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Baseball Tunes in for the Future : Television: Owners are expected to approve contract setting up partnership with networks that will generate lower revenue.

May 27, 1993|ROSS NEWHAN | TIMES STAFF WRITER

A six-year agreement that puts baseball in the advertising and sales business as a partner of NBC and ABC is expected to be approved by the owners during a conference call Friday.

Unlike the four-year, $1.06-billion contract with CBS, which expires after the World Series and has brought baseball an average of $265 million a year, there is no rights fee in the ABC-NBC deal, and baseball's yearly revenue from the over-the-air contract could be reduced by 50%.

The road to approval has been marked by internal bickering and name calling, but in a take-it-or-leave-it economic environment, most owners and club officials say the innovative proposal is neither an act of desperation nor a measure of waning popularity.

"Businesses are always going to be confronted by changing market conditions," said Stan Kasten, president of the Atlanta Braves. "I think it would have been an act of desperation if we had dug our heels in the sand and attempted to take the conventional approach again, rather than being creative and trying to maximize our revenue possibility."

Dodger President Peter O'Malley said baseball's TV committee could have done a better job of explaining the proposal to alleviate confusion that was created among fans, media and the clubs, but he added:

"It may take time (to reap the full benefit of the partnership's potential), but if you believe in the product, as I do, I think it's an intelligent approach to the current market."

Perhaps, but the 28 clubs have hardly been unified on the issue.

The New York Yankees and Mets, along with the Toronto Blue Jays, attempted a big-market coup of sorts by encouraging CBS to make an 11th-hour bid to retain the baseball package. They were concerned that prime-time game-of-the week telecasts, proposed in the NBC-ABC deal, would cost them significant income from the loss of local baseball telecasts.

The CBS bid was delivered by a basically uninvited Neal Pilson, president of the network's sports division, at an owners meeting in Chicago two weeks ago, angering the TV committee of Bill Giles, president of the Philadelphia Phillies; Tom Werner, chairman of the San Diego Padres, and Eddie Einhorn, vice chairman of the Chicago White Sox. The bid was dismissed.

Giles, who estimated the Phillies will lose $500,000 in local TV revenue if the partnership is adopted, said the CBS bid was strictly a grandstand play.

"CBS had its chance," he said.

In addition to potential friction between some of the big- and small-market clubs, sources say there were suggestions by some clubs that Werner and Einhorn, who have built careers in TV production, had conflicts of interest in directing the new proposal toward ABC and NBC because of their ties to those networks.

Neither has been accused directly, but suspicions have heated up many recent conversations among the owners, according to sources who said that the proposed partnership has also sparked:

--Concern among the clubs over how they prepare a yearly budget when they don't know what their TV income will be and the belief that the considerable revenue loss underscores the need for a new compensation system.

--Criticism from Congress and others that the ABC-NBC proposal is a step toward pay-per-view, which baseball has denied, but which is known to be an ongoing subject of conversation within the industry.

--Renewed concern from the players' union that it wasn't consulted about parts of the plan that require union approval.

"It's another example of the owners' belief that they have the unilateral right to do anything they want, with no regard for our opinion," Don Fehr, the union's executive director, said.

The concept calls for another playoff tier in 1994 and is likely to incorporate realignment in 1995 and expansion soon after that, all of which requires union approval.

But it was not until the proposal was announced that Fehr was invited to an explanatory meeting with the owners' chief labor negotiator, Richard Ravitch, and John Harrington, Boston Red Sox president and format committee chairman. At the meeting, Fehr reportedly asked Ravitch why he hadn't told him about the TV package.

Responded Ravitch: "How could I tell you when I hadn't been told about it myself?"

The owners are eventually expected to get union approval for a new playoff tier because it means another payday for the players, but the partnership with NBC and ABC flies, they say, even if the extra playoff round doesn't.

"That's optional," O'Malley said of expanded playoffs and three divisions.

"My own view is that we need to take more time with that part of it. I'm not against change. In fact, I'm for it, but only after intelligent planning and research. I don't think we really know how the fans feel about it."

At best, baseball expects to start the NBC-ABC partnership by clearing about $140 million a year.

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