Why Baseball Players Are Right to Strike
In America today, there is one article of faith more certain than the goodness of the war on terrorism and the virtue of forcing kids to say "under God": the evil of baseball players going on strike.
Some fans believe that players are clueless about the harm a strike would cause. In fact, it's the fans who are clueless and who don't understand the harm to player salaries and to the future of the game that would be caused by giving in to the corporate communism demanded by owners.
By rewarding failure, chaining down success, and attacking players, the owners are endangering the long-term health of baseball. Yet with the help of the media (which are, coincidentally, largely controlled by baseball owners, in the case of Fox, ESPN [ABC/Disney], AOL/Time-Warner, and the Tribune Co.), the players have been bashed for their uppity attitudes. Reds general manager Jim Bowden even declared, "If they do walk out, make sure it's Sept. 11. Be symbolic. Let Donald Fehr drive the plane right into the building, if that's what they want to do." (Apparently the victims of terrorism died for the luxury tax, and anyone who says otherwise is asking for a fight).
The April 15, 2002 issue of Forbes found that the owners are lying about their profits in ways that would embarrass even an Enron executive. The MLB official numbers (presumably checked carefully by someone like Arthur Andersen) declare that baseball had $232 million in operating losses in 2001. The Forbes survey, by contrast, showed a $76.7 million profit. According to Forbes, the average MLB franchise is now worth $286 million, 10% more than last year. Team value has grown by the astonishing rate of 12 percent per year. Yet Major League Baseball claims it has lost money every single year since 1995, well over a billion dollars collectively.
Why are owners lying about their profits? Actually, lying about profits seems to be standard procedure among CEOs. But baseball runs backwards: Instead of inflating earnings like Enron, baseball owners are denying their huge profits. The reason is clear: Baseball relies upon corporate socialism, and crying poverty is the best way to get a taxpayer-subsidized stadium, or to turn public sentiment against players.
Imagine if your employer decided to get together with all the other businesses in your field and set a cap on salaries, so that any company which paid its employees excessively would pay a 50% tax. Would that cartel be fair?
Owners claim that they have only noble ambitions. Conservative columnist George Will attacked players for rejecting the owners goal of a more egalitarian distribution of wealth -- an idea he would denounce in any other case besides baseball. But corporate profits, not egalitarianism, motivate the owners.
Competitiveness and balance are far greater today than in the past, when free agency was just a dream. The Oakland A's (28th in payroll) are one of the best teams in baseball. And it took a lawsuit to stop the owners from contracting the Minnesota Twins; now the Twins might be the first team this season to clinch a division title. A decade ago, Seattle was considered a lost cause; they made just $3 million in local media revenue, lowest in baseball and half the level of the Montreal Expos (who were on the way to the playoffs before the 1994 strike). Today, the Mariners are considered one of the strongest franchises in baseball.
The only competitive balance owners care about is balancing their checkbooks with smaller payouts to players. In 1990, baseball owners made $1.3 billion in revenues and had $805 million after paying the players. In 2001, baseball had $3.6 billion in revenues and $1.6 billion leftover after the players were paid. Nor is baseball facing declining revenues that necessitate lower salaries. The ESPN contract, worth $40 million in 2002, will jump to $175 million in 2003 and $200 million in 2004 and 2005. Baseball will get an extra $465 million from the ESPN contract alone over the next three years, while the owners are effectively demanding reductions in player salaries. Any guesses on who will pocket that extra profit? Of course, the owners might use the money to generously lower ticket prices. And monkeys might fly out of commissioner Bug Selig's ass.
The biggest problem in baseball is cheap owners who use revenue sharing to make big profits while putting out a lousy team. In 2000 the Minnesota Twins received $21 million in revenue sharing, $5 million more than the entire payroll for their team. In 2001, the Expos got $28.5 million in revenue sharing. Rather than improving baseball, revenue sharing has been pocketed by the worst owners and enabled them to make money with terrible teams.
The only solution to improve baseball is not a luxury tax, but a cheapness tax. Teams that don't pay a decent payroll, who lower the quality of the game by pocketing the revenue sharing without even trying to win, those teams should be penalized by reducing the revenue sharing given to them.
It may seem ridiculous that an average player gets paid $2.3 million for barely being able to hit a ball with a stick. But what about the CEOs who were paid hundreds of times what Sammy Sosa makes to send their companies into the toilet? The real question is, who should make the profits? Are the owners, protected in their publicly-subsidized monopolies, entitled to greater profits even when they're incompetent? Or do the players deserve a fair share?
The solution to baseball's problems is simple. End corporate socialism. If the owners aren't willing to allow real competition, then it's up to the players to resist the owners' attempts to get rich at the expense of baseball.
John K. Wilson is creator of www.collegefreedom.org and the author of three books, not one of which mentions baseball. He lives in Normal, Illinois."