NEW YORK — Thanks to a flood of licensing royalties, the cash-rich baseball players' union has the financing to amass a $60-million reserve fund to battle a possible lockout by owners next spring, fight three free-agent collusion cases at once and pay its executive director $450,000, one of the highest union salaries in the country.
The union's latest victory against owners could be viewed as a generous return on its investment: having spent $1 million to pursue the 1985 collusion case against the owners, arbitrator Thomas Roberts last month awarded $10.5 million to 139 players in that year's free-agent class.
"Nobody ever anticipated the growth of licensing, surely not like this," said executive director Donald Fehr. "Of course, we'd do less without money from licensing, or we'd have to go to the players for more money."
Players still pay dues ($1.6 million last year) to cover the union's operating expenses. Royalties are designed to go directly to the players--who got about $5,000 apiece this and last year, a small percentage of total revenues--but have been set aside for non-operating expenses like the contingency fund, the collusion cases and arbitration.
"I can't spend the money without approval from the executive board of the union," Fehr said. "If I want agent regulations, for instance, I can't authorize it without direct player involvement."
The growing financial strength makes the baseball players' union team sports' most powerful and wealthy labor organization.
Consider that royalties from 1989 licensing deals for trading cards, action figures and board games and other products will exceed $30 million, up from nearly $30 million in 1988, $18 million in 1987, and $8 million in 1986.
Fehr said the royalties will swell the union's contingency fund to at least $60 million by February. At the end of 1988, $37 million had been invested in U.S. Treasury bills and certificates of deposit, according to the players' union filings with the U.S. Department of Labor.
Under ordinary circumstances, nearly all the royalties would be rebated directly to the players. But the union has opted to keep them in reserve to prepare for the almost certain labor-management battle.
"If there's a long siege," said Fehr, "the union's board will consider distributing the money in pieces during the year. If we get a settlement early, the board will most likely distribute all it's held onto."
