Expos on the move?
Ronald Blum/Associated Press
Saturday, July 15th, 2000
The panel recommended that baseball relocate franchises "when necessary to address the competitive issues facing the game." No specific teams were mentioned, although the Expos fit the bill.
Baseball has not moved a team since the Washington Senators became the Texas Rangers after the 1971 season, but the Expos once again appear in danger of leaving Montreal.
"If an area doesn't want to support a team, that answers itself," former Federal Reserve board chairman Paul Volcker said.
"Clubs that have little likelihood of securing a new ball park or other revenue-enhancing activities should have the opportunity to relocate," former Senate Majority Leader George Mitchell said.
For now, the committee opposed eliminating teams - an idea being discussed by owners.
"We would not look to a contraction except as a last resort," Volcker said. "I don't think that the industry should exclude it."
The panel also recommended that players born outside the United States be included in the amateur draft and that there be an annual "competitive- balance draft."
To increase competitive balance, the committee yesterday urged baseball to impose a 50-per-cent luxury tax on payrolls above $84 million; proposed sharing 40 to 50 per cent of local revenues after ball-park expenses; and recommended that new national broadcasting, licensing and Internet revenue be distributed unequally to assist low-revenue clubs, provided that they meet a minimum payroll of $40 million.
The New York Yankees, with a payroll of about $115 million, would have to pay a tax of about $15 million this year under the committee's proposed formula. Minnesota has the lowest payroll, about $20 million.
"There is no hard cap. Obviously, that is good," union head Donald Fehr said. "Hopefully, that issue is behind us. As you know . . . you can have a series of devices that amount to a cap."
In addition, the panel said baseball should expand its domestic and international promotion of the sport.
"We do not pretend to believe these changes will be easy or universally popular," said Mitchell, one of the panelists. "We do believe them to be a solution to the alarming disparities between baseball's haves and have-nots. We offer them to the commissioner, the ownership of Major League Baseball, the players and to the fans of the game."
Also on the panel were Yale president Richard Levin and political commentator George Will.
No changes are possible until after baseball's current labour agreement expires, probably after the 2001 season.
Commissioner Bud Selig, speaking after the report was released, said it confirms the competitive disparity.
"I told the clubs today we're done making believe it doesn't exist," he said.
Baseball had a luxury tax during the 1997-99 seasons, but it applied only to the top five teams by payroll at a 34- to 35-per-cent tax rate. Asked if that was a failure, Selig wouldn't give a direct answer, but said: "My 7-year-old granddaughter, Marissa, I think she's already made that judgment."
To support its contention that baseball has a growing revenue disparity, the committee made public dozens of economic charts, among them one that showed the Yankees generated the most revenue last season, $177.9 million, while the Expos generated the least, $48.8 million.
In 1995, the first year after the strike that wiped out the World Series, the Yankees led baseball with $97.7 million in revenue, while the Expos had the least, $27.6 million.
According to the report, only the Yankees ($64.5 million), Cleveland ($45.9 million) and Colorado ($12.4 million) generated an operating profit from 1995-99.
San Francisco had the largest operating loss from 1995-99 ($97 million). Toronto lost $87.6 million and Anaheim lost $83.3 million.
As an industry, baseball had an operating loss of $212 million last year on revenue of $2.79 billion.
Owners also approved an unbalanced 2001 schedule, putting off realignment until 2002 at the earliest. Teams will play, for the most part, 18-19 games against opponents in their own division, up from 12-13 last year.
"We need some franchise realignment, there is no question about that," Selig said. "One could debate how extensive that should be."
The Texas Rangers and Houston Astros will meet in inter-league play for the first time next year, but other than that, the inter-league lineup could remain the same: AL East vs. NL East, AL Central vs. NL Central and AL West vs. NL West.
Baseball is trying to develop a schedule in which inter-league opponents rotate, except for natural rivalries like the Mets-Yankees, Cubs-White Sox and Expos-Blue Jays. Selig said a decision on whether inter-league play will rotate next year will be made in about two weeks.
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