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BASEBALL / ROSS NEWHAN : However Arguments Are Served, Fans Left to Stew

August 28, 1994|ROSS NEWHAN

Let's say no one is really cooking the books. Let's say both sides are simply using their own recipes.

It was no surprise, for example, that Stanford economist Roger Noll, a longtime advocate and witness for sports unions who was commissioned again by the Major League Baseball Players Assn., prepared a financial report debunking the owners' portrait of despair.

Noll, in his report released last week, reworked and rewrote the confidential financial statements that the clubs had provided a skeptical union.

Those reports, acting commissioner Bud Selig has said more than once, were prepared by some of the largest accounting firms in the country.

Are you saying, he has said, that they cooked the books and were part of a conspiracy?

No one has said either, but what can be said is that a chef can only work with the ingredients that are provided.

An accountant, for example, can't change the fact that Ted Turner takes less than $10 million out of the pocket of his broadcasting system to put in the pocket of his Atlanta Braves for television rights.

An accountant, for example, can't change the fact that the St. Louis Cardinals, for several years, failed to report parking and concessions as part of their income.

Or that George Steinbrenner, according to the New York Times, diversifies the $40 million he receives for the New York Yankees' cable rights from Madison Square Garden network so that he diminishes the amount reported as TV income and reduces the percentage he is required to share with the other teams under baseball law.

An accountant, of course, can make suggestions, shrewdly recommend what goes where, but the owner represents the bottom line.

The owners contend the current system is a recipe for disaster. They projected 19 clubs would lose money this year, then adjusted that to 12 to 14 after The Los Angeles Times reported they were including lucrative franchises such as the Dodgers and Chicago White Sox among those 19.

Noll, in his report, said baseball underestimated its pre-strike 1994 revenue by anywhere from $50 million to $140 million and disputed management's contention that salaries are rising faster than revenues. He said every current market is capable of sustaining a viable franchise provided there is good management.

Where does the truth rest?

What does it matter, suggested owners negotiator Richard Ravitch.

"You can argue numbers until you're blue in the face," he said the other day. "That's not the issue (in the stalemated bargaining talks). The owners should not have to plead poverty to have the right to know what their labor costs are, to establish a system of cost certainty. What does it cost to play? That's all they're trying to determine."

Perhaps, but it does matter.

The owners' salary-cap proposal is based on 50% of total revenue going to the players for compensation, pension, etc. The owners are flexible on the percentage, but who would determine what the total revenue is? Whose recipe would be used?

"Tell us what percentage you want and we'll cut a deal," White Sox owner Jerry Reinsdorf asked the players more than once in Thursday's meeting.

"Tell us how much profit you want, Jerry," finally responded Donald Fehr, the union's executive director.

The players, of course, will never accept a cap, but the revenue question could become a major issue if the owners unilaterally implement their system.

In the meantime, despite Noll's salaried bias, it is worth recalling that an analysis he did for the union amid the 1985 negotiations, criticized by owners then as his 1994 report has been, proved to be more accurate than the owners' pessimistic projections.

"Obviously, the 1985 prophecy of doom was not fulfilled," Noll writes in his new report. "The prophecy of impending doom is far more implausible in 1994 than it was nine years ago."

Baseball, he writes, "is financially healthy--healthier than it was in the mid-1980s."

AL, NL, and . . . ?

Here it comes. Talk of player defections and a new league. Inevitable in any sports stoppage, but highly implausible.

Said Noll, in an interview with the San Francisco Examiner:

"If a new major league forms, I would bet you money the Dodgers and Yankees are in it. Believe me, the guys with the mobility threat are the big-city teams. If Donald Trump, who tried once before, decides it's time for the Federal League to be reformed, and calls up (Peter) O'Malley, Steinbrenner, WGN, WTBS and some others and says, 'Let's do it,' they might say, 'To hell with Bud Selig. We don't need Milwaukee.' The governing body of baseball could find itself a small-market force with no players.

"That's why I think they'll settle by Labor Day. My suspicion is, not necessarily O'Malley, because he's too nice a guy, but Steinbrenner and Reinsdorf, if it looks like they're going to blow away the rest of the season, and instead of making $30 million they're going to lose $10 (million), will say, 'Let's give this up.' I think they'll say this before Labor Day, and they'll carry the day."

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