MLB: We Lost $519M Last Year
Dec. 6, 2001 -- Baseball had an operating loss of $232 million this year,including a major league-leading $52.9 million by the Toronto BlueJays, according to a report that will be given to Congress today.
While the Arizona Diamondbacks were a success on the field,winning the World Series in just their fourth season, they were abottom-line bust, with an operating loss of $32.2 million,according to the report, obtained Wednesday night by The AssociatedPress.
That was the third-highest operating loss in baseball, trailingonly Toronto and Los Angeles ($45.3 million).
The report also showed an additional loss for all teams of $112 million ininterest costs, which includes borrowing to fund team's paymentsfor new ballparks.
An additional $174 million is added inamortization -- essentially depreciation of a portion of teams'asset value -- resulting in an overall loss of $519 million, thereport said. Baseball's operating loss came on record revenue of $3.5billion.
Baseball commissioner Bud Selig is to present the report, which includes unaudited, forecasted profit and loss statements for 2001 for all 30 teams, alongwith other financial breakdowns when he testifies today beforethe House Judiciary Committee in Washington.
Few Teams Profitable
Eleven of the 30 teams had operating profits before revenue sharing and only five teams were in the black, led by the New York Yankees at $40.9 million. Seattle wassecond at $34.3 million, followed by San Francisco at $19 millionand Milwaukee at $14.4 million.
After revenue sharing only the Chicago Cubs, Kansas City Royals, Brewers, Yankees and Mariners finished in the black.
According to documents obtained by USA Today, only the Yankees and Cleveland Indians operated profitably during the 1995-2001 period while baseball had operating losses of $1.38 billion. The Yankees, who were in the World Series five times during the period, had profits of $93.6 million. The Indians earned $39 million.
Legislation to eliminate baseball's 79-year-old antitrustexemption was introduced in the House and Senate following the voteby major league owners last month to eliminate two teams beforenext season.
While no teams were selected, the Montreal Expos and MinnesotaTwins are the likely candidates, and Minnesota's congressionaldelegation pushed for the hearing.
Montreal had an operating loss of $38.5 million, which was cutto $10 million after revenue sharing -- money redistributed frombaseball's high-revenue teams to low-revenue clubs. Minnesota hadan $18.5 million operating loss, which became a $536,000 operatingprofit after the revenue sharing money was redistributed.
The Yankees paid $26.5 million in revenue sharing, the most ofthe 30 teams, cutting their operating profit to $14.3 million onrevenue of $242 million.
Strike Years Hurt Big
Baseball's operating loss, while high, was not a record. In1994, when players struck in August and the World Series wascanceled for the first time in 90 years, the sport had an operatingloss of $363.7 million, according to records previously obtained bythe AP (and provided by MLB).
In 1995, the first year after the strike, the industry lost$326.3 million on operations, a figure cut to $197 million thefollowing year as business began returning to normal.
Congress, which historically has deferred to baseball owners, isnot likely to pass a baseball antitrust bill anytime soon, andPresident Bush -- the former controlling owner of the Texas Rangers-- hasn't expressed an opinion.
In the meantime, the introduction of the legislation set thestage for another trip to Capitol Hill by Selig, who has clashedwith congressmen at several hearings in recent years.
Selig didn't seem to help matters Tuesday, when he notified Rep. John Conyers (D-Mich.) that baseball would not provide team financial data before the meeting today, The Washington Post reported.
Conyers, the ranking minority member of the House Judiciary Committee and sponsor of the House bill, hoped the committee could get a head start on the numbers. "We had hoped that he would provide us with the financial statements so we could scrutinize them in advance, so we could at least have an honest discussion about them," Conyers told The Post.
Union: It Will Be Carnage
The Players' Association is often dubious of claims of losses,and union head Donald Fehr is expected to respond to Selig at anews conference today in Irving, Texas, where the players'executive board is meeting. While the figures haven't been audited,baseball's early accounting has usually been within 5 percent ofthe final totals.
Fehr also said Wednesday that contraction has to be settled before other issues, such as revenuesharing, player contracts and scheduling can be properly addressed. He alsopredicted problems with free agency.
"It will be carnage all over," Fehr said.
"We can argue over the level of detail of the information,"Sandy Alderson, baseball's executive vice president of operations,said after the AP obtained the report. "Is it a fairrepresentation of the economic state of the game? I think theanswer to that is clearly yes."
Owners want major concessions from the players' union, as theyhave had in each negotiation since the 1976 labor contract thatcreated the current system of free agency and salary arbitration.
Selig: Twins Need New Ballpark
Selig claims the Twins need a new ballpark to survive, but theMinnesota Legislature has failed to support public financing.
Minnesota Gov. Jesse Ventura, who has opposed a publicly fundedballpark but has been more supportive in recent weeks, also isscheduled to testify. The other witnesses are Twins president JerryBell and Steve Fehr, the brother of the union leader and a playeragent.
Since the 1922 U.S. Supreme Court decision creating theantitrust exemption, Congress has altered it just once. In 1998,lawmakers approved a bill that President Clinton signed that madelabor relations of major league players subject to antitrust laws.
But the change meant little because the Supreme Court ruled twoyears earlier that unionized employees may not file antitrustsuits.
The Associated Press contributed to this report.