Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, May 10, 1993 TAG: 9305100013
SECTION: SPORTS PAGE: B2 EDITION: METRO
SOURCE: JIM DONAGHY ASSOCIATED PRESS
DATELINE: NEW YORK LENGTH: Medium
Under the last agreement - a four-year, $1 billion deal with CBS - teams could count on splitting up $250 million each year. That's about $10 million per team, not including cable and local television rights.
But under the proposed package announced Saturday, baseball won't receive an up-front TV rights payment for the first time.
With the deal, reportedly a six-year agreement, baseball and its network partners will form a separate venture that "will be responsible for administering the product, and for the marketing and sales of major-league baseball," San Diego Padres owner Tom Werner said.
Neither baseball nor the networks wanted to guess at the new venture's start-up costs. And, it's uncertain just how much money each team will make annually from the deal, if any.
A cable deal is still to be negotiated, most likely involving ESPN, TNT or USA Network.
The problem, at least for the first year, is for the front offices to figure out how much money they have to work with. This could mean a difference in signing free agents or letting them go.
The Milwaukee Brewers, for example, make only $3 million annually from local TV and about $13 million from their share of the current national contracts with CBS and ESPN. If the Brewers lose $6 million or more from that total, it might mean either trading some of their high-priced players or letting others become free agents.
The Brewers had to let free agents Paul Molitor and Chris Bosio sign elsewhere after last season to keep the club's payroll in line with its shrinking revenues.
One of the solutions being discussed is revenue sharing. But owners in most major markets are not convinced it will work. Players union chief Donald Fehr asks why should the players, averaging more than $1 million a year, be asked to make givebacks when the owners can't even agree among themselves.
The owners will meet in Chicago on Thursday to vote on the TV package.
"This is the wave of the future," said Bud Selig, baseball's interim commissioner and owner of the Brewers. "We believe we have control over our destiny in this partnership. Baseball's been slow to react and this shows us to be proactive."
He still has to convince some other owners, though.
"I didn't buy into Pittsburgh or Milwaukee," Chicago White Sox vice chairman Eddie Einhorn told "Frontline" in a PBS program on baseball's troubled times. "How do I know what they will do with my money?"
Because of the new Comiskey Park, lucrative local TV deals and a successful marketing strategy, Einhorn and White Sox chairman Jerry Reinsdorf have turned the club into a profitable venture. A few years ago, the White Sox were minutes away from moving to Florida.
George Steinbrenner, in addition to his revenue from national TV, receives about $45 million a season from the Madison Square Garden network for the Yankees' local rights.
Reinsdorf also owns the Chicago Bulls, and revenue sharing has been very successful in the NBA. The NBA's rise also has a lot to do with commissioner David Stern's influence.
The main reason Fay Vincent was forced out was because the baseball owners, particularly Reinsdorf and Einhorn, did not want him involved in contract negotiations with the players. Selig, chairman of the executive council until a commissioner is selected, was also against Vincent remaining in office.
Having a big payroll hardly guarantees success, though. Just look at last season and the fifth-place New York Mets, last-place Los Angeles Dodgers and last-place Boston Red Sox.
Richard Ravitch, chief negotiator for the owners as president of the Player Relations Committee, says about 80 percent of a club's gross revenues will soon be paid for salaries.
"No club can afford to pay 80 percent of its gross because it has all the other expenses to meet," Ravitch said. "You're going to see the small-market clubs cutting their payroll from '93 on."
by CNB