Last Thursday, the eighth day of major league baseball's lockout, former Secretary of State Henry Kissinger was spotted entering the Manhattan office building where representatives of the game's owners and players were meeting. He wasn't there for the talks, but given that the two sides had had nearly 30 negotiating sessions and were still far from an agreement, someone probably should have grabbed Kissinger, thrown him into the meeting room and instructed him not to leave until a settlement was reached. Anyone's help would have been most welcome.
Especially to the owners, who have had a bad last three months. They are up against a resolute Players Association that feels it's payback time for what it calls financial "fibbing" by the owners during previous collective bargaining negotiations. And the players are negotiating with owners who, it became clear last week, are so disorganized that the best chance for agreement now lies in the hands of commissioner Fay Vincent, who entered the talks two weeks ago because, in the face of management disarray, he felt he had to do something. Indeed, the owners' confusion is a big reason why spring training games have been canceled and incredulous fans have been left to wonder how an industry at its alltime height in popularity and wealth could decide to shut itself down.
The owners have divided into two main factions. One consists of hard-liners, who for various reasons would accept a long lockout. The other is composed of those owners who believe they risk losing too much should the lockout extend into the regular season.
Four of those believed to be hard-liners are on the six-owner Player Relations Committee (PRC), including the chairman, Bud Selig of the Milwaukee Brewers. Selig has complained that he can't compete financially with teams in the larger markets, and he has been pushing for drastic changes in the Basic Agreement with the players. Minnesota Twins owner Carl Pohlad, who has a reputation as a tough businessman, also operates in a small market. The Houston Astros' John McMullen has long bemoaned the free-spending ways of other owners. As a member of the committee, McMullen has maintained his tough position but is caught in a peculiar situation: He's trying to sell the Astros but is stymied until a labor agreement is made, and thus could benefit from a speedy settlement. Jerry Reinsdorf of the Chicago White Sox is also in the hard-line group; even though his team plays in the nation's No. 3 market, Reinsdorf's team ranks No. 2 in Chicago, behind the more popular Cubs. Also in this camp, though not on the PRC, are the two main owners of the Pittsburgh Pirates, former Westinghouse CEO Douglas Dan forth and lawyer Carl Barger. Barger has claimed that the small-market teams are becoming "a farm system" to Los Angeles, New York and Chicago teams.
March 5, 1990
The "soft" camp—those who are inclined to a quick settlement—includes those owners with the most to lose: the Los Angeles Dodgers' Peter O'Malley, the New York Mets' Fred Wilpon, the California Angels' Gene Autry and the New York Yankees' George Steinbrenner. Owners new to the industry, such as George W. Bush of the Texas Rangers and Jeff Smulyan of the Seattle Mariners, would also fall into this group; as first-timers, they are eager to play. So is Ewing Kauffman of the Kansas City Royals, who has always seen his franchise less as a profit center than as a civic resource and who, after spending freely in the off-season, has a team with championship expectations. There are also several owners, quiet moderates, whose leanings are less obvious.
Getting such disparate groups to act in unison is no easy task, and never were the owners in greater disaccord than in the last two weeks. After three months of getting nowhere, they dropped their revenue-sharing plan and their pay-for-performance formula for determining salaries of players with less than six years of major league experience. "It puts us on the same continent," said Eugene Orza, the Players Association's general counsel. "Unfortunately, the continent is Asia."
Then, a few days later, the owners infuriated the players anew with another drastic proposal, which, among other things, would have eliminated the use of free-agent contracts and multiyear contracts for purposes of comparison during salary arbitration hearings and would have eliminated the maximum salary cuts (20% for one-year contracts and 30% for two-year contracts) for players with three to six years' service. The next day deputy commissioner Steve Greenberg called the Players Association and told Orza, "Yesterday didn't happen." Presto, the proposal was scrapped.
"It's a peculiar way to negotiate," said Dodger pitcher Tim Belcher of the owners' change of direction. Added Brewers infielder Paul Molitor, "It's very hard to tell who's in charge for them."
It has been that way since Nov. 15, the scheduled beginning of the talks, which were immediately postponed by the owners. On Dec. 14 the owners outlined their revenue-sharing proposals but could not answer the players' key questions about the plan. When Players Association executive director Donald Fehr asked, for example, if the players would make more or less money under the proposal, Chuck O'Connor, executive director of the PRC, said, "I don't know."
"I kind of felt sorry for Chuck," said Phil Bradley, a Baltimore Oriole outfielder. "They sent him into a fight without any ammunition."
After the owners withdrew their original proposal, Orza said, "They wasted four months of negotiations. They made proposals with the idea that the players would reject them. Now the season is in jeopardy." Fehr disgustedly shook his head and said, "We didn't start the kind of negotiations that could lead to an agreement until this week."
So the two sides were at last down to the one issue that had to be addressed, the issue that should have been attacked in November, the issue on which each side has refused to budge: salary arbitration eligibility. The arbitration system, which was adopted in 1974, originally allowed players with two to six years of major league experience to have their salaries determined by an impartial arbitrator. But in 1985, when the owners cried poverty—which the union has established was a false claim—the players made a concession, raising salary arbitration eligibility from two years to three. Arbitration has probably become a more important factor in increasing players' salaries than free agency, and the owners are afraid that if arbitration is expanded to include two-year players again, they will have lost another measure of control over expenditures.
But Fehr is on a mission to get that year back, claiming that the owners' income projections prepared for the '85 negotiations have been exceeded by at least $500 million in each of the last four years and that the players have not shared commensurately in that bounty. Teams are all "in the deep, deep, deep black now," says Orza. "No charcoal gray."
The players also want the minimum salary hiked from $68,000 to $112,500, rosters restored from 24 to 25 players and pension benefits increased. All this can be worked out—"The offer we now have on the table is a very fair one," said Selig on Monday—but arbitration eligibility remains a hurdle. Orza said he has been told that the owners won't ratify a contract if arbitration is moved back to two years. "We don't have room in that area," said O'Connor. Some players and agents have said privately that getting the year back is not critical to them, as long as the other elements can be resolved to their satisfaction. But at the bargaining table the union has shown no proclivity to compromise on the issue. "It's a proverbial stone wall," said Fehr. On Monday, Vincent said, "It's tragic to the point of absurdity."
Fehr left New York on Monday for a meeting of the Players Association executive board in Phoenix and indicated that further talks with the owners would be delayed. Fehr said that if the lockout lasts until April 15, the date when players would receive their first paychecks, he would consider legal action. "We have substantial grounds to challenge every single lockout clause," he said.
There's plenty of time between now and April 15, but already Dodger pitcher Orel Hershiser has said a settlement might come too late for him to get in shape to start on Opening Day, scheduled for April 2. Players were working out last week at high schools, in municipal parks and in backyards, but each day without an agreement further threatens the season. Where's Kissinger when you really need him?