- The Washington Times - Saturday, July 13, 2002

One day major league baseball teams are on the verge of bankruptcy. The next day they are not.

What did these owners of these financially distressed teams do, find a loan shark?

"There are a number of 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."

Short term. That's the operative term here. Baseball owners have short-term memories, and that's why they keep making the same mistakes over and over again.

They have short-term memories but long-term lies. This whole scenario by Cadillac Bud Selig of teams losing big amounts of money and being on the verge of bankruptcy should sound familiar. He tried to paint a similar portrait of disaster nearly eight years ago, testifying before Congress, when he told lawmakers, "There are many franchises today, and again I could begin to articulate them one by one, who have deep trouble. We have a remarkable amount of teams losing money."

Let me articulate a few things.

Four months after Cadillac Bud predicted disaster, groups in Phoenix and Tampa paid franchise fees of $130million to join this organization of paupers.

Four years later, the Texas Rangers were sold for $250million and the Los Angeles Dodgers for $311million.

Two years after that the Cleveland Indians were sold for $323million.

The Boston Red Sox, in a deal that included Fenway Park and the regional sports network, were bought earlier this year for about $700million, with a half dozen bidders vying to buy the franchise which had risen in value from the estimated $90 million figure placed on the franchise in 1994, the same year Bud predicted disaster.

This time is different, though. This time we are supposed to believe. After all, Cadillac Bud came to Congress recently with reams of audited documents that detailed baseball's dismal financial status. Of course, this came on the day that the Enron scandal broke, so no one was particularly eager to embrace audited statements as gospel.

Maybe that's why Paul Beeston was banished from the flock. Beeston, the former vice president of the Toronto Blue Jays, had been tapped by Cadillac Bud to be baseball's chief operating officer. It was seen as a positive step because, unlike Cadillac Bud and his showroom crew, Beeston had credibility with the players union. He had credibility because he made statements like this over his career in Toronto: "Anyone who quotes profits of a baseball club is missing the point. Under generally accepted accounting principles, I can turn a $4million profit into a $2million loss, and I could get every national accounting firm to agree with me."

That's a blasphemous attitude in the showroom of Cadillac Bud. Beeston resigned last year. That's one truth worth paying attention to.

As far as teams being on the verge of bankruptcy, exactly what would that mean? If the Tampa Bay Devil Rays go belly up, do they file for Chapter 11 and reorganize? Can they? If not, the franchise does not just simply disappear. There will be creditors to pay, and the franchise is an asset. Does it go up for auction and, if so, can it be moved? One might presume that the lease that has the franchise anchored into Tropicana Field for the next 27 years would become useless if the team was bankrupt.

There has been speculation that the Devil Rays and Arizona Diamondbacks, along with the Detroit Tigers and Cleveland Indians, are the teams supposedly on the verge of financial ruin, if you believe any of this.

But if the Devil Rays and Diamondbacks are in danger of collapse, it's not because of the players union. The owners have no one to blame but themselves. First, they raised the expansion fee that both teams had to pay from the $95million Colorado and Florida paid in 1991 to $130million each in 1994. Then they would not allow either team to collect from baseball's general fund for several years, which cost each franchise another $25million.

That means the cost for those two franchises just to start operations was $155million. The owners squeezed every penny they could out of Arizona's and Tampa Bay's owners before the teams ever took the field, and now they claim these teams are in trouble because of escalating salaries?

Beware, Bill Collins and Fred Malek. Baseball owners are poised to do the same thing to you.

On Aug.1, arbitrator Shyam Das is scheduled to release his decision on the union's grievance against the owners unilaterally deciding to contract with approval of the union.

If Das rules in favor of the union, that means contraction is dead, which in turn pretty much makes the Montreal Expos a franchise to be put up for sale to the highest bidder even if there is a strike.

The last time the owners expanded and collected their $260million in expansion fees there was a strike. There is no reason to believe particularly given the deals the Expos are making to become even a more attractive product that the owners aren't looking at the sale of the Expos as their hedge this time to cover them in a work stoppage and probably have visions of collecting far more than $260million.

Of course, the owners will do this while crying the blues about financial ruin. And if the Washington franchise is on the verge of bankruptcy five years from now, maybe baseball can turn the Washington owners on to that loan shark that keeps bailing baseball teams out.


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