Edward Bennett Williams, owner of the Baltimore Orioles, plans to be in the forefront of a "majority of have not" baseball owners who, within the next year, will try to make vast and fundamental changes in the games's basic economic structure.
Williams, also president of the Washington Redskins, likens this possible brave new world of baseball to "the kind of fair and equitable across the board sharing of revenues between clubs that now exists in the NFL.
"Yes, socialism, in the same sense that pro football is now a very wealthy socialist game," says Williams, who estimates that there are close to 20 owners under enough financial pressure to endorse some or all of the measures he would urge on the sport.
Williams is just one of many voices within baseball's usually cautious management fraternity saying that the baseball "system" must undergo drastic retooling. The game's ownership, which last spring became more united in its arm-wrestling with the player's union, now recognizes that it must also reach a difficult consensus in an equally important area: how management can arrive at a more workable, less self-destructive partnership within its own traditionally divided house.
In a series of startling, almost unheard-of proposals among conservative baseball owners, Williams says he is in favor of vastly increased revenue sharing among teams, including: "equal sharing of all future cable TV monies, equal sharing of all new increases in local television and radio contracts, and large increases in our current level of gate-sharing."
In addition, Williams believes, and thinks he can encourage others to believe, that baseball can and should increase its revenues by adopting three-division play in each league (plus a wild-card team) and interdivisional play. Williams also believes that ultimately all TV contracts -- national and local -- should be negotiated by one executive within the commissioner's office and that all those revenues should be divided equally among the teams.
Williams advocates two even more radical notions. The second-year baseball owner says that baseball, to prevent teams from mortgaging their futures with multimillion dollar long-term contracts to players, most institute a system to "control the indebtedness structure of other clubs." Furthermore, Williams says, "The day is coming soon when baseball will be showing its financial books in public -- all of its books.
"Baseball's house is in disarray, and the time has come to put it in order," says Williams, an attorney and former treasurer of the Democratic Party who is working on president-elect Reagan's transition team. "The game's economic problems are dire, but it is going to be exhilarating solving them. The reason that they will be solved is that our difficulties are now so great that they must be solved.
"Whatever happens in our negotiations with the players union this spring over the issue of partial compensation -- and compensation is indispensable to baseball in my view -- it won't solve our basic problems."
Facts are what baseball has to face. Money facts, and their implications.
Facts such as these:
Dave Winfield of New York Yankees has a 10-year contract that can bring him as much as $25 million. Utility man Dave Roberts of Houston has a five-year, $1.2 million contract. The ripple effect of those signings will increase players' wages, which have already risen almost 200 percent (to an average big-league salary of $150,000) since the free agent era began in 1976.
Baseball's total future indebtness -- in long-term contracts, deferred payments and postcareer deals of the Winfield type -- is at least $300 million, and probably closer to $400 million. "What happens if, a year from now, Ted Turner (Braves owner) goes broke in his TV empire and George Steinbrenner (Yankee owner) gets hit by a truck?" says Chicago White Sox President Bill Veeck. "Those teams already have future debts in the $30-$40 million range. What's the market value of a franchise with that many obligations" Who'll buy the thing? And if the club has to declare bankruptcy, then who gets stuck for those future salaries? Nobody's got an answer."
The Atlanta Braves lost $3.4 million in '79. And, according to the commissioner's office, eight bottom-rung teams in '79 lost an average of $2 million apiece. As Williams says, "If the profligate spending of the few rich and irresponsible owners continues, then George Steinbrenner and Peter O'Malley (owner of the Los Angeles Dodgers) will have a play 162 games against each other because they'll be the only ones rich enough to survive."
The New York Yankees' gross income for '79 was roughly $27 million. By contrast, the total gross income of the Minnesota Twins was less than $9 million. "That means," says Hank Peters, Baltimore general manager, "that if the Yankees spend a third of their gross on player salaries -- and they're getting close to that right now -- they would have a payroll of $9 million. In other words, the yankees' payroll would be larger than the entire gross of the Twins. When such a situation exists, you have institutionalized an imbalance."
"We in management are united by our problems and divided by our solutions," says veteran General Manager Frank Cashen of the Mets. "Each club sees itself as a unique special case. For instance, Doubleday (Inc.) paid $21 million for the Mets last year, while Williams paid $10 million for the Orioles. Obviously, the worth of the franchise is largely determined by what market area you are in. Why would we want to share TV revenues or gate revenues when it's been proven in the past that our market has far greater potential than a city like Baltimore?"
