Friday, January 18, 2008

Bud Selig – the best and/or the worst of times

Thursday was either a blessing or a curse for Major League Baseball. Bud Selig who has served as Major League Baseball’s commissioner in one forum or another since 1992, signed a three-year extension through the 2012 season. If Selig retires when he turns 78 in five years, he will have reigned over America’s so-called ‘pastime’ for 20 years. Given that MLB owners originally anointed Selig as an interim commissioner after firing Fay Vincent in 1992 before hiring Bud fulltime in 1998, the story of Allan “Bud” Selig’s rise to baseball’s top post is remarkable.

"My optimism about the future of Major League Baseball has never been greater," Commissioner Selig said. "Through the hard work of many, our great game has made many meaningful strides. We have achieved unprecedented labor peace, competitive balance, record attendance, business performance and exciting international growth. I am truly grateful for the incredible fan interest that the game has inspired. This is a golden age for our national pastime.

"What will continue to be paramount to me is the protection of the integrity of the game. Major League Baseball unconditionally embraces its enormous social responsibilities. The sport faces important challenges, and we will not rest until they have been met."

The Executive Council unanimously placed the Commissioner's extension in nomination before the assembled owners.

George M. Steinbrenner III, the principal owner of the New York Yankees, said: "In my 35 years in the game, baseball has never had better leadership than it does right now. Bud's ability to bring people together has steered the game to remarkable popularity and prosperity, and I am very pleased that he will carry on as Commissioner for the next five years."

William O. DeWitt, Jr., the Chairman of the Board and General Partner of the St. Louis Cardinals, said: "Commissioner Selig remains the perfect choice to lead our industry, to maintain the extraordinary heights that the game has reached and to continue its growth. The Commissioner's passion and reverence for the game resonate as strongly as ever, and those are the very qualities that have driven the game to its current popularity, which is also greater than ever."

Added Houston Astros Chairman and Chief Executive Officer Drayton McLane: "Bud Selig has brought much needed leadership and stability to the Commissioner's Office and has advanced the game in ways that many had believed to be impossible. He is the best Commissioner the game has ever had and his record of accomplishment will continue to grow in the years ahead. Baseball is fortunate to have him."

Having presided over the sport since 1992, Selig already has the second longest term of any Commissioner in baseball history. Only Commissioner Kenesaw Mountain Landis, who held office from 1921-1944, served longer. This marks the third three-year extension for Commissioner Selig. The previous extensions from the Major League Clubs came on November 27, 2001 and August 19, 2004.

Major League Baseball has now set its single-season attendance record for four consecutive seasons, culminating in 79,503,175 fans in 2007. Gross revenues have increased from $1.6 billion in 1992 to $6.075 billion in 2007, a rise of 280 percent.

Among Commissioner Selig's accomplishments are the following:

• By the end of the current collective bargaining agreement (expiring in December 2011), baseball will have gone 16 years without a strike or a lockout, the longest period of labor peace since the inception of the collective bargaining relationship.

• In August 2002, Major League Baseball and the Major League Baseball Players Association successfully concluded negotiations for a new labor pact without a work stoppage for the first time in more than 30 years.

• In November 2005, MLB and the MLBPA agreed to a 50-game suspension for a first-time offender of the Joint Drug Prevention and Treatment Program. A second offense draws a 100-game suspension and a third offense calls for a lifetime ban. The agreement also provided for random testing for amphetamines for the first time.

• MLB has entered into collaborations with the Partnership for a Drug-Free America, the Taylor Hooton Foundation and the Partnership for Clean Competition, a new effort by the U.S. Olympic Committee and the U.S. Anti-Doping Agency.

• Significant economic reforms - including the debt-service rule, the expansion of revenue sharing and the introduction of the luxury tax - have dramatically improved competitive balance. There have been seven different World Series Champions over the last eight seasons. Since 2002, 10 different Clubs have earned the 12 available World Series berths. Over the last two years alone, half (15) of the 30 Major League Clubs have earned the 16 postseason berths.

• The implementation of the Wild Card, the six-division format and Interleague Play has proven enormously popular with baseball fans.

• By the opening of the 2008 season, 16 new ballparks will have opened during his time in office, while other clubs have plans for new ballparks in development.

• In 2006, MLB and the MLBPA partnered to hold the inaugural World Baseball Classic, the most important international baseball event ever ventured.

But while that may well be the glass is half full look at Selig’s reign, any look at how effective Selig has been as MLB commissioner needs to also include the 1994 players strike and baseball’s steroid era – that hopefully will be coming to end in the near future with the release of the Mitchell Report, the implementation of Mitchell’s recommendation and the subsequent fallout that has included this week’s Congressional hearings and the February 13, 2008 hearings which will focus on many of the players named in the Mitchell Report.

Soon after Vincent was hired to replace the late Bart Giamatti as MLB’s eighth commissioner, Selig became an increasingly vocal opponent of Vincent, and soon became the leader of a group of owners seeking his removal. One of the issues that was front and center during the few short years Vincent served as commissioner – the fallout from the multi-million dollar settlements MLB owners were forced to pay the MLBPA after the owners were have found to have colluded to force player salaries down during the late 1980’s (the last few years of Peter Ueberroth’s period as commissioner).

Selig, then the owner of the small market Milwaukee Brewers, never stated that the owners colluded, while Vincent has: “The Union basically doesn’t trust the ownership because collusion was a $280 million theft by Selig and [Jerry] Reinsdorf of that money from the players. I mean, they rigged the signing of free agents. They got caught. They paid $280 million to the players. And I think that’s polluted labor relations in baseball ever since it happened.”

