|Wednesday, December 5
Updated: December 6, 2:37 PM ET
Selig presenting testimony to Congress today
ESPN.com news services
Baseball had an operating loss of $232 million this year, including a major league-leading $52.9 million by the Toronto Blue Jays, according to a report that will be given to Congress on Thursday.
Commissioner Bud Selig, summoned to testify Thursday before the House Judiciary Committee to explain the need to eliminate two teams by next season, released an unprecedented amount of financial information on the 30 major league teams.
"Although revenues continue to grow, so do losses," Selig said in testimony prepared for the committee. "It has also become clear that there are clubs that generate so little in local revenue that they have no chance of achieving long-term competitive and financial stability."
While the Arizona Diamondbacks were a success on the field, winning the World Series in just their fourth season, they were a bottom-line bust, with an operating loss of $32.2 million, according to the report, obtained Wednesday night by The Associated Press.
That was the third-highest operating loss in baseball, trailing only Toronto and Los Angeles ($45.3 million).
The report also showed an additional loss for all teams of $112 million in interest costs, which includes borrowing to fund team's payments for new ballparks.
An additional $174 million is added in amortization -- essentially depreciation of a portion of teams' asset value -- resulting in an overall loss of $519 million, the report said. Baseball's operating loss came on record revenue of $3.5 billion.
Baseball commissioner Bud Selig is to present the report, which includes unaudited, forecasted profit and loss statements for 2001 for all 30 teams, along with other financial breakdowns when he testifies Thursday before the House Judiciary Committee in Washington.
Eleven of the 30 teams had operating profits before revenue sharing and only five teams were in the black, led by the New York Yankees at $40.9 million. Seattle was second at $34.3 million, followed by San Francisco at $19 million and Milwaukee at $14.4 million.
After revenue sharing only the Chicago Cubs, Kansas City Royals, Brewers, Yankees and Mariners finished in the black.
According to documents obtained by USA Today, only the Yankees and Cleveland Indians operated profitably during the 1995-2001 period while baseball had operating losses of $1.38 billion. The Yankees, who were in the World Series five times during the period, had profits of $93.6 million. The Indians earned $39 million.
Legislation to eliminate baseball's 79-year-old antitrust exemption was introduced in the House and Senate following the vote by major league owners last month to eliminate two teams before next season.
While no teams were selected, the Montreal Expos and Minnesota Twins are the likely candidates, and Minnesota's congressional delegation pushed for the hearing.
Montreal had an operating loss of $38.5 million, which was cut to $10 million after revenue sharing -- money redistributed from baseball's high-revenue teams to low-revenue clubs. Minnesota had an $18.5 million operating loss, which became a $536,000 operating profit after the revenue sharing money was redistributed.
The Yankees paid $26.5 million in revenue sharing, the most of the 30 teams, cutting their operating profit to $14.3 million on revenue of $242 million.
Baseball's operating loss, while high, was not a record. In 1994, when players struck in August and the World Series was canceled for the first time in 90 years, the sport had an operating loss of $363.7 million, according to records previously obtained by the AP (and provided by MLB).
In 1995, the first year after the strike, the industry lost $326.3 million on operations, a figure cut to $197 million the following year as business began returning to normal.
Congress, which historically has deferred to baseball owners, is not likely to pass a baseball antitrust bill anytime soon, and President Bush -- the former controlling owner of the Texas Rangers -- hasn't expressed an opinion.
In the meantime, the introduction of the legislation set the stage for another trip to Capitol Hill by Selig, who has clashed with congressmen at several hearings in recent years.
Selig didn't seem to help matters Tuesday, when he notified Rep. John Conyers (D-Mich.) that baseball would not provide team financial data before the meeting Thursday, the Washington Post reported.
Conyers, the ranking minority member of the House Judiciary Committee and sponsor of the House bill, hoped the committee could get a head start on the numbers. "We had hoped that he would provide us with the financial statements so we could scrutinize them in advance, so we could at least have an honest discussion about them," Conyers told The Post.
The Players' Association is often dubious of claims of losses, and union head Donald Fehr is expected to respond to Selig at a news conference Thursday in Irving, Texas, where the players' executive board is meeting. While the figures haven't been audited, baseball's early accounting has usually been within 5 percent of the final totals.
"The idea that somehow what I have presented today is not an accurate picture of the industry's economics is sheer nonsense," Selig said in his prepared testimony. "It is disappointing that union head Fehr is not here to verify my statements, but anyone who would state otherwise is just plain misinformed or is engaged in deliberate misstatement."
Owners want major concessions from the players' union, as they have had in each negotiation since the 1976 labor contract that created the current system of free agency and salary arbitration.
Selig claims the Twins need a new ballpark to survive, but the Minnesota Legislature has failed to support public financing.
Minnesota Gov. Jesse Ventura, who has opposed a publicly funded ballpark but has been more supportive in recent weeks, also is scheduled to testify. The other witnesses are Twins president Jerry Bell and Steve Fehr, the brother of the union leader and a player agent.
Since the 1922 U.S. Supreme Court decision creating the antitrust exemption, Congress has altered it just once. In 1998, lawmakers approved a bill that President Clinton signed that made labor relations of major league players subject to antitrust laws.
But the change meant little because the Supreme Court ruled two years earlier that unionized employees may not file antitrust suits.
The Associated Press contributed to this report.