When the baseball labor negotiations resume tomorrow in Washington, DC, striking players "expect the same old salary cap with a new name" (Mike Shalin, BOSTON HERALD, 11/16). Owners will likely propose a new plan that will include a "luxury tax" to be imposed when a team exceeds a certain payroll. But "anyone deliriously optimistic" about the new plan "hasn't been paying attention to the negotiations in the month and a half hockey lockout. The NHL has a taxing problem, and baseball is about to get one." The MLBPA is unlikely to accept the proposal, believing it would work as a salary cap and "inhibit" teams from "spending the kind of money on salaries that would trigger such taxes." Red Sox CEO John Harrington, who heads up the owners' negotiating team, said "a tax concept can look like a salary cap, and any tax plan is meant to put some controls on labor cost" (Murray Chass, N.Y. TIMES, 11/16). MLBPA General Counsel Gene Orza "warned against optimism," saying there are "tax programs that are worse than a salary cap and tax programs that are better" (Tim Harper, TORONTO STAR, 11/16). Braves Player Rep Tom Glavine said a luxury tax "would be nothing to get excited about," adding "it would be another word for a salary cap" (I.J. Rosenberg, ATLANTA CONSTITUTION, 11/16). LET'S GET IT DONE: "Owners are working with a renewed vigor, afraid that if they don't move quickly, they will lose next season as well." One owner, on the lack of income: "We gambled the fans would love us come hell or high water and it looks like we are losing that bet" (Sherman & Miner, N.Y. POST, 11/16). Braves President Stan Kasten said he plans to be in DC "for an extended time": "I did not even attempt to make a return reservation" (I.J. Rosenberg, ATLANTA CONSTITUTION, 11/16). PAYROLL FIGURES RELEASED: Team payroll figures were released by MLB's Player Relations Committee. The total amount paid to players would have gone up less than 3% if a full season had been played. The Yankees had the highest payroll in the league at $47,512,342, but only paid out around $34M because of the strike. The Padres had the lowest league payroll, paying out only $9.8M on over $13M of salaries (I.J. Rosenberg, ATLANTA CONSTITUTION, 11/16).
Leagues Governing Bodies
"It becomes more likely by the hour that there will be no new collective bargaining agreement and the 1994-95 season will not happen," writes Kevin Paul Dupont in this morning's BOSTON GLOBE. According to a league source, the 26 GM's met yesterday and "reconfirmed their stance" in favor of player salary restraints. NHL Commissioner Gary Bettman and NHLPA Exec Dir Bob Goodenow will meet again tomorrow or Friday (BOSTON GLOBE, 11/16). While there was talk that the owners' counterproposal, which Bettman is expected to offer to the union today, will "slash" the NHL's luxury tax in half -- from 122% to 60% -- one union source maintains that "if the owners insist on a salary cap there won't be a season" (Dave Fuller, TORONTO SUN, 11/16). ONLY 30 SHOPPING DAYS UNTIL DEADLINE: The NHL is discussing the idea of imposing a December 15 deadline on reaching a collective bargaining agreement. If a deal isn't reached by that date, the season would be canceled. The idea was put forward yesterday by Oilers President & GM Glen Sather (David Shoalts, Toronto GLOBE & MAIL, 11/16). Sather: "I'm still a firm believer that Bob Goodenow is a kind of guy who is not going to make a deal until there's a concrete day and time that says if a deal isn't done now, there's not going to be a season" (TORONTO SUN, 11/16). LEAGUE FACES FRONT-OFFICE LAYOFFS: The NHL announced plans to lay off 14 full-time and six part-time employees effective December 1, if there's no settlement. Remaining employees, including Bettman, will take a 10% pay cut. Those making less than $30,000 a year, will take a 5% cut (Mult., 11/16). One league source "said some of the laid-off personnel would not be rehired once -- or if -- a deal is struck with the players" (Kevin Paul Dupont, BOSTON GLOBE, 11/16). Goodenow has refused pay during the lockout, but he stands to make as much as $600,000 in '95, almost double his present salary (Dave Fuller, TORONTO SUN, 11/16). THE ALLEGED ROOKIE CAP: NHL Senior VP & General Counsel Jeff Pash brought GM's up to date on the union's latest proposal, "which had been said to include a form of a rookie salary cap." The NHLPA proposal only includes an offer to forego arbitration for a player's first contract and elimination of compensation and equalization clauses for free agents under 24 or with less than five years experience (David Shoalts, Toronto GLOBE & MAIL, 11/16). FROM THE GM'S: Lightning GM Phil Esposito: "If you're going to be a union -- and I was in the union for 19 years -- then you've got to have an agreement, or don't be a stinking union" ("SportsCenter," ESPN, 11/15). Islanders GM Don Maloney: "Everybody is totally supportive of what Gary and the league is trying to accomplish" (Jim Smith, N.Y. NEWSDAY, 11/16). Whalers GM Jim Rutherford: "There's nothing here at this point to indicate that we're going to have a season" (Jeff Jacobs, HARTFORD COURANT, 11/16). Canadiens GM Serge Savard: "For the first time, I am scared the season won't be played" (Toronto GLOBE & MAIL, 11/16). FINAL COURSE: Bettman on his dinner Monday night with Goodenow: "The food was excellent" (Jim Smith, N.Y. NEWSDAY, 11/16)....David Shoalts estimates that, to this point, the league has lost $166.3M in revenue (not counting the TV deal with Fox), the players have lost $85.4M in salaries, and each team has lost an average of $719,200 in operating income (Toronto GLOBE & MAIL, 11/16)....San Jose Mayor Susan Hammer is "pessimistic" that the '95 All-Star Game will be played. San Jose Metropolitan Chamber of Commerce President Steve Tedesco estimates that the overall economic impact for the city could have been in the $40-50M range (Ann Killion, SAN JOSE MERCURY NEWS, 11/16).
