Fielding some myths about the economics of baseball

Since baseball owners have been pulling the wool over the public's eyes for a century or so, it's hardly surprising that they've managed to cloud the issue once again and make many people see the players as villains in the current strike.

The owners' big propaganda weapon, of course, is the rapid escalation of salaries in recent years. It's difficult for the public to understand why such highly paid workers would walk off their jobs. How can they be dissatisfied with such a good deal? How much more do they want?

It's only human nature to think this way, and the owners are only too happy to exploit it. They tell anyone who will listen that today's high salaries are driving them all to the poorhouse, and they say the only solution is to make new rules that will keep the payrolls down.

This is all so patently absurd that it's amazing anyone even listens to it, but people do. So perhaps now, with the strike already nearly a week old, it's time to clear up a few misconceptions. First, it will be a long time before anyone will have to hold a benefit for a club owner. They love to talk about how much money they're losing, but all of us should realize by now that these "losses" exist only in the fertile imaginations of the tax lawyers.

Baseball is already a very lucrative business, and with the expected growth of cable TV, even today's huge profits may well be dwarfed by those of the future. The owners can afford the big salaries, all right; they'd just prefer to keep more of the money for themselves, in the manner to which they became accustomed before free aency.

Just how much the various clubs do makes is an intriguing question, and one to which we aren't about to get an answer. Which brings us to another key point.

Although management loves to tell the press and public how tough things are, it always conveniently neglects to mention this "fact" at the bargaining table. Could that possibly be because of the rule that says if you claim inability to pay during negotiations, you have to open your books to demonstrate the point?

The players, in fact, felt that the owners had gone too far this time by all their public utterances about impending financial disaster.The National Labor Relations Board agreed, saying that the owners should open their books. But eventually the owners won a court ruling that they could keep not-so-little secrets to themselves, since they had been smart enough to say these things for public consumption only -- and never as a formal negotiating point.

So much for the owners' ability to pay. Now let's look at the question of whether the players deserve those big salaries.

The first thing to do is dispose of the management-inspired idea that most major leaguers earn around $160,000 a year. This may be an average figure, but even a little second- grade math should make it clear that the two things aren't the same. If 10 players have an average salary of $160,000, for instance, and one of them happens to have one of those million-dollar-a-year contracts we hear so much about, then the nine others are averaging somewhere between $60,000 and would like us to believe. And remember, these are professionals at the very top of their field.

As for those relatively few super duper salaries, a player's value is based on (1) his contributions on the field, and (2) his ability to attract fans. If he's well up there in both categories -- like a Reggie Jackson or a Pete Rose -- he's probably worth even more than what he's getting.

Of course it is ridiculous -- and doesn't say much for our society's sense of values -- that the spectacle of men playing a children's game is able to generate all those millions. But that's neither here nor there. The money does come in, so the only question left is where it should go. And the best way to answer this one is to ask when was the last time anybody bought a ticket or turned on his TV set to watch an owner sit behind his desk or relax at his country estate?

This principle -- that the people putting on the show are entitled to the bulk of the profits -- is accepted without question in all other segments of the entertainment industry. In fact, the incomes of TV and movie stars like Johnny Carson, Robert Redford, etc., make even the highest baseball salaries look like coolie wages by comparison. So what is all the fuss about?

When Sandy Koufax was in his heydey, just to cite one instance, the Dodgers found that his presence on the mound usually meant about 10,000 more people in the stands. Since a pitcher starts about 20 homes games a year, that's 200,000 extra fans he puts in the park -- and even at a most conservative estimate of $5 total outlay per fan, that comes to an additional $1 million in revenue he generated over and above what he was worth as a star of a successful team. And even this doesn't count how much he meant in terms of TV ratings, or the equally high extra revenue he produced on the road.

Whatever Koufax made -- and by today's standards it wasn't much -- he was grossly underpaid. The same held true for Ron Guidry when he was packing them in at Yankee Stadium a few years ago, and it happened again this spring with Fernando Valenzuela in Los Angeles. Both of these players generated huge amounts of money while seeing very little of it themselves, since they happened to be in the low range of the salary structure. Can anyone blame them for wanting to get theirs in subsequent contracts?

The current strike, of course, is not over specific salaries (these are negotiated individually), but over the issue of "compensation" to a club that loses a player via free agency. It comes down to money in the end, though, because obviously if a team singing a free agent has to turn over a valuable player of its own in return, it changes the whole structure of the deal and reduces the amount of money the free agent is able to command.

It becomes, in fact, a sort of trade -- going back to the old days before the courts ruled that teams didn't "own" players for their entire careers. The players have already won that issue on the legal battlefield, and they obviously have no intention of giving it up at the bargaining table.

So the next time anyone tries to make the players the villains in this strike , one might well ask (1) why don't the owners open their books and show everyone how impoverished they are, and (2) who deserves the lion's share of the revenue -- the athletes the fans are paying to see or the businessmen sitting out there getting a few rays on their yachts and clipping their coupons?

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