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Sunday, August 25
Updated: August 26, 12:03 PM ET
Owners make new proposal to union to avoid strike

Associated Press

NEW YORK -- A day after criticizing players, baseball owners made a new economic proposal Sunday that moved toward the union in an effort to head off a strike later this week.

The differences
The two major issues negotiators are working on in hopes of reaching a new Basic Agreement (amounts in millions):
Revenue sharing (Transfer amounts)
Year Players: Owners:
2003 $172.3 $263
2004 $195.6 $263
2005 $219.0 $263
2006 $242.3 $263
Luxury Tax (Players)
Year Tax Rate
2003 $125 million threshold; 15 percent tax
2004 $135 million threshold; 20 percent first-time offender, 25 percent second-time offender
2005 $145 million threshold; 20 percent first-time offender, 30 percent second-time offender, 40 percent third-time offender.
2006 No tax
Luxury Tax (Owners)
Year Tax Rate
2003 $107 million; 35 percent
2004 $107 million; 35 percent first-time offender; 40 percent second-time offender
2005 $107 million; 35 percent first-time offender; 40 percent second-time offender; 45 percent third-time offender
2006 $111 million; 35 percent first-time offender, 40 percent second-time offender, 45 percent third-time offender, 50 percent fourth-time offender

Players, who have set a Friday deadline for a walkout, called the economic plan slight progress, and union head Donald Fehr said "the differences continue to be narrowed.''

Owners raised their thresholds for a luxury tax and lowered their proposed tax rates, and also slightly decreased the amount of local revenue they want teams to share. They also made a new proposal on testing for steroid use, where the sides remain apart on details.

"While they did make some small movements in those areas, the luxury tax thresholds remain very, very low and constitute a big problem for us at this point,'' he said. When combined, he said the revenue sharing and luxury tax plans still look "very much like a salary cap.''

So five days before the strike deadline, baseball was still faced with the prospect of its ninth work stoppage since 1972, one that could further antagonize fans fed up with the sport's near-constant fights over money.

On Saturday night, management negotiators severely criticized the union for proposing the revenue-sharing increases be phased in, using the most harsh language since talks began in January.

Rob Manfred, the owners' top labor lawyer, said that after consultation with commissioner Bud Selig, his side decided "the best way to find out if they were serious about making an agreement was to put whatever happened last night to one side and make a forthcoming proposal and see if they could manage to do the same thing.''

On revenue sharing, owners proposed that teams share 36 percent of their locally generated revenue, up from 20 percent this year. The teams' previous plan was 37 percent, and the union moved up to 33.3 percent in its Saturday proposal.

Using 2001 revenue figures for analysis, the owners' plan would transfer $263 million annually from baseball's richest teams to its poorest. Because the union's proposal was to phase in changes -- a concept owners object to and say was not brought up until recently -- the players' proposal would transfer $172.3 million in 2003, $195.6 million in 2004, $219 million in 2005 and $242.3 million in 2006.

"From our point, phase-ins are going to be integral parts of this deal,'' Fehr said.

On the luxury tax, designed to slow spending by high-payroll teams, the owners previously proposed to tax the portions of payrolls above $102 million. On Sunday, they increased their threshold to $107 million in the first three years of the new contract and to $111 million in 2006.

Players have proposed thresholds of $125 million next year, $135 million in 2004, $145 million in 2005 and no tax in the final season of the deal.

Owners lowered most of their proposed tax rates by 2.5 percent Sunday, proposing a team be taxed at 35 percent the first time it exceeded the threshold, 40 percent the second time, 45 percent the third time and 50 percent the fourth time.

Players proposed rates Saturday of 15 to 40 percent.

Labor talks update
Monday's schedule: Both sides will be in their offices, with one or more bargaining sessions anticipated.

Sunday's highlights: Owners made new revenue sharing and luxury tax proposals that moved toward players, who said the move was insufficient.

Quote of the day: "While they did make some small movements in those areas, the luxury tax thresholds remain very, very low and constitute a big problem for us at this point."
-- union head Donald Fehr.

"The deal is there,'' Yankees player representative Mike Stanton said. "It's just a matter of getting it done. There have been concessions made on both sides and we're still meeting. That's a reason why I'm cautiously optimistic.''

Under management's proposals, the amount the Yankees would give up in revenue sharing would increase from $28 million in 2001 to about $55 million next year, according to union. In addition, if payroll remained where it currently is ($171.2 million for the 40-man roster, including benefits), the Yankees would have to pay luxury taxes of $22 million next year, $26 million in 2004 and $32 million in 2005.

"Nobody, not even the Yankees, can absorb that kind of hit to their financial structure at once,'' Fehr said.

Under the union's proposal, with the changes phased in, the Yankees would give up a total of $47 million next year in both revenue sharing and the luxury tax.

"This whole debate over who ought to bear what burden -- we don't think is particularly relevant to this negotiation,'' Manfred said.

Management's move on the threshold would not decrease the number of teams that would pay a tax next year if payrolls remain where they are. Under management's accounting, Texas is second to the Yankees at $131.4 million, followed by Los Angeles ($118.8 million), Boston ($114.8 million), the New York Mets ($112.9 million), Arizona ($112.1 million), Atlanta ($110.4 million) and Seattle ($98 million).

Owners object to the union's proposed 2003 threshold of $125 million because only two teams currently exceed it.

"We're moving on thresholds where teams actually inhabit the zone rather than in thresholds where no clubs live,'' Manfred said.

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