- The Washington Times - Thursday, November 27, 2003

This is not what Bud Selig had in mind when he said baseball needed to gain control of spiraling player salaries and restore “hope and faith” to small-revenue clubs.

In just the last month, the commissioner of Major League Baseball has seen:

• The Boston Red Sox place star outfielder Manny Ramirez on irrevocable waivers in a blatant attempt to shed his $20million-per-year salary — and find no team willing to pick up the tab.

• The Texas Rangers seek a new home for reigning American League MVP Alex Rodriguez, who still is owed $179million of his record-shattering contract and must agree to waive his no-trade clause.

• The Milwaukee Brewers, playing in 3-year-old Miller Park, cut their payroll back to the minuscule levels the club maintained when the team played at County Stadium.

• Informal industry estimates that the average team is trying to pare nearly $5million from its payroll this winter.

After one full season under a new labor deal, baseball management has made significant progress in reaching two of its key goals: competitive parity and salary restraint. Seventeen clubs were competing late in the season for a berth in the playoffs, a run highlighted by the Florida Marlins’ surprise World Series title.

The average player salary of $2.56million on Opening Day in 2003 marked a 7.2 percent increase from Opening Day in 2002, a far cry from the double-digit percentage increases seen from 1997 to 2001. The latest increase was predicated on contracted raises from previous signings, as salaries for free agents last winter fell by more than 15 percent from the year before.

But beyond those positive numbers, however, exists a more unsettled reality.

The current fiscal state of baseball still is one of recession and cutbacks — despite a steadily growing level of revenue sharing, a scintillating postseason, rising corporate support, an improving national economy and burgeoning revenues from Internet, licensing and international operations.

Baseball spent wildly for more than five years before the new labor deal. Has it now rushed too quickly into spendthrift mode?

Many prominent figures in the players community think so.

“This deal was largely about improving major league-level parity. The players found it difficult to say parity is not a good thing,” said Scott Boras, a California-based agent who represents several stars, including Rodriguez and free agent pitcher Kevin Millwood. “But there’s one key problem: The revenue sharing funds are not being used universally to retain players and improve major league rosters. In some cases, it’s just simple profit taking. The focus is not on parity.”

MLB and team executives say the cutbacks are warranted. The new labor deal called for more than $250million in annual revenue sharing. However, baseball continues to grapple with more than $3billion in industry debt.

MLB executives recently refinanced $1.5billion of that debt, but servicing the loans continues to leave many clubs weak — particularly after average attendance this year fell for the third time in five seasons.

“It’s still too early to make judgments on this,” Selig said. “But as I’ve said many times, last Aug.30 was a very historic day for us. We’ve begun to deal with our economic problems, and the market is determining what people are paid. Teams are paying what they can afford.”

Don Fehr, executive director of the players’ association, agreed that it is too soon to evaluate the full merits of the labor deal. But union sources said players will be keeping a particularly close eye on signings over the next month or so.

While three years, and possibly a fourth, remain on the current deal, several truths already are apparent:

• The luxury tax, a particularly contentious topic, is largely a non-issue. The New York Yankees are the only club that paid the tax in 2003, exceeding the payroll threshold of $117million. They likely will be the only team to cross the threshold ($120.5million) next year and in the foreseeable future. The New York Mets are the only other club that is even close.

• Postseason performance improved markedly for teams whose payrolls rank in the lower half of baseball. Such low-spending clubs won only five playoff game between 1995 and 2001, but they registered 31 more postseason victories in the last two seasons.

• The big spenders remain big spenders. In 1999, the top eight payrolls belonged to the Yankees, Rangers, Atlanta Braves, Baltimore Orioles, Los Angeles Dodgers, Boston Red Sox, Cleveland Indians and the Mets. Four years later, only the Orioles and Indians have dropped from that list. And this winter, the Yankees and Red Sox again are dominating the Hot Stove rumor circuit.

• None of the major recipients of revenue sharing is preparing a significant increase in payroll. Teams such as the Pittsburgh Pirates, Brewers, Kansas City Royals and Minnesota Twins are seeking to hold the line on salaries or to cut back, just like their bigger-spending brethren. That leaves the usual wide gap between the haves and have-nots.

This last fact enrages agents, who argue the revenue-sharing money should come with requirements to spend on major-league level talent. According to MLB rules, the money must be spent to improve on-field performance. But the full definition of that is murky at best.

Several teams already have admitted to using the funds for other purposes, such as paying down debt or improving a farm system. Selig insists all revenue-sharing funds have been accounted for, but many remain skeptical.

“The redistribution of wealth is definitely happening. That much we can all agree on,” said Rodney Fort, a Washington State University economist who writes extensively about pro sports. “What really isn’t happening to date is the teams on the receiving end of the [revenue] sharing money beefing up on their talent. There is certainly a bit of dampening effect on salaries happening.

“There’s plenty of things in the CBA to get a bit closer to that Bob Costas world where every team has a chance every year. But it’s physically impossible to get there in the truest sense.”


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