For the last few weeks, I've avoided coverage of the legal entanglements of baseball in favor of discussions of player transactions and organizational off-season moves. However, as yesterday was a somewhat slow news day, I find I now have the opportunity to comment on the ever-increasing avalanche of legal matters engulfing the game.

As it happens, although I intended to comment shortly after the House Judiciary Hearing on Baseball's Anti-trust Exemption, that article was never written. Tim and I watched the portion of the hearings broadcast on C-Span and listened to the remainder via the computer. I have to say that for me the most disturbing aspect of the hearings was the inability of committee members to combat the witnesses' question avoidance tactics, particularly those of Commissioner Selig. I'm sure it was especially frustrating for the Congresspeople who were less familiar with the background information in the case and were just attempting to find out information in order to form preliminary opinions.

One of the main issues of the hearing centered around a notice to the MLBPA by the Commissioner's Office that MLB would sue the union if they disclosed any of the information that was deemed confidential under their agreement. Steven Fehr, the union's representative at the hearings, ascertained that they had information that would be useful to the committee, but that they could not disclose this information for fear of lawsuits resulting from breaking their agreement with MLB. The representatives kept asking Selig to release the union from the agreement for the purposes of the hearing, saying that they wanted access to the information that Major League Baseball had given to the union. Selig responded by reiterating that the committee had all the information that the union possessed other than this year's audited books, which had not yet been completed. Technically, I believe Selig was correct. The information that the union was looking to disclose revolved around their own interpretations and explanations of what the MLB numbers meant.

Basically, the representatives were stuck asking the wrong question. What they really needed to request of Selig was permission for the union to discuss the figures in the context of all they know about the operating procedures of Major League teams. In order to understand what the numbers in the books provided by the Commissioner's Office meant, the committee would need to have a fairly detailed working knowledge of the intricacies of the game's economics. While they could obtain the majority of this information themselves through intense study and investigation, the process would be significantly time consuming and these are very busy people. If the union were allowed to discuss the books with the committee, they would be able to considerably cut down the time necessary to grasp their meaning. It's a case where there is really no reason for the committee members to have to reinvent the wheel in order to build the car.

Another question, phrased in multiple ways by different representatives and repeatedly dodged by Commissioner Selig, related to the reasoning behind contraction. While Selig was able to say that it was not the entire solution to baseball's economic problems but merely a key component, he never addressed the specifics of how it helped in any way. It is highly probable that his reasoning behind avoiding discussing the details revolved around the fact that contraction is basically a good way for baseball to generate some quick cash. The league has currently reached a point where further expansion at this time does not appear to make an overwhelming amount of sense. However, if two teams were contracted, then the league could authorize another expansion in a year or two and receive the subsequent cash infusion.

Instead of answering representatives actual questions, one of the points that the Commissioner made several times was that he felt baseball needed more revenue sharing and salary control than currently exists. As these things were subject to negotiation with the union, he heavily implied that the players association was standing in the way of economic progress. To my knowledge, this upcoming agreement will be the first time since revenue sharing was originally implemented that the two sides will re-negotiate their agreement, meaning that the union has not yet even had the opportunity to stand in the way of increases. While I doubt that they would be in favor of pooling all of baseball's revenues and distributing the proceeds evenly, I have not seen or heard anything to indicate that they would not be amenable to a sizeable increase in revenue sharing.

While I think that some form of revenue sharing could be a good idea, I don't feel that the highest grossing teams are actually obligated to contribute to the coffers of less wealthy teams. Revenue is generated as the result of game play. When there are obviously two organizations providing the product, the revenue from said project reasonably falls into a category subject to sharing. However, a good portion of revenues generated by the club's efforts such as merchandising, luxury boxes, and season ticket sales do not seem to be revenue that needs be shared. The later represent revenue streams that are all heavily influenced by an individual team's popularity. It's a free market economy and intelligent management can achieve a lot.

As for the owners having more control over player salaries, they theoretically have complete control right now. Free will says that without collusion they can all individually agree to just not pay more than they can afford. Of course there is the argument that in the current system some teams can afford a lot more than other clubs, however there are ways to level the playing field. I strongly disagree with the concept of a salary cap on individual player salaries and a salary cap of total payroll expenditures (to simplify things, lets refer to this as a payroll cap).

I've gone into this before, but I see no reason for the owners to be allowed to reform the system in a way that basically redistributes a significant portion of the wealth generated by the game from the players into their own pockets. The players are the product, they generate the revenue, and they should be the benefactors of their efforts. In short, since they bring in the bread and butter, they're worth the dough.

The owners already receive a significant portion of baseball's revenues for their own labors as management. Both salary and payroll caps punish players and eliminate large portions of their incentives to improve their performance. Incidentally, I also disapprove of minimum payroll requirements becoming attached to revenue sharing, as they would merely result in marginal players receiving salaries greater than they merit.

I am amenable to the idea of a luxury tax, as it is a system that acts to curb individual organizations from severely out-spending others. Meanwhile, it allows a level of flexibility not afforded by the other options in that a team can choose to pay the tax and acquire the player(s).

However, I don't believe that the theory will work effectively in practice without a broad reform of the way clubs operate. I sincerely believe that better management can significantly narrow the revenue gap between the smallest and the largest market teams. Winners make more money than losers. A team can achieve success through intelligent leadership without a large payroll, which will in turn lead to broader revenue streams, which should allow them to have the option of increasing their payroll. If an owner doubts the validity of such a claim or simply cannot manage to assemble the personnel to execute the strategy, they can always stimulate the process with outside infusions of cash. If they achieve success the results should be similar, although that's generally a bad practice in business.

One very necessary step towards good health for baseball's economics is for ownership to halt its attacks on the game. Fans were happy basking in the glory of a wonderful season and Series before ownership dragged that memory through the mud of this off-season. You would have trouble selling diamonds if you marketed them as crap.

Returning to the purpose of the hearings, we have the question of whether or not Congress should revoke baseball's anti-trust exemption. While I fully support Congressional action to insure that the owners are not allowed to contract franchises, I believe that the exemption should be left intact. Without the exemption, the minor leagues would almost certainly dissolve and aspects of baseball that still serve as a unifying factor would evaporate. Baseball would lose the elements that make it our national pastime and a downright patriotic endeavor. As a fan, I would rather put up with the parade of problems that the game currently faces than see that happen.

To be continued. . .