The back page of U.S. News usually deals with the weighty affairs of governance, domestic public policy, national security, the economy and internal affairs. This is entirely appropriate: We regard your magazine as a serious-minded publication -- entertaining, informative and accessible but not much inclined to easy fad and fashion. But let's face it, folks, baseball is serious business and the current dispute between labor and management an example of an enterprise that is anything but free.
The facts of baseball's rain delay are hardly a secret. Club owners had sought a salary cap equal to 50 percent of baseball revenues, down from the 58 percent players now receive based on their current contracts. This, in theory, would especially help teams in smaller markets, which do not make the profits that big- market clubs do. Some, it is said, actually lose money despite robust attendance because their TV contracts aren't very lucrative.
With minor exceptions, the players wanted to maintain the status quo. And why not? They now average $1.2 million per man per year, a 25-fold increase since 1975. Even so, players argue that they are not overpaid given playing careers that average only six years. Their representatives also contend that the vast majority of ball clubs are prosperous, and independent analysis seems to support their case. One study by Stanford University economist Roger Noll says that teams "persistently understate financial performance" by as much as 8 percent and that Major League Baseball is "healthier than it was" a decade ago.
The third party in baseball's labor-management wars is the consumer. In effect, baseball is a cartel unfettered by regulators or much countervailing power -- a bit like the Organization of Petroleum Exporting Countries in the bad old days. In this particular business, consumers play a relatively passive role. For instance, they pay for fancy new stadiums underwritten by city bond issues -- money that might otherwise go to improve roads, bridges or sewer systems. Baseball also enjoys an exemption from U.S. antitrust laws; no one can enter the big- league-baseball business without the cartel's consent.
So against all that, assess baseball in business terms. The quality of the product is good (although for a true fan, never as good as when he was a kid), and demand remains high. But the accumulating evidence is that the enterprise -- management, and perhaps labor as well -- really doesn't give a fig for the consumer. Prices continue to rise: In many cities, it costs a family of four $100 or more to enjoy an outing at the ballpark. And this year, the cartel chose to dilute its product, dividing the 14 teams in each league into three divisions instead of two. This has undermined old rivalries and means that a team with a losing record could well win a division title, qualifying for post-season play. The ostensible reason for this was to stimulate even more excitement after the regular season ends. The real reason was pure bottom line: Post-season play for baseball is like December for retailers -- it's where the money is.
What to do? There is no shortage of sensible proposals to fix baseball. Henry Aaron, an economist at the Brookings Institution who probably dreams about the numbers recorded by the other Henry Aaron, suggests that TV marketing could be centrally controlled; this might actually increase overall TV revenues and allow more equitable sharing among teams without asking the players to support the poverty stricken. Another answer, of course, is to move some of the franchises, which have generally increased in value about 15 percent a year. If baseball cannot make it in Montreal or San Diego or Pittsburgh, there are many other cities willing to play host. And in keeping with the spirit of the North American Free Trade Agreement, baseball should look south of the border to Mexico as well as north to Canada.
Sadly, none of these will come to pass given the cartel's patent disregard for its customers. But consumers in other industries have changed the way business is done. Safer automobiles, improved food labeling, smoke-free flights: Each change has derived from consumer pressure. It's time for baseball's consumers to act, accepting some short-term pain for long-term gain. The best way is to boycott the product: Whenever baseball returns, whether it's this month or next spring, don't go to games and don't watch them on television. Just say no for at least a month, and maybe the greedy will turn needy.
