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Whys and whats of a strike

By MARC TOPKIN, Times Staff Writer

© St. Petersburg Times
published August 30, 2002

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ST. PETERSBURG -- Baseball players and owners still were negotiating this morning in hopes of avoiding what would be baseball's ninth work stoppage in the past 30 years.

If there isn't an agreement by around noon today, the players say they are prepared to walk out.

While there are many unanswered questions, here are a few we have tried to answer:

Q : How did it come to this?

A: The union and owners have been negotiating a collective-bargaining agreement to replace one that expired in November. Though both sides claim to have made significant concessions, they have been hung up primarily on levels for revenue sharing and a luxury tax. The union two weeks ago set today as the strike date and says there won't be an extension. Realistically, the sides would have to reach a verbal agreement by around noon to prevent an interruption. The first game today is 3:20 p.m. EST in Chicago.

Q : Why now?

A: Players chose this date to threaten the usually lucrative Labor Day weekend crowds and to allow time to finish the season if there is a short strike. They claim to be sensitive to the public relations issues of being on strike during Sept. 11 anniversary events. Plus, the players have received most of their salary, while the owners get the bulk of their national TV money from the postseason games.

Q : What are they talking about?

A: Basically, money. Claiming they want to increase competitive balance between the large- and small-market teams, the owners (at least, most of them) want to increase the amount of locally generated revenue shared among teams and implement a "luxury tax" on the highest payrolls, essentially creating a deterrent, if not a restraint on salaries. The players don't really want to change anything with a system that has produced an average salary of $2.4-million but have agreed to some forms of revenue sharing and a tax. The remaining debate is over the percentages and threshold levels of the transfers.

Q: How would that work?

A: Briefly, management wants teams such as the Yankees that have huge local radio and TV contracts to share some of that revenue with teams that don't make as much in their markets, such as the Rays. The luxury tax would be a penalty for teams that exceed a predetermined level of payroll, functioning essentially as a deterrent. A team that goes over the limit would pay the tax into a fund that would be distributed to the small-market teams. For example, if the tax rate is 50 percent on the amount over $116-million, a team with a $126-million payroll would have to pay an additional $5-million (50 percent of $10-million) in tax.

Q : How close are they?

A: Pretty close. Specifics are being worked out, but as of late Thursday the owners were said to have proposed an initial threshold for the luxury tax of $115-million with the players countering at $118-million. Owners want to increase the amount of revenue shared to 36 percent, the players 33.3 percent with a gradual phase-in.

Q : Wouldn't a strike cost a lot of people a lot of money?

A: Millions, if not billions. If the rest of the season were canceled, players would lose about 17 percent of their salaries, about $337-million overall. That includes $34,000 for a player such as Rays rookie Steve Kent, who makes the $200,000 minimum, and $3.6-million for Alex Rodriguez, who makes a major-league high $21-million. Owners would lose about $400-million in revenues, according to the sports investment firm Moag & Co., though could recoup some by not opening the ballparks; and would have to provide a $300-million credit to the Fox network, which also has the option to seek an additional $230-million for damages. There would be trickle-down effects in each major-league city. And there would be residual damage for years in terms of soliciting sponsorships and setting advertising rates.

Q : Since the players lose so much money by striking, what would they gain?

A: It would, literally, be a preemptive strike. They would strike now because they have the leverage. Once the season ends, the owners could lock them out, declare an impasse in talks and seek to implement a new system.

Q : Hasn't there been some progress?

A: Yes. The sides agreed on a number of smaller issues and struck a deal for random testing for steroids. Plans for a worldwide amateur draft have been tabled. Contraction still could be an issue.

Q : If there is a strike, what do I do with the tickets I have to a Rays game?

A: The Rays have a policy regarding games that may be postponed or canceled because of a strike, but though some teams, such as the Blue Jays, have announced plans, the Rays won't release theirs until necessary. Most likely the team will offer refunds or the opportunity to apply the ticket value to an additional purchase.

Q : If they do walk out today, what happens next?

A: After a short break to assess their positions, negotiators may continue their talks. If one side, or even both, realizes that the strike is hurting them, they could quickly make a deal, with only a minimal interruption in the schedule.

In 1985, a settlement was announced one day after the strike started. Two days of games were missed and later made up. On the other hand, several owners have said if the players walk out they are prepared to keep them out for the rest of this season and even next season in an effort to reshape the game's economic system. The owners declared an impasse during the lengthy 1994-95 strike and sought to implement their changes, but the players stopped them with a court injunction. The owners might have a stronger hand this time because a Republican administration is less likely to favor the players.

Q : Could anything, or anyone, force them to make a deal?

A: President Bush, a former owner of the Rangers, said he won't get involved. The banks, which have loaned teams about $2.5-billion, might put some pressure on the owners to settle. But MLB president Bob DuPuy said the banks are protected because each team has a nine-month interest reserve.

Q : Wouldn't a strike affect a lot of people?

A: Though players and owners have been planning on a work stoppage, thousands of ordinary people would be impacted. There are about 550 people who work at a Rays home game, and there usually are charitable groups that raise money at games.

-- Times staff writer Mike Stephenson contributed to this report, which used information from the New York Times and AP.

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