NEW YORK - Major League Baseball's claim of widespread financial disaster in the sport "is pure fiction," Stanford economist Roger G. Noll says in a study commissioned by the players union.
A copy of the report, in which Noll says baseball is financially healthy, was made available Wednesday to USA TODAY by the Major League Players Association.
The report was distributed Monday to all 28 owners who are asking the players for a salary cap that is tied to a revenue-sharing program of their own. The salary-cap proposal, submitted June 14, has been rejected by the union and has led to the strike, now in its 14th day.
Noll conducted his study after being provided the confidential data all 28 teams gave the union.
"The overall financial picture for baseball is better than the cash-flow analysis reveals," Noll writes. He estimates "the net benefits to owners from baseball operations averaged $250 million annually during the period 1991-93."
Said Boston Red Sox CEO John Harrington, himself a certified public accountant: "Noll is a paid consultant to the union, has been a long-standing paid consultant to the union, and he has expressed certain opinions in the report I disagree with." He was paid to reach those conclusions, and it was a very biased report."
Among Noll's findings:
-- Baseball is financially healthy, more so than in the mid-1980s, when detailed financial data was last made available.
-- Many small-market teams are consistently profitable, and no city in baseball is not a viable franchise site if it has good management, a reasonably good stadium and a realistic stadium lease.
-- The most recent national broadcasting contracts were worse for baseball than they should have been, reflecting poor business judgment on the part of management about the long-run attractiveness of their product to broadcasters.
-- Revenue sharing among clubs in baseball is inadequate, especially in the National League.
-- Total player compensation in professional baseball, contrary to widespread belief, is not increasing faster than revenues and is not causing a decline in the financial status of the sport.
"Mr. Noll says there has not been any significant variation in the relationship of player costs to revenue in the game," owners' negotiator Dick Ravitch said. "That's not true. Compensation was 42 percent of the gross revenues in 1989 and 58 percent in 1994. The numbers are fully available."
