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Owners' List of Clubs Losing Money Decried : Baseball: The Dodgers and White Sox are among the 19 clubs alleged to be having financial trouble, a source says.

August 03, 1994|ROSS NEWHAN | TIMES STAFF WRITER

Two of baseball's most stable and successful franchises, the Dodgers and the Chicago White Sox, are among the 19 teams that Richard Ravitch, the owners' chief labor negotiator, claims will lose money in 1994, a lawyer close to the collective bargaining said Tuesday.

"That just shows how phony the list is," said the lawyer, who asked not to be identified.

Neither Ravitch nor Don Fehr, executive director of the players' union, would confirm or deny inclusion of the Dodgers and White Sox on the list. Fehr said he is bound by a confidentiality agreement signed when Ravitch turned over financial records of the clubs earlier in the summer.

In alluding to alleged economic problems and the need for a new compensation system based on a salary cap, Ravitch has frequently said 19 teams will lose money this year and included those projections in the material given to the union.

"I'm not getting into individual economics or specific clubs," he said Tuesday, acknowledging that projections aren't always on target. "The union has all the figures. As I've said many times, you don't have to prove poverty to be entitled to know your cost of labor. All we want to know is what it's going to cost to play ball."

Said Fehr: "Ravitch knows that if he revealed the 19 teams, people would laugh at him, which is the reason he won't do it. (The list) just shows how preposterous their allegation (of a widespread economic problem) is. He knows the figures don't support it."

Neither Sam Fernandez, the Dodgers' general counsel, nor Fred Claire, their executive vice president, would discuss the club's financial situation. Owner Peter O'Malley is on a business trip to Nicaragua. The Dodgers, with a player payroll of about $36 million, are expected to surpass 3.4 million in attendance, barring a work stoppage.

White Sox owner Jerry Reinsdorf said through a secretary Tuesday that he did not want to discuss labor issues, but Sunday he had said:

"I can survive under the (current) system. I don't like it, but I can survive. We're a big market, and we have a good ballpark and a good lease. I can't speak for anybody else, but I would surmise there are a handful of teams in the position we are, making some money . . . "

Who is to be believed, asked the lawyer familiar with the negotiations, Reinsdorf or Ravitch and his projected list of 1994 money losers?

Interim commissioner Bud Selig said: "We have not and will not identify the individual clubs, but I actually think another one or two could lose money this year (taking the list to 20 or 21 of the 28). I'm talking about money in, money out. Actual figures. The thing I resent most in all of the years I've been in baseball is the suggestion that we've cooked the books. Is someone suggesting that all the accounting firms in America are part of a conspiracy?

"The (economic) study committee had the figures for two years, and neither the union's representatives nor ours questioned the accuracy. I understand that people don't want to hear bad news, but the distress in this industry is greater than in all my 20 or so years combined. For too many years, we talked about doing something about it tomorrow. Well, tomorrow is here."

The union, seeking to maintain the status quo, cites industry revenue of $1.8 billion and projected attendance again of more than 70 million. If revenue streams have changed, Fehr contends, then change the revenue-sharing formula without linking it to a salary cap, which forces the players to pay for the contributions of the big markets to the small markets. He also suggests that bad management and bad marketing might be as responsible for the alleged problems as is salary growth.

Faced with the players' Aug. 12 strike date, talks resume in New York today with no hint of a compromise.

On Tuesday, both sides seemed to dismiss the possibility of a settlement based on the union giving up salary arbitration in exchange for a reduction in free-agent eligibility from six years to three or four and the owners giving up the salary cap.

Selig and Ravitch said the clubs want to get rid of salary arbitration--the 91 players who filed last winter showed an overall salary increase of 80%. But Selig added that without a salary cap or a designated percentage of revenue going to salaries, "the elimination of arbitration alone wouldn't make that much of a difference, the distress is so great."

Said Ravitch: "Most of the clubs are moving in that direction anyway, buying out arbitration by signing their best young players to long-term contracts."

Fehr said he would listen closely to a proposal eliminating arbitration and liberalizing free agency if the clubs could guarantee a market devoid of collusion. He said, however, that he doubted the clubs would ever propose the elimination of arbitration and liberalizing of free agency because it would further damage the small-market teams.

"If a team doesn't have the option of tendering arbitration," he said, "a Pittsburgh, for instance, could lose Barry Bonds after two or three years (depending on the adopted rule) rather than the current six. If the clubs ever make that proposal, you'll know the big-market teams have won everything."

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