The new labor deal needs work

Sporting News, The, Sept 9, 2002 by Ken Rosenthal

The new labor agreement doesn't assure competitive balance. It doesn't offer the "myriad" solutions promised by commissioner Bud Selig. It doesn't even come close.

In the view of one club executive, MLB needed to build a house to protect itself from a threatening storm but merely constructed a framework with no roof, no walls and, ultimately, no protection from the wind or rain. Oh, the rafters are up, with increased revenue sharing forming one girder, the luxury tax another, the worldwide amateur draft a potential third. But if competitive balance were the owners' true goal, they could have done much more.

Using the low-revenue Marlins as an example, there are three concepts that should have been embraced and three that still can be.

Missed opportunities

Setting a minimum payroll. It's outrageous that cost-cutting owners such as the Marlins' Jeffrey Loria won't be obligated to reinvest their revenue-sharing money in their teams. The Marlins opened this season ranked 25th in the majors with a $42 million payroll. A phased-in minimum starting at $45 million would have been one solution.

Then again, a minimum payroll might have been perhaps too simplistic; a minimum baseball-operations expense would have been better. That way, Loria could have chosen to spend on player development or even front-office talent if not on his major league roster.

The union opposed a minimum payroll to stay consistent with its flee-market principles, contending that dubs should be allowed to increase or decrease spending without restraint. Of course, the union does not oppose a minimum salary. The owners, meanwhile, made a half-hearted minimum-payroll proposal; heaven forbid anyone should tell them how to run their dubs. Adopting a competitive-balance draft. Will someone explain why this idea was abandoned? Each of the eight highest-revenue teams could have protected, say, 35 players. Each of the eight lowest-revenue dubs could have chosen one unprotected player, with no team allowed to lose more than one.

The Marlins couldn't have plucked an Alfonso Soriano from the Yankees, but maybe they would have ended up with a promising player such as Class AAA outfielder Juan Rivera.

Redistributing revenue fairly. The Brewers play in a new ballpark, but they will receive as much from the sharing of net local revenue as the Marlins, who desperately need a new facility.

Evidently, Selig and the owners were more interested in raising the franchise values of middle-revenue teams than in giving teams such as the Marlins the best possible chance of retaining--rather than trading--players like Cliff Floyd.

Remaining opportunities

Rolocating franchises. Forget the elimination of teams. Think of how much healthier the sport would be if the Marlins or another financially strapped club moved to the New York metropolitan area. A third team in New York would reduce the spending power of the Mets and Yankees more effectively than revenue sharing.

The New York metropolitan area generated $836 billion in personal income in 2000, according to Business Week Thus, each New York team has an economic base of $418 billion. The Orioles are next at $284 billion. Dividing the New York market three ways would leave each club with a base of $279 billion.

Reviving the balanced schedule. The Devil Rays field the lowest payroll in the majors yet play nearly one-fourth of their games against the Yankees and Red Sox, who rank first and second, respectively. The Marlins face a similar predicament, playing the Braves and Mets a disproportionate number of times.

The Mets are proof that high payrolls don't always translate to success, but why should the Marlins be at a disadvantage compared with the Royals and Tigers, who play in the A.L. Central, a division that--like the N.L. Central--lacks a free-spending powerhouse?

The unbalanced schedule enhances division rivalries, and realignment by revenue would be going too far. But a return to the balanced schedule at least would enable the Marlins to face the Brewers as often as the Braves.

Fixing the draft. The players and owners still need to negotiate final details, but the initial set of new rules is encouraging. A cap on amateur bonuses could be coming. The union opposes all caps, but it no longer will have a say in the draft now that the major league player component-free-agent draft-pick compensation--will be eliminated.

The Marlins, who gave pitcher Josh Beckett a club-record $3.625 million bonus in 1999, could benefit from a cap, redirecting their savings toward major league salaries.

Another positive change is that if a team fails to sign its first-round pick, it will receive a corresponding pick in the first round of the next year's draft. A lost second-rounder will yield a sandwich pick between the second and third rounds the following year.

Thus, when the Phillies failed to sign J.D. Drew, the second overall pick in 1997, they would have received the third overall choice in '98 in addition to their first-round selection.

The final agreement must allow for the trading of draft picks, giving low-revenue teams the flexibility to deal top choices for players or additional choices. It also should include enough rounds to neutralize the advantage of high-revenue teams that spend heavily on international scouting.