No issue in Baseball gives off more heat than revenue sharing. Buzzy Bavasi, now Gene Autry's GM with the Angels, snaps, "Revenue sharing, hell, that's communism! Our game may be living on borrowed time right now, but we'll find a way up without that."
Of course, baseball now shares some revenue, but not nearly as much as the NFL. The NFL, for instance, splits all gates 40-60, while the American League does it 20-80 and the old-fashioned National League only gives the visiting team 50 cents a ticket. Baseball splits its national TV package 26 ways ($1.2 million per team), but it has no sharing in local TV revenues, which constitute a far larger pie. For example, the Yankees, Expos and Toronto Blue Jays, will in '81, all fall into the $5 million to $6 million bracket in local TV money, while teams like Kansas City and Cincinati pull less than $1 million a season.
Just as important is the huge, unexplored realm of cable TV. "I assume there are owners staying in baseball, trying to keep from selling, just to see how big cable TV will become," says the 25-year owner of the Detroit Tigers, John Fetzer, whose fortune was made in television stations.
"I's impossible to predict revenues down the road," said Fetzer, baseball's top expert on cable. "On one hand, cable is moving so fast that there's a technical innovation about every 10 minutes. Every projection about pay TV, so far, has been about five years too conservative. So, it's possible that some day cable income would bring in as much as the $6 million a year that NFL teams now get from their national TV package.
"On the other hand, the economy is so problematic that it would be rash to make predictions about what is basically a new industry still trying to start up."
A typical management position would be one like Bavasi's with ther Angels: "Financially, pay TV is the future of baseball. It may not be the network TV money bonanza that the NFL has now, but it'll be enough to make us whole."
Obviously, baseball, which is already in the midst of what Bowie Kuhn terms "the golden age of popularity," faces the double edged prospect of either having great riches for all or contracting severe "economic pneumonia" (another Khunism).
What will happen if baseball's relative havenots got the two-thirds vote in each league needed to change many basic revenue sharing plans?
"You'll see," says Cashen, "a good many law suits."
Is that so, Commissioner Kuhn?
"In that regard, I'd say Frank has a good feel for baseball," says Kuhn.
So baseball's battle lines are being drawn on many fronts. The first confrontation will be this spring's instant replay of last season's player-management showdown over the issue of partial compensation.
Both sides have done some useful deskclearing by eliminating distracting side issues. Now, the only labor issue on baseball's docket is compensation.
"The history of our negotiations is that everything always goes down to the last minute," said a source who is a member of the current four-man Joint Study Committee on Compensation, which will offer its reports Jan. 1."I'd like to say there's evidence of a change, but I can't."
Again, both sides are saber-rattling.
"Why should I believe Bowie's annual poormouth speech?" asks union leader Marvin Miller. "All I hear about is more and more loses and all I see is more and more capital gains. The open-market value of a franchise keeps shooting up every year. In the five years of free agency, we're seen 120 percent capital gains."
On the other hand, baseball's labor lawyer, Ray Grebey, says, also correctly, "We now have a situation with one-issue bargaining. That's the way I wanted it set up. The partial compensation rule is in place and they'll have to strike to get it out."
The solution to compensation is vital to both camps, but, as the waters of the free agent era get deeper, it is no more important than the other half of baseball's money maze: once the owners have dealt as best they can with their players, how are they going to solve the even more difficult problem of dealing with themselves?
"Baseball owners must wear two hats," says Tiger owner Fetzer. "We're both competitors and partners off the field. We're never learned how to wear both hats. We become so absorbed in competition that we've never been able to take the high road of public good and enlightened self-interest.
"As some of the game's old-timers, the patriarchs, die off, there may be changes," says Fetzer, 80. "As far as the various kinds of revenue sharing are concerned, I think there's soon going to be a Herculean effort to do that."
"Baseball owners may be the last of the great individualists," analyzes Miller. "It makes many of them go crazy to talk about cooperation.
"Baseball today has enough total revenue to be in great health," he asserts. "On the other hand, if they have franchises which are sort spots, couldn't they solve those problems internally? They have always maintained before Congress that they are partners first and competitors second. "The health of one is the health of all.' You'd think they would be enthusiastic about revenue sharing. The union would certainly not mind seeing that."
