YOU ARE HERE: LAT HomeCollections

Dollar Signs Give Way a Bit to Stop Signs : Golden Age of Unparalleled Spending May Be Coming to an End

The Sports Squeeze: Last In A Series

August 31, 1985|BRUCE LOWITT | Associated Press

More is giving way to less in a new, emerging economy aimed at restoring stability to sports.

There is less competition from rival leagues. There is less expense in salary increases and other costs. There is less reliance on television for money and fan support.

Partly by design and partly by natural progression, the change is already starting:

--Salaries are leveling off, and although superstars will still get the big contracts, owners and players predict that overall increases will continue to decline.

--The United States Football League, after a two-year salary war with the National Football League, has dropped out of the bidding for most college stars, easing pressures on the NFL.

--The National Basketball Assn. operates under a salary cap limiting team payrolls. The immediate result last season was that although 10 teams lost money, that was 7 fewer than the previous year.

--Baseball's new collective bargaining agreement calls for revenue-sharing to help struggling teams, and owners estimate that they will save $400,000 a year per team, starting in 1987, from salary arbitration changes.

It is a gradual transformation deemed necessary to restore balance to a business where unparalleled growth led to unparalleled spending over the last decade.

"Maybe this latest golden age of sports is coming to an end, but it's not turning to lead," said Bowie Kuhn, former baseball commissioner.

Even the arbitration changes in baseball should be no more than a temporary setback for most players.

A player will need three years' major league service instead of two to be eligible for arbitration. And players with three to five years of major league experience no longer will be able to use inflated contracts of players with six or more years of experience in making their cases at arbitration hearings.

"A player could be hurt for one year," second baseman Bill Doran of the Houston Astros said. "But the good players will make their money in the long run."

Said Charlie Hough, a Texas Ranger pitcher in his 13th season: "One or two years do not make a career. The owners figure if you play long, they'll pay, and I kind of agree."

Mike Flanagan, a pitcher with the Baltimore Orioles, said: "If you put a couple of years back to back, you'll get the money. This keeps the one-year flash in the pan from making it big."

Players really made it big because of competition for their services--from rival leagues in football, basketball and hockey, and from free agency in baseball. That competition has faded and the annual increases are dwindling.

"I've lived through the demise of the World Hockey Assn., the World Football League, the American Basketball Assn.," sports agent-lawyer Bob Woolf said. "I've represented a lot of players who had wonderful contracts that weren't fulfilled. There's no sense having a great contract if you've got no place to play. And more and more players realize that."

In the NFL and NHL, salaries rose about 25% in most years when they were bidding against rival leagues. Since then, they've gone up 12%-15% a year. The NBA's experience was similar.

In baseball, player salaries, which leaped 47.6% immediately after players gained free agency in 1976, are now rising at about a 10% rate, less than the average increases just before free agency.

Further, the owners estimate that salaries will increase no more than 10%-15% per year over the next four years. The players say it will be even less, closer to 6%-7% a year.

"I don't think the salary structure for the top players will be affected because they'll get the market price," said Mike Krukow, a pitcher for the San Francisco Giants. "But the rest of the guys will be getting less."

Negotiating the superstar contracts could be more difficult in baseball under a new contract requirement for up-front financing of all long-term contracts. If a player is to be paid for years after he leaves the game, the money has to be put in escrow. Teams may no longer mortgage--or bankrupt--their future.

That's less a problem in football, where only about 1% of the 1,545 players have money deferred beyond 10 years. Most players' salaries are paid off in 1-5 years, some in 5-10 and very few beyond that.

One reason, said union spokesman Jay Benoit, is that players have learned that they can make more by getting their salaries now and investing the money themselves.

Just as television was pivotal in the money boom, it will be a key to the retrenchment.

"I don't think our television contract will go up 2 1/2 times to over $4 billion for five years," said NFL Commissioner Pete Rozelle, who negotiated a record $2.1 billion, five-year contract with the three networks in 1981. "I think we will have an increase, but it's not going to be an increase that will compensate for continual escalation of player salaries of 25-30%."

The proliferation of money led to a proliferation of sports on the air. Will there be less now?

Los Angeles Times Articles