Newspaper article St Louis Post-Dispatch (MO)

Players' Study Claims Owners Underestimated

Newspaper article St Louis Post-Dispatch (MO)

Players' Study Claims Owners Underestimated

Article excerpt

Major-league baseball's team owners have underestimated their potential profits for this year by between $150 million and $240 million, according to an economic analysis commissioned by the players association.

The 65-page report, obtained this week by The Washington Post, was prepared by Roger G. Noll, a professor of economics at Stanford University. Noll reviewed financial information provided to the players union by the owners' Player Relations Committee for 1991 through 1993, and projections for an uninterrupted 1994 season. The owners used the same data to draw up their revenue-sharing plan, which goes into effect only if the players accept a salary cap in collective bargaining.

The report states that the owners' expected revenue for this year have been underestimated by between $50 million and $140 million. In addition, administrative expenditures exceeded reasonable administrative costs by at least $100 million. The owners projected industrywide losses this year of $100 million in an uninterrupted season; therefore, according to Noll's report, baseball's profit actually would have been between $50 million and $140 million.

Richard Ravitch, chief negotiator for the owners, said he and the owners will study the report "very, very closely, and we will respond to it."

Among the report's other findings:

The owners' gloom-and-doom financial forecasts, which have led them to try to get the players to agree to a salary cap during these labor negotiations, are greatly exaggerated. "Baseball is financially healthy - healthier than it was in the mid-1980s, when detailed financial data were last made available - despite the decline in national broadcasting revenues," Noll wrote.

In 1993, baseball reported an industrywide profit of $50 million, and $100 million estimated in cash for its owners and investors each year once players' salaries and other operating costs are paid. …

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