NEW YORK -- Baseball commissioner Bud Selig asked players
Wednesday to accept a luxury tax that would slow the increase of
salaries and proposed that teams vastly increase the amount of
local revenue they share.
Selig spoke for nearly four hours during Wednesday's bargaining
session at Major League Baseball's headquarters and explained
management's central economic proposals for a labor contract to
replace the agreement that expired Nov. 7.
Addressing eight players and lawyers from union and management,
Selig asked for a 50 percent luxury tax on the amounts of payrolls
above $98 million, according to three people familiar with the
meeting who spoke on the condition they not be identified.
Selig also proposed that teams put 50 percent of their locally
generated revenue, after deductions for ballpark expenses, in a
pool that is redistributed equally to all teams, up from 20 percent
this year.
The New York Yankees, who generated the most revenue among the
30 major league teams last year at $242 million, would pay an
additional $36 million to the other teams next year under the plan
Selig outlined.
Last season, when the Yankees generated $154.75 million from
tickets and local broadcasting, they paid $26.5 million in revenue
sharing, money that was redistributed to low-revenue teams. The
Yankees' total would increase to about $40 million this year under
Selig's proposal.
New York is projected to spend $143 million this year in
salaries and benefits for players on its 40-man roster, according
to average-annual-value method of valuation used by the
commissioner's office. The Yankees would have to pay a $22.5
million luxury tax under Selig's plan.
One management projection estimated the tax would effect four or
five teams next season.
In addition, Selig told players that owners would like a
worldwide draft, which would eliminate the ability of Cuban
defectors to become free agents and gain the leverage that has
gotten many multimillion contracts.
Both sides were guarded in their comments.
"Bud outlined his basic position, as did we," union head
Donald Fehr said. "There have been a lot of preliminary
discussions. Neither party was surprised. It was a workmanlike
initial meeting. I really don't want to characterize the substance
of the discussions."
Rob Manfred, management's top labor lawyer, called it "a full
constructive day."
Players are happy with the current system of free agency and
salary arbitration, which has existed with little change since
1976, boosting the average salary from $51,500 to $2.14 million in
a quarter century, a period in which baseball's revenue increased
from $182 million to $3.55 billion.
Under the labor agreement that covered 1996 to 2001, the union
agreed to a luxury tax for the 1997, 1998 and 1999 season, but
owners regarded it as largely ineffectual.
Only the teams with the five highest payrolls paid a tax, the
threshold for the tax was the midpoint between the payrolls of the
fifth- and sixth-highest teams, and the tax rate was 35 percent in
the first two seasons and 34 percent in the third.
At total of $30.6 million in tax was paid in those three years,
$10.6 million by Baltimore and $9.9 million by the Yankees.
Players who attended the session were Tony Clark, Damion Easley,
Jason Grimsley, Rick Helling, Al Leiter, Mark Loretta, Mike Myers
and Mike Stanton.
Manfred and Paul Beeston, baseball's chief operating officer,
had a series of two dozen informal sessions with the union from
March to June last year before Selig ended those talks.
Bargaining has been slowed by Selig's proposal to eliminate to
teams before the start of this season, most likely Montreal and
Minnesota. An injunction issued by a Minnesota judge forces the
Twins to play at the Metrodome this season, and the team and Selig
have asked the Minnesota Court of Appeals to lift it.
In addition, the union filed a grievance claiming contraction
violated the expired labor contract, which remains in force. That
hearing, before arbitrator Shyam Das, is scheduled to resume
Thursday.
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