Baseball Contraction Unlikely for 2002

N E W   Y O R K, Dec. 6, 2001 -- To paraphrase Yogi Berra, it's getting late early for the baseball owners' contraction plans.

Despite Commissioner Bud Selig's announcement on Nov. 6 — just two days after the Arizona Diamondbacks beat the New York Yankees in a memorable World Series — that baseball's owners were planning to cut back from 30 major-league teams to 28, several roadblocks are preventing a full-bore contraction effort from taking place this off-season.

A Minnesota lawsuit has already thrown the owners' contraction timetable out of whack, while on Wednesday an arbitrator began examining whether the owners can eliminate franchises without agreement from the players' union. Legal challenges from affected states and minor-league teams are possible, too.

And while the owners say contraction is necessary to restore the game's economic health — Selig claims major-league baseball lost half a billion dollars in 2001 — unhappy members of Congress are saying they would consider overturning baseball's antitrust exemption to prevent teams from being eliminated.

Rep. John Conyers, D-Mich., has dismissed Selig's financial claims, called the contraction plan "ill-considered," and threatened to act on a bill that would "ensure that the full weight of the antitrust laws applies to this anti-competitive decision." The House Judiciary Committee is holding hearings on the subject today.

Then too, with the owners having not yet even picked which teams they think should be eliminated, the difficulty of working out logistical matters like scheduling strongly indicates that baseball will enter the 2002 season with its full complement of teams.

"By introducing this on Nov. 6, without having talked to the players at all … the notion that these guys actually thought they'd be able to contract really stretches the imagination," says Andrew Zimbalist, a professor of economics at Smith College in Northampton, Mass., and the author of Baseball and Billions, an analysis of the game's finances.

Show Them the Money

But as Yogi also said, "It ain't over 'til it's over." Having introduced the idea of contraction this year, the owners might wait until the 2002 season is over before returning to it.

If there is a 2002 season, that is. Beyond contraction, the owners and players must hammer out a new collective bargaining agreement, since the old one expired at the end of the season. Many observers see the owners' contraction plan, like today's hearings, as a warning shot in advance of the contract talks.

Indeed, the highlight of the House hearings may well be Selig's presentation of some of baseball's financial numbers. Baseball's bottom line has long been hazier than the game's seemingly floating strike zone, but last week, Selig said he would show Congress the major leagues suffered heavy losses in 2001 despite record revenues of $3.5 billion: "Everyone will be able to see that [the 30 teams] lost more than $500 million this year. In fact, 25 of the 30 clubs lost money."

"You convince Congress that baseball is in dire financial straits, and then you get busy with the players," says economist Rodney Fort of Washington State University of the owners' strategy.

Those kinds of hardship claims have been hotly disputed by baseball's players union, and almost uniformly dismissed by sports economists. Independent estimates of baseball's bottom line vary, but a Forbes magazine study claims 20 of the 30 teams turned a profit during the 2000 season, with the league making a collective $130 million.

And while experts are interested to see what Selig presents to Congress, no one expects the numbers to be a complete look at the sport's ledger.

"This might be the worst year in baseball history, for all I know," says Fort. "Nobody can know that unless they open up all the books and show us."

Zimbalist notes the owners' own numbers show revenues growing 250 percent since 1995, which he says would be regarded as spectacular growth in almost any industry: "3.5 billion relative to 1.4 billion is a huge increase over a six-year period."

Wealth Gap Is Growing

But even those who are highly skeptical of the owners' financial claims acknowledge there has been a growing disparity in the revenue of baseball's wealthy teams and their poorer cousins.

"The primary difficulty is not in the aggregate profit or loss but the severe difficulties faced by some teams," says Gary Roberts, a professor at Tulane University's law school in New Orleans and a founder of The Sports Lawyers Journal.

According to Zimbalist's research, the income gap between the richest and least-wealthy team was about $30 million in 1989, but had grown to $164 million by 1999.

"The owners, if they really want to solve the problem, have to come up with a way of giving more resources to the have-nots," says economist Charles Link of the University of Delaware.

Many analysts say that means more extensive sharing by the owners of local television revenues, which vary greatly from market to market. But the owners' position is that contraction is the best and simplest way of resolving those financial disparities.

While they approved the contraction plan without even specifying the franchises involved, the Minnesota Twins and Montreal Expos, two teams lower down in the revenue ranks, are the teams most frequently mentioned as candidates for the dustbin of sports history.

Baseball insiders also mention the Florida Marlins, Tampa Bay Devil Rays and even the Oakland Athletics as contraction possibilities.

Looking for New Stadiums?

But if a more competitive league is the aim, argues Fort, the contraction plan currently being floated wouldn't solve the problem.

"They claim it will improve competitive balance, but they're not killing the worst teams," he says. The Twins led the American League Central division for much of last season, despite a league-low $25 million payroll that only equaled the salary of the game's highest-paid player, Texas' Alex Rodriguez. In the National League, Florida and Montreal had better records than Cincinnati and Pittsburgh.

Rather, Fort thinks the contraction plan is a way of getting public financing for new ballparks for the Twins and Marlins: "It's plain and simple, a strategy stance against these two last holdouts in terms of building a stadium … It's really just breast-beating to try to scare these two state and local governments into giving them new stadiums."

While the Minnesota Legislature ponders a new stadium plan, the local authority running Minneapolis' Metrodome has obtained an injunction ordering the Twins to play in 2002 — the suit currently delaying the owners' contraction plans. For their part, the Expos have signed a new deal for Olympic Stadium, their home park, just in case they need it again in April.

Until then — and not for the first time — the important action in baseball will take place in Congress, state legislatures, courts and boardrooms.