Following an 18-9 no-confidence vote in September 1992, Vincent resigned. Selig had by this time become chairman of the Executive Council of Major League Baseball, and as such became de facto acting commissioner.

The 1994 Major League Baseball Strike was the eighth work stoppage in baseball history, as well as the fourth in-season work stoppage in 23 years. The 232-day strike, which lasted from August 12, 1994, to April 2, 1995, led to the cancellation of 938 games overall, including the entire 1994 postseason and World Series. The cancellation of the 1994 World Series was the first since 1904; meanwhile, Major League Baseball became the first professional sport to lose its entire postseason due to a labor dispute. (a little more than a decade later the National Hockey League took it one step further becoming the first sport (during the 2004-05) to toss an entire season down the toilet.

Owner representative Richard Ravitch officially unveiled the ownership proposal on June 14, 1994. The proposal would guarantee a record $1 billion in salary and benefits. But the ownership proposal also would have forced clubs to fit their payrolls into a more evenly based structure. Salary arbitration would have been eliminated, free agency would begin after four years rather than six, and owners would have retained the right to keep a four or five year player by matching his best offer. Owners claimed that their proposal would raise average salaries from $1.2 million in 1994 to $2.6 million by 2001.

Major League Baseball Players Association leader Donald Fehr rejected the offer from the owners on July 18. Fehr believed that a salary cap was simply a way for owners to clean up their own disparity problems with no benefit to the players. Many observers believed the strike put Fehr in over his head.

As negotiations continued to heat up, the owners decided to withhold $7.8 million that they were required to pay per previous agreement into the players' pension and benefit plans. The final straw came on June 23 when the Senate Judiciary Committee failed to approve an antitrust legislation by a vote of 10-7.

According to Donald Fehr, the action left the players with little choice but to strike. "We felt in '94 we were pushed into it," said Donald Fehr, executive director of the Major League Baseball Players Association. "I still think that's a justified conclusion."

On July 28, the Players Association executive board approved of August 12, 1994 as the date for a strike.

On August 31, three-and-a-half hours of negotiations with federal mediators produced no progress in the strike, and no further talks were scheduled as the strike went into its 4th week. According to then-acting commissioner Bud Selig, September 9 was the tentative deadline for canceling the rest of the season if no agreement was reached between the owners and players. The MLBPA offered a counterproposal to ownership on September 8 calling for a two-percent tax on the 16 franchises with the highest payrolls to be divided among the other 12 clubs. Teams in both leagues would share 25% of all gate receipts under the MLBPA's plan. The owners responded by claiming that the measures wouldn't meet the cost.

The rest of the season, including the World Series, was called off by Bud Selig on September 14. Selig acknowledged that the strike had torn an irreparable hole in the game's fabric. The move to cancel the rest of the season meant the loss of $580 million in ownership revenue and $230 million in player salaries. In 1994, the average MLB salary was an estimated $1.2 million.

The bad news: the cancellation of the 1994 World Series regardless as to how MLB spins the tale will forever be a blight on MLB and on Selig’s legacy. The good news: since 1994 MLB has enjoyed labor peace. And in fairness Selig has to receive his share of the credit for that labor peace.

In terms of baseball’s “steroid era” and the subsequent fallout before passing judgment on Selig or anyone associated with this period in baseball history its important to consider the following:

Every sport whether or not they’re prepared to admit it has athletes who will do whatever they have to do to get ahead. Sports so-called steroid era may have begun after Ben Johnson was failed a drug test after winning the 100 meter dash at the 1988 Seoul Games, but as has been well documented Johnson was the one who got caught – not the only abuser that fateful Friday in Seoul.

Sports generate more than a half-trillion dollars annually today – the system that rewards excellence has set itself up for abuse.

Consider you’re a fifth year offensive lineman for a National Football League franchise. The team you’re a member of uses their second round pick to draft a bigger and faster offensive lineman from the college ranks in that April’s NFL draft. If you’re that player and your choice is to retire (and give up earning more than a million dollars a year) or take performance – enhancing drugs to level the playing field what choice would you make?

The same rationale applies to any sport. Sports fans (and media pundits) are only fooling themselves if they believe the sport they cover or follow is immune to abuse). Now that in no way makes it acceptable that sports has evolved into an unfair playing field where the athletes with the best chemist wins – but that is very much an unfortunate reality.

Selig along with Donald Fehr and Senator George Mitchell appeared before a Congressional committee earlier this week. Being an effective public speaker has never been one of Selig’s strong suits. Bud Selig isn’t what the three commissioners of the other sports (Roger Goodell, David Stern and Gary Bettman) lawyers and/or accomplished public speakers. At the same time Bud has an intangible what Stern and Bettman don’t have – like Goodell (in just his second year as NFL commissioner) an unbridled passion for his sport. What can’t be denied when it comes to Bud Selig – he loves baseball and has a deep care for the welfare of the sport.

Those sentiments aside – Bud’s reaction to the Mitchell Report and the resulting negative fallout are classic examples of letting one’s emotions get the best of their decision making process. So much attention is being focused on the names mentioned in the Mitchell Report (with Roger Clemens leading the way) and not enough of the focus has been on what the Mitchell Report should have accomplished.

Baseball as noted earlier like every sport is destined to being forced to accept an era where performance-enhancing drugs will be a blight on the sport. As long as owners are willing to pay salaries based on performance athletes will abuse the system. You can test athletes as often as you’d like, find a non-evasive test for HGH but as soon as a chemist discovers another drug that can beat the latest drug test (building the best mouse trap) