In a move almost certain to eliminate the Minnesota Twins and Montreal Expos, major-league baseball owners voted Tuesday to authorize Commissioner Bud Selig to fold two teams before the beginning of the 2002 season.
It marks the first time since 1899 that Major League Baseball has closed an existing franchise. This contraction ends a cycle of expansion in which the American and National Leagues increased their membership from a total of 16 teams in 1960 to 30, including two-team additions in 1993 and ’98.
“We’re plowing historic ground here,” Selig said. Owners met for more than three hours Tuesday afternoon at the O’Hare Hyatt Regency before taking a contraction vote, which Selig said passed “overwhelmingly.” Selig said the teams to be folded were not identified specifically during the meeting and that there are more than two under consideration.
Selig said owners decided it was time to eliminate the sport’s lowest revenue-producing teams, which have been subsidized partly with increased revenue-sharing means that were put in place after the strike that wiped out the 1994 World Series. Some markets, he said, have proved that they cannot support competitive teams.
“This has to do with a number of franchises that just can’t produce enough revenue to be competitive,” Selig said. “There are places with these problems in the past, present and the future, and this is the only way we can solve that problem.”
While the 9-year-old Florida Marlins and 4-year-old Tampa Bay Devil Rays are also viewed as candidates, it is the ownership of the Expos and Twins that is most interested in having fellow owners buy them out.
Twins owner Carl Pohlad, an 86-year-old Minneapolis banker, appeared to be walking away from the sport when he left via limousine after the meeting.
“It’s not easy,” he said. “After 15 years of work, it’s not easy.”
Both Pohlad and the Expos’ Jeffrey Loria would be well compensated. It has been reported that teams would be paid $250 million apiece to fold, but that could be among what Selig says are “myriad” details that remain to be finalized.
Open-ended process
Selig said there is no definite timetable for completing the process, which includes the dispersal of major-league players and a system to field co-op teams at the minor-league affiliates of the franchises to be folded.
“I don’t know,” he said. “I wish I knew . . . but this will be done expeditiously.”
According to major-league sources, Selig wants to have the process completed within one month. But given all the concerns, including realignment, scheduling and legal issues, it could take longer.
The loss of 50 spots on active major-league rosters as well as 30 more on 40-man rosters and more than 200 minor-league jobs did not go over well with the players union. Donald Fehr, executive director of the Major League Baseball Players Association, reacted strongly to Selig’s announcement.
“This decision has been made unilaterally, without any attempt to negotiate with the players, apparently without any serious consideration of other options,” Fehr said. “We consider this action to be inconsistent with the law, our contract and, perhaps most important, the long-term welfare of the sport.”
Baseball’s contraction comes at a time when management is beginning another round of labor negotiations with players, whose average salary has climbed from $1.168 million in 1994 to $2.264 million in 2001. The Basic Agreement expired at the end of the World Series. While Selig said Tuesday there will be no lockout or signing freeze, he also has expressed little interest in extending the previous contract for one season.
Larger chopping block?
Selig denied contraction is a bargaining chip. But he tried to deliver the strongest possible message to players, saying that many owners, “maybe even a majority,” were in favor of eliminating four franchises.
“At this time, [two] is enough,” he said. “But there is significant support for four.”
Selig hopes to work with Fehr to arrange the details of a dispersal draft that is expected to send players from Montreal and Minnesota to the other 28 teams, including the Cubs and White Sox, who would contribute $15 million to $18 million apiece. While owners believe they do not need the union’s approval to fold franchises, Selig concedes input is needed for the reassignment of players, many of whom have long-term contracts.
While Selig said teams would proceed as usual in pursuing free agents and making trades, it seems unlikely that there will be much movement of players before a dispersal draft. With teams able to fill many of their needs from rosters of the two eliminated teams, the free-agent market figures to suffer.
Not so long ago, the Selig-owned Milwaukee Brewers were among baseball’s suffering franchises. But the Brewers increased their revenue markedly after moving into Miller Park, a publicly financed stadium, in 2001. The Pittsburgh Pirates likewise were taken off baseball’s endangered list after moving into PNC Park last season.
Neither Minnesota, Montreal nor Florida has been able to secure public financing for revenue-generating stadiums. The Oakland Athletics also would like a new stadium.
“It makes no sense to be in markets that generate insufficient local revenues to justify the investment in the franchise,” Selig said. “The teams to be contracted have a long record of failing to generate enough revenues to operate a viable major-league franchise.”
Major League Baseball identified one franchise with local revenues less than 8 percent of the local revenues of the top club and less than 18 percent of the industry average. The Expos, who have no local television contract and averaged only 7,935 in attendance last season, reportedly generate about $16 million in local revenue, compared to the New York Yankees’ $200 million.
Problems with luxury tax
After the 1994-95 work stoppage, teams instituted a luxury tax that creates a revenue-sharing pool to assist weak franchises. The large-revenue teams paying taxes have criticized other teams, including the Twins and Expos, for not putting those subsidies into their payrolls.
“When you get into revenue-sharing, clubs are very sensitive to what other clubs do and do not do,” Selig said.
There are reports Montreal’s Loria will use his buyout to purchase the Florida Marlins from John Henry, who then will purchase the Anaheim Angels from the Walt Disney Co. Selig said no such arrangements have been made yet.
Selig considers the Milwaukee Braves’ relocation to Atlanta among the saddest events of his life. But he said he would not characterize Tuesday as a sad day for baseball.
“You’ll have to define why this is a sad day,” Selig said. “If that’s true, then in every industry in America that has made adjustments, it has been a sad day for them. Would you say that? I don’t because everything changes. My father always told me, `Everything changes.”‘
