MLB's Blue Ribbon Panel on Baseball Economics released the findings of its 18-month study on the financial state of the game on Friday and "delivered a series of sweeping suggestions ... that would severely curtail the wide disparity in spending between teams and usher in a far more socialist era for the sport," according to Eric Fisher of the WASHINGTON TIMES. The panel was led by Yale Univ. President Richard Levin, political commentator George Will, former U.S. Senator George Mitchell and former Federal Reserve Chair Paul Volcker. Fourteen team owners and the MLBPA were also "consulted, but the study was presented as an independent analysis." Among the panel's suggestions: SHARING: Teams should share between 40-50% of local revenues, with "much of that money" going to help the "weaker franchises." Teams currently share "only about" 20% of local revenues, and "only a fraction of that helps struggling clubs"; Create a 50% competitive balance tax on payrolls exceeding $84M. Under the current CBA, only the "five highest-spending teams typically paid at most" $4M per year in luxury tax; Encourage a minimum payroll of $40M; Encourage an expanded "central fund to distribute pooled money such as broadcast TV, Internet and licensing, and allow the commissioner to allocate funds unevenly, if needed"; Start a competitive draft in which the eight worst teams each year could select players not on any other team's 40-man roster; Change the draft to allow the inclusion of int'l players and the "elimination of free-agent compensation picks"; Keep "strategic" franchise relocation open as an option for teams (WASHINGTON TIMES, 7/15). SPOONFUL OF SUGAR? Mitchell said Friday, "We do not pretend to believe these changes will be easy or universally popular." In DC, Fisher wrote, "Owner reaction to the report was muted as most said they had not had enough time to fully digest the data and suggestions. But the report is expected to form the template of the owners' position during upcoming labor negotiations" (WASHINGTON TIMES, 7/15). In L.A., Ross Newhan wrote the committee "did not recommend a salary cap -- knowing perhaps it would never be approved by the players' union and would only ensure another work stoppage -- but [it] did propose a stiffer luxury tax on teams with high payrolls that the union may conclude is tantamount to a cap." MLB Commissioner Bud Selig said that he did not know if the "recommendations would form the basis of management's approach to the next" CBA negotiations, but "industry sources said it is reasonable to conclude that this is exactly where the owners are headed" (L.A. TIMES, 7/15). In DC, Thomas Heath reported on the findings in a front-page report under the header, "Baseball Urged To Let Teams Relocate." Selig: "I was struck when I read it for the first time at the power of it. This is a powerful report." Heath wrote the report "paints a picture of a league of 'haves and have nots.'" Committee member Mitchell: "Large and growing revenue and payroll disparities exist and are causing problems of chronic competitive imbalance" (WASHINGTON POST, 7/15). In Baltimore, Peter Schmuck wrote that the "immediate impact of the report figures to be negligible. ... But the conclusions of the committee reinforce the notion that baseball will attempt again to make dramatic changes in the way it does business, which could lead to another labor showdown" (SUN, 7/15). In K.C., Steve Rock: "None of the recommendations is binding, and no changes are possible until the current labor agreement expires, likely after the 2001 season" (K.C. STAR, 7/15). NEWSDAY's David Lennon wrote the solutions "seem almost impossible to implement, based on the suspicious relationships between owners, their teams and the [MLBPA]" (NEWSDAY, 7/15). In San Jose, Howard Bryant: "While none of the committee's conclusions were radical ... some baseball people were encouraged that dialogue has begun to address the game's economic problems" (MERCURY NEWS, 7/15). TOTAL LOSS: MLB "admitted its clubs had a collective" $1.4B in operating losses since the start of the '94-95 strike and are a collective $2.1B in debt. Only the Yankees, Indians and Rockies have been profitable since the strike (AP, 7/15). For more figures, see (#27). A VICTORY FOR THE MIDDLE CLASS? In N.Y., Murray Chass wrote that MLB's "latest economic study committee presented a plan ... that would seem to take from the rich and give not to the poor but to the middle class." The panel's plan would "treat the middle-level teams the same as those below them economically." One MLB lawyer said that "at least some baseball officials have wanted to benefit middle-level clubs at the expense of the poorest clubs and at the same time take a huge chunk of money from the wealthiest teams." While most MLB owners chose not to comment on the report, Chass quotes "midlevel" Astros Owner Drayton McLane as saying he was "encouraged very much" by the report. Chass: "A person who attended the meeting said some representatives of low-level teams grumbled about the suggesting of a minimum payroll. But that grumbling does not figure to be any louder than the behind-the-scenes outrage certain to be expressed" by Yankees Owner George Steinbrenner (N.Y. TIMES, 7/15). Twins Owner Carl Pohlad called the overall report the "best thing that's happened to baseball in 50 years." Pohlad: "After this report, I feel more optimistic than in a while. I don't know what Yankee Owner George Steinbrenner's reaction will be" (Minneapolis STAR TRIBUNE, 7/16).
