That S word returns to baseball

That S word
returns to baseball

Incensed over contraction, players talk of a strike

By Carl Bialik

   Four one-run games. Three last-at-bat, game-winning hits. Two ace pitchers for the ages. One classic World Series.
    Things could not have looked better for Major League Baseball after the Arizona Diamondbacks ended the New York Yankees’ dynasty in thrilling fashion on Nov. 4, capping a postseason that saw a substantial TV ratings rise.
    America was again in love with baseball.
    Alas, it was not to last.
    Just two days later baseball owners again displayed their knack for stopping good buzz in its tracks by voting 28-2 to "contract"–euphemism for eliminate–two teams.
    Only bad buzz has followed.
    The damage has not been just to baseball's image. The contraction effort has mightily provoked the players' union at a particularly inopportune time, amid negotiations over a new collective bargaining agreement.
    Once again, there's talk of a baseball strike.
    In the view of analysts, nothing could be worse for the sport. A season-ending players’ strike in 1994 so alienated fans that many never returned, and its effects are still being felt seven years later.
    Another strike would be even more devastating, says Tom McGovern, director of sports marketing at OMD-USA.
    "Certainly any ill will to the game from fans would result in it taking longer to recoup fans than it took after 1994," McGovern says.
    Few analysts and baseball economists think it likely that the owners will be able to contract before the upcoming season; after the owners’ vote, too many obstacles cropped up.
    Union officials, who abhor the possibility of the loss of two teams’ roster spots, have vowed to fight contraction.
    Key to the entire controversy is the overall economic health of major league baseball, and as one would expect, it's a battle of numbers as well as words.
    The owners contend the endangered teams are on the chopping block because they lack the fan support needed to sustain them economically.
    The four teams facing contraction--Minnesota, Montreal, Tampa Bay, and Florida--appeared on Fox’s Game of the Week broadcast fewer than 10 times since Fox started broadcasting MLB games in 1996.
    Baseball Commissioner Bud Selig has claimed that baseball lost $500 million last year, with 25 teams in the red.
    But Smith College economist Andrew Zimbalist thinks the game is healthier economically than Selig suggests.
    Zimbalist is the author of a number of books on the economics of sports, including "Baseball and Billions: A Probing Look Inside the Business of Our National Pastime."
    "The way they do their accounting, the costs are inflated and the revenues are depressed," Zimbalist says.
    "If somebody took a close look at the books, one would see that this is an industry that has a very favorable economic future. Franchise values are going up, and many previous owners want to get back into the industry."
    Richard Levin, executive vice president of MLB, bristles at Zimbalist’s comments about the league’s accounting. He says Zimbalist hasn’t looked at the MLB’s books in 10 years.
    "Our books have been audited up to three times by various national accounting firms," Levin says. "All the data is given to the union up to seven times per year. If they have questions about it, they can conduct their own audit. They have never chosen to do so."
    Selig will release the league’s latest financial data tomorrow at a House Judiciary Committee hearing. The committee will hear arguments on revoking the league’s antitrust exemption.
     Zimbalist thinks contraction is a power play by the MLB.
     "Part of it is that the owners are trying to assert some muscle viz-a-viz the players and viz-a-viz the cities, to improve their bargaining leverage in both places."
    But Levin says it is simply part of an effort to attain greater competitive balance.
    Analysts point to the NFL as the paragon of sports leagues, with its revenue sharing and salary cap creating competitive parity that is the envy of the MLB.
    Levin says the MLB has difficulty emulating the NFL’s model because most TV revenue is local.
    However, he says the league needs more revenue sharing and is pursuing that goal in the labor talks.
    Don Hinchey, director of creative services at The Bonham Group, a sports-consulting firm, thinks all the talk about contraction can, paradoxically, help baseball.
    "Contraction is creating a great deal of interest in baseball," he says. "People are talking about baseball well after the close of the season, and that’s not all bad."
    Still, Hinchey recognizes the dangerous implications of the talk.
     "Some people suggest Major League Baseball is in a crisis right now," he says. "The players and owners have to decide, are we going to come together or are we going to stand apart?"
    Levin remains hopeful that baseball will avoid a work stoppage.
    "I don’t think there will be a strike," he says. "The commissioner has made it clear that thoughts of a lockout are not even on the drawing board. The last strike was devastating. We certainly wouldn’t want to go through that again."

-Carl Bialik is a New York writer and a frequent contributor to Media Life.

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