Average salaries have soared to $4.2 million in basketball, $2.1 million in baseball, $1.4 million in hockey and $1.2 million in football.
At the same time, owners in baseball and hockey claim they’re losing millions of dollars. Average ticket prices in the four big team sports doubled over the past decade.
These facts raise two related issues: Do players’ fat paychecks lie behind sports’ economic stresses and strains? And should players sacrifice for the good of their sports by accepting salary caps, luxury taxes or other restraints aimed at holding down salaries?
Owners say they’re the victims of flawed economic systems that allow rich teams set the market for salaries, leaving poorer teams the unenviable choice of spending that makes little economic sense or languishing at the bottom of the league standings.
The players contend they’re just getting what they’re worth in the marketplace, even if the public perceives it as out-of-control spending.
“We don’t hold a gun to the owners’ heads,” said Ted Saskin, senior director of the National Hockey League Players Association.
The different views on player pay arose at the recent World Congress of Sports in New York, but the schism between owners and players isn’t just idle debate.
With Opening Day looming, baseball still hasn’t replaced the collective bargaining agreement that expired in October. Union boss Donald Fehr is telling players to brace for the worst – a work stoppage in baseball for the ninth time in 30 years.
The NHL and National Basketball Association are at least two years away from labor confrontations, but the NHL owners and NBA players already are sending signals of discontent.
“If I can do one thing in my lifetime, it would be to change the NBA labor system,” said Arn Tellem, the agent for Los Angeles Lakers guard Kobe Bryant and other NBA stars. “It’s a nuclear holocaust for players.”
As owner of the Phoenix Suns and Arizona Diamondbacks, Jerry Colangelo knows how to connect the dots on sports teams’ troubles with players’ pay.
Start with huge disparities in revenue among teams. Toss in owners’ desires to compete and fans’ demands for winning teams. Then give players freedom to seek the highest bidder.
That’s what sends salaries into the stratosphere, balance sheets into the red and owners to the bargaining table seeking restraints on labor. “You need an economic system that works,” he said.
Jeff Kessler, a lawyer who works with the National Football League and NBA player associations, says those who argue players’ pay drives up television rights fees and ticket prices have got it backwards. Higher revenues come first, then the higher salaries, he said.
And it’s the players who generate the revenue, including the big pot of television money. “The players create an awful lot of value for the leagues,” Kessler said. “If I went out and played professional basketball, there wouldn’t be much of a rights fee.”
Owners, seeing reckless bidding for free agents as the root of their economic problems, have been prodding for years to get new restrictions on players’ bargaining rights.
The NFL and NBA, both with salary caps, have won more restraints on players’ free agency than hockey or baseball.
In the current baseball negotiations, owners want to impose financial penalties on teams with the highest payrolls, figuring that will slow down the big spenders. They also propose to significantly increase revenue sharing in hopes that it will close the gap between rich and poor teams.
“It’s always more difficult in a labor negotiation for the party that wants to change the status quo,” said Rob Manfred, baseball’s executive vice president for labor and human resources.
Baseball players grew rich on free agency and they don’t buy the owners’ pleas of financial distress, so they’re countering with proposals with a lot less bite. “The players association will never agree to a salary cap, or anything close to it,” said Gene Orza, the baseball union’s associate general counsel.
In his second year at the helm of the Washington Capitals hockey team, Ted Leonsis is finding out the perils of free spending.
With a payroll of $34.5 million in 2000-01, his team won its division. Buoyed with optimism, he signed superstar Jaromir Jagr and jacked the payroll up to $53.1 million – but ended up with a team that will have to rally to make the 16-team NHL playoffs.
It’s a strange business. But there’s a book Leonsis wishes someone would write: Sports Ownership for Dummies.