"The life may be dribbling out of a nascent pro soccer league," according to John Helyar in today's WALL STREET JOURNAL. MLS will announce today that a delayed start-up in spring '96, though officials plan to "try to surround the setback with signs of progress," such as new franchise cities and financial backers (WALL STREET JOURNAL, 11/16). THE GOOD NEWS: The MLS will announce which franchises will join the seven charter cities (L.A., Washington, NYC/NJ, San Jose, Columbus, Boston, and Long Island) out of a pool that includes Chicago, Indianapolis, Denver, Seattle, Kansas City, and Tampa. Investors for these new teams will include NFL Chiefs owner Lamar Hunt and Metromedia Chair John Kluge. It "remains uncertain" whether the MLS will have ten or twelve teams (Jere Longman, N.Y. TIMES, 11/16). Other investors will include API Soccer, a division of a U.K.-based sports marketing Sponsorship Group headed by Kevin Payne, and a group of L.A. businesspersons, L.A. Soccer Partners. Most investors will contribute to the league and operate a designated team. However, there will be investors who won't run teams, including MLS founder Alan Rothenberg's investment group, investment banking firm Donaldson Lufkin Jenrette, and investment banker Paul Tierney. A "major" Japanese corporation is also "likely" to invest (Roscoe Nance, USA TODAY, 11/16). WORLD CUP BACKLASH: Reasons for the league's delay include "outsize ambition, flawed structure and alienated sponsors," according to the WALL STREET JOURNAL. MLS is short of its $100M capital goal. Rothenberg, who also organized last summer's World Cup, "envisioned piggybacking" on its success, but the tournament has "done as much harm as good." Richard Groff, commissioner of the rival American Professional Soccer League (APSL), says Rothenberg and MLS officials were trying to run the World Cup and MLS at the same time: "I think basically they ran out of time." Rothenberg's handling of the World Cup led to "infighting" within the U.S. Soccer Federation and his "effort to parlay the World Cup's success into a lucrative business for himself" has caused further "resentment." But more damaging could be the "wedge" driven between potential MLS sponsors and league organizers after the World Cup. MasterCard Int'l wound up suing the World Cup over $75M exclusive card rights, and Anheuser-Busch's "was furious" with Rothenberg's ban on beer sales at World Cup venues. IEG Sponsorship Report Editor Lesa Ukman said World Cup USA had an "Olympic organizing committee attitude, where you sell for as much as you can because you're just a one-time entity." Potential MLS sponsors are also "turned off" by a $2M category sponsorship and the fact the league won't have the int'l appeal of the World Cup (WALL STREET JOURNAL, 11/16).
NBA Player Reps voted on Monday in Chicago to reject the first "written proposal by the NBA to forge a new collective bargaining agreement." Hawks Player Rep Jon Koncak said the proposal dealt with a salary cap, free agency, and licensing, adding that there was no rookie salary cap, but that there were "provisions to close both the one-year and out option and balloon payments." Koncak: "We are not interested in doing that." Koncak did say that "some headway" was made in distribution of money from licensing and merchandise saying that the proposal was "a starting point" (Peter May, BOSTON GLOBE, 11/16). "The players are growing comfortable with the fact that the salary cap is here to stay," according to Steve Bulpett of the BOSTON HERALD. While the players work on a rookie wage scale and more revenue from merchandise under a new CBA, a "strong current of reality runs through" the NBPA. Bulls Player Rep Steve Kerr: "The Players Association originally took the position that we want to eliminate the cap. I am sure the French want the Louisiana Purchase back, too. The owners aren't going to go for that" (BOSTON HERALD, 11/15).