Ironically, neither would Miller's counterpart, Grebey. "Baseball's biggest problem in the next five years is going to be the nature of the ownership of the clubs," says Grebey. "Once, baseball had guys (owners) who needed each other and whose first goal was to help the game survive and prosper. In that way, the old individualistic baseball owners were like the new socialistic football owners. Now, however, we're seeing more selfish, ego-centered motivation from owners whose primary concern is maximizing their own profits in the short run.
"So, which type of owner are we going to attract to the game? Will our owners be a brotherhood willing to share more of their revenues, who are stable and civic minded, and who are tough united bargainers?
"Or are we going to see owners coming in for a lot of wheeler-dealer short-term ego gratification, who, if the team starts going sour, will take their capital gains profit after five years and run. I'm sure of one thing. Good solid people attract good solid people, and sharks attract more sharks."
Even Marvin Miller admits that "we are seeing owners now are like real estate speculators. They keep their cash flow low and even, try not to lose too much, then take their overall profit when they get our because the whole market has risen."
Baseball's current hot spot is the debate over what constitutes "solid people" and who might be a shark trolling into baseball's already roiled waters. AL owners decided this month that Edward DeBartolo had large sharp teeth and they rejected his $22 million offer to buy the White Sox.
"Baseball desperately needs new investment capital, yet it's the only industry I know that is scared of it when it knocks on the door," rumbles Chicago's Veeck. "The poorer owners were afraid of DeBartolo because they thought he'd be another high bidder for free agents and drive salaries up. Some of the rich owners, like Steinbrenner, who's a convicted felon and a liar, were afraid DeBartolo would give them too good a run for their money. So, they teamed up.
"Steinbrenner actually gave a speech endorsing DeBartolo, then turned around and voted against him. How long between the speach and the vote? Oh, two or three minutes . . . less time than the speech took," said Veeck.
The DeBartolo incident is one more example of how baseball's ownership considers its inner workings to be the key to the future health of the game. In the coming months, most of the game's fire and brimstone will center on compensation. Both sides will exaggerate. Grebey says the owners' compensation plan "would not cost the Winfields, Suttons and Porters a cent." Miller counters by saying the plan might, in time, depress player salaries by a third or more.
Baseball may be overly optimistic if it thinks '81 is the year for a labor breakthrough. At best, from their viewpoint, the players' union might accede to a one-year trial period for compensation, reserving the right to go back to the same battlements in '82 if it doesn't like the results.
What is indisputable now is that huge player salaries from six to seven figures are here to stay. As Cashen says, "We're still discovering all the loopholes and leverage that was in the '76 basic agreement. We get a new booby prize every season. Somebody on our side got out-smarted. The latest gimmick to squeeze more money is for players to ask for an up-front bonus so that they'll waive their right to veto trades, or, veto their right to demand a trade after their first season with a new club if they're on a multiyear contract. Sure, it's complicated. But it got Ted Simmons a million dollars extra when he was traded to Milwaukee. The club that got him and the club that traded him each kicked in $500,000, the way I heard it."
In such a fiscal game of hardball, even so large a topic as partial compensation is, in Kuhn's words, "just one stone in a wall we must build to stabilize the game."
That construction process will begin in earnest in '81. Baseball can probably agree on small ways to save a buck, like eventually buying a charter airline just to service the game. It's in the big money arena that the herculean struggle is going to be fought among owners.
"The rich in baseball have to stop dictating to the poor," says Edward Bennett Williams. "Do you know that, in the last agreement, the owners insisted on a provision that foreclosed and club from showing its operating statement at an arbitration hearing? Our position was that, in all cases, it's irrelevant. That's because the wealthy don't want to show their books. But what about the guys losing money? You think it's not relevant to them?
"As soon as our negotiations with the players are over this spring -- and we'll be more united than ever in that -- and next order of business is revenue sharing among ourselves. That's the promised land. And plenty of us are ready to start marching. I promise you that a majority of owners see this necessity."
"I can remember 20 years ago when I recommended a total sharing of TV revenue back at a winter meeting in Phoenix," says Veeck. "Everybody laughed, called me a communist and I didn't get one vote. The only person who contacted me was Bert Bell, the communist of the NFL. He said, 'Let's talk about that idea.' I didn't create the NFL system, but I was a part of it.
"We certainly need some of those ideas now. Nevertheless, I have confidence that our game will endure. I've lived through so many baseball 'watersheds' in my time and we've always come up on the other side."
Veeck seems almost nonplushed. "Because," he said, "it's the only game that's interesting. We can't sink baseball, no matter how hard we try. We'll muddle through."
No doubt. But this time it won't be easy.