Predicting that the average player salary will reach $250,000 this year, Commissioner Bowie Kuhn said yesterday major league baseball faces grave financial problems, and he asked Congress to make no changes in the sport's exemption from federal antitrust laws.
"Antitrust law is confused and demonstrably unsuited to treat with the practices of team sports and sports leagues," Kuhn told the House Judiciary Committee's subcommittee on monopolies and commercial law. "It would impose pointless expense on a sport that serves the public well and is in no condition to bear new heavy litigation costs."
But Marvin Miller, executive director of the Major League Baseball Players Association, urged the subcommittee to be skeptical of Kuhn's gloomy financial assessment.
"This has been going on for decades," Miller said. "The only thing that is consistent about it is that it is never done with verifiable facts and figures. You have to be more than a little suspicious of poverty claims that are unauthenticated."
Committee Chairman Rep. Peter Rodino (D-N.J.) and Rep. John F. Seiberling (D-Ohio) asked rhetorically how such sales in recent years as the Philadelphia Phillies for $34 million, the Chicago White Sox for $20 million and the Boston Red Sox for $15 million could be consummated if baseball faced such a dire financial outlook.
In the case of the White Sox, Kuhn said, "the deal included real estate, too. It was not just baseball. They are essentially buying futures, taking a gamble."
Yesterday's hearing was one of a series that began last summer in an extensive legislative inquiry into the application of federal antitrust laws to professional sports. No more hearings are scheduled, although the subcommittee could decide to call more witnesses.
Predictably, owners and commissioners of the professional sports leagues have argued for sweeping exemptions, contending their teams are not economic competitors but partners in the creation of a product: a sports contest. Critics have argued the leagues are monopolies whose operations inhibit free competition and trade.
Testifying in support of Kuhn yesterday was Jesse W. Markham, a professor at Harvard Business School, who told the subcommittee that for the years 1974 through 1980, major league baseball teams as a group showed a profit in only 1978, and the profit that year was only $5,000.
During the 1980 season, the last complete season, 10 clubs turned a profit while 16 operated at a loss, Markham said, and total losses offset total profits by $19.2 million.
The 1981 season was interrupted by a 50-day player strike, and Kuhn told the subcommittee the prognosis is bleak for 1982. "I cannot emphasize too strongly how serious this long-standing loss picture is," he said. "Moreover, the future is even more uncertain because of the continuing escalation in player salaries, long-term unfunded contracts and performance disincentives that are fostered by long, multiyear contracts."