wire-service reports.


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