NEW YORK -- After studying baseball's economics for 1½ years, a panel of experts recommended Friday the sport vastly increase revenue sharing among its teams and perhaps even move franchises.

Baseball admitted its clubs had a collective $1.4 billion in operating losses since the start of the 1994-95 strike and are a collective $2.1 billion in debt. Only three teams -- the New York Yankees, Cleveland and Colorado -- have been profitable since the strike.

The four-man group, which had access to all of the sport's financial data, didn't say the sport needs a salary cap and didn't recommend changes to free agency or salary arbitration.

Instead, the economic study committee urged baseball to impose a 50 percent luxury tax on payrolls above $84 million; proposed sharing 40-50 percent of local revenues after ballpark expenses; and recommended that new national broadcasting, licensing and Internet revenue be distributed unequally to assist low-revenue clubs, provided that they meet a minimum payroll of $40 million.

"We do not pretend to believe these changes will be easy or universally popular," said former Senate Majority Leader George Mitchell, one of the panelists. "We do believe them to be a solution to the alarming disparities between baseball's haves and have-nots."

Also on the panel were former Federal Reserve board chairman Paul Volcker, Yale president Richard Levin and political commentator George Will.

The New York Yankees, with a payroll of about $115 million including benefits, would have to pay a tax of about $15 million this year under the committee's proposed formula, and their revenue-sharing bill would increase from $25 million to $40 million or higher. Minnesota has the low payroll, about $20 million.

No changes are possible until after baseball's current labor agreement expires, probably after the 2001 season. Union head Donald Fehr said the union is likely to exercise its option to extend the current labor contract through the 2001 season, a decision that must be made by Aug. 31, but said he needed time to study the 87-page report before responding in detail on its findings.

"There is no hard cap. Obviously, that is good," Fehr said. "Hopefully, that issue is behind us."

The union agreed to a luxury tax for the 1997-99 seasons, but it affected only the top five teams by payroll each year at a rate of 34-35 percent and had only a slight drag on payroll growth.

Asked if that was a failure, commissioner Bud Selig wouldn't answer directly but said, "My 7-year-old granddaughter Marissa, I think she's already made that judgment."

During the 232-day strike, which wiped out the World Series for the first time in 90 years, the union resisted any attempt to impose a salary cap or a tax that would massively slow salary growth.

To back up its contention that disparity between the large and small markets has grown, the committee cited statistics showing that teams among the top 50 percent of payrolls won all postseason games in the last five years and that nine of the 10 teams in the World Series were among the top 25 percent of payrolls.

"I told the clubs today we're done making believe it doesn't exist," Selig said of disparity.

The suggestion that baseball study relocating teams is likely to stir the most debate. Baseball has not moved a team since the Washington Senators became the Texas Rangers after the 1971 season.

"If an area doesn't want to support a team, that answers itself," Volcker said.

Montreal, Florida, Minnesota and Oakland all have run into problems.

"Clubs that have little likelihood of securing a new ballpark or other revenue-enhancing activities should have the opportunity to relocate," Mitchell said.

For now, the committee opposed eliminating teams -- an idea being discussed by owners.

It also mentioned that moving additional teams to large markets -- such as New York, Chicago and Los Angeles -- "could serve to reduce the revenue disparity."

To support its contention that baseball has a growing revenue disparity, the committee released dozens of economic charts, showing the ratio of the payroll of the top seven spenders to the bottom seven increased from 2.6-1 in 1995 to 3.9-1 last year.

The Yankees, who have won two straight World Series and three of four, generated the most revenue last season, $177.9 million, while Montreal generated the least, $48.8 million.

According to the report, only the Yankees ($64.5 million), Cleveland ($45.9 million) and Colorado ($12.4 million) generated an operating profit from 1995 through 1999.

San Francisco's $97 million operating loss in 1995-99 was the highest, while Toronto lost $87.6 million and Anaheim lost $83.3 million.

As an industry, baseball had an operating loss of $212 million last year on revenue of $2.787 billion.

Giants owner Peter Magowan said much of his team's loss was due to expenses preparing for the construction of privately financed Pacific Bell Park, which opened this year, and he anticipated his ownership group would make that money back.

The panel recommended that players born outside the United States be included in the amateur draft, the the eight playoff teams lose their first-round draft picks the following year and that high school and college players be forced to declare themselves eligible for the draft, which would decrease their bargaining leverage.

It also said there should be an annual "competitive balance draft" in which the teams with the worst eight records take a non-40-man-roster player from a postseason team.