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Commentary > SportsBiz
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Owners still taking swings at game
Fans can be pleased a baseball strike was averted, but don't expect deal to heal game's problems.
August 30, 2002: 6:53 PM EDT
A weekly column by Chris Isidore, CNN/Money Staff Writer

NEW YORK (CNN/Money) - Don't expect Friday's labor agreement in baseball to bring in the period of labor peace and partnership that the game needs to repair its support with fans.

Ownership throughout this process has shown little hesitancy to bash player salaries -- and by extension the product they need to sell to fans -- as the game's most pressing problem.

Bud Selig and other small-revenue owners' complaints about player salaries are one of the things hurting the game.  
Bud Selig and other small-revenue owners' complaints about player salaries are one of the things hurting the game.

And by continuing to focus on the grossly overstated problem of the game's lack of "competitive balance," management continues to feed the popular misconception that the labor structure of the game itself, not bad player personnel moves by management, is the reason that some franchises continue to disappoint fans year after year. They also feed the myth that players are behind high ticket and concession prices.

No other business does as much to run down its product in the eyes of its customers as does baseball. You can be sure that movie studio bosses can't feel any better about the eight-figure checks they write to their stars to perform in sometimes money-losing efforts. But the studios' chiefs are smart enough to understand that their labor is their product, and they don't do themselves any favor by whining about the difficulties of making money when competing for consumers' entertainment dollars.

The complaints of Baseball Commissioner Bud Selig and small revenue team owners about how difficult it is for them to compete with the New York Yankees would be the equivalent of an independent film producer announcing at his movie's opening, "This movie has no chance of entertaining an audience, but we didn't have a choice -- we couldn't afford to get Brad Pitt or Julia Roberts or one of the big name stars that movie goers demand. If you don't have a big-name star, obviously you can't make a good movie."

Yanks may yet get lift, not limit, from contract

It's arguable that the legions of haters of the deepest pocket team -- the New York Yankees -- will live to loathe this contract more than any that came before. The Yankees, with their greater revenue streams, may be willing to continue to spend whatever it takes to get the best players, luxury tax be damned. Meanwhile this contract is more likely to restrict some of the other successful franchises, like the Atlanta Braves or Boston Red Sox, from spending on players to compete with the Yanks.

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The result could produce more parades down Broadway in Manhattan, not less. At the very least, it will save money for the Yankees, who might not have as many competitors when they bid for some top players in the future.

Of course that assumes that a top payroll automatically equates to victory. The fact that two of the clubs above the $100 million payroll mark -- the New York Mets and Texas Rangers -- are mired in last place this year is just one of the major problems with that assumption.

However, even the Yankees have gone through down cycles in the past. Despite their deep pockets they will likely do so again as the current cast of championship players continues to age.

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Champion teams have cycles, just like a business cycle, where the engines that drove past gains finally run out of gas. Those cycles can be extended at times, but generally not abandoned altogether.

The thing that probably helped the competitive balance in the Major Leagues more than anything else the last two weeks wasn't anything that happened at the negotiating table -- it's something that occurred in the bullpen, when the Yankees put their star relief pitcher Mariano Rivera on the disabled list. Suddenly a key weapon the team has depended on in its run of championships is in question. And that had nothing to do with a change in the labor contract.

Contract will help more players than it hurts

It will be widely assumed that because owners "won" some of their long-sought restraints on salaries in this contract that the players definitely lose. That also would be wrong.

Union boss Don Fehr helped more of his members than he hurt by agreeing to the deal.  
Union boss Don Fehr helped more of his members than he hurt by agreeing to the deal.

Despite the restraint on top salaries likely to occur under this deal, the increase in minimum salary probably means the pact will benefit more players than it hurts.

This year the median salary -- the point at which half the players are paid more, and half are paid less -- actually fell, to $900,000 from $950,000 in 2001 -- even as the average pay rose to $2.38 million, lifted by a relatively few megacontracts. The decline in median pay is a sign that owners were filling out their roster with more of the less-expensive players.

Just over 30 percent of the players on opening day rosters were paid $300,000 or less, and they are certain to be helped by the rise in minimum pay to $300,000 from $200,000 last year.

Players just above the new minimum are also likely to get a corresponding boost -- another 10 percent of the league earns between $300,000 and $500,000 a year. Only 3 percent of opening day players earn $10 million a year or more.

The lower-paid player have been willing to support past labor deals that help the top-paid players due to their hope and belief they might some day move into those lofty heights themselves. But as the numbers show, few of those players will ever see an eight-figure contract. Many are better off with more money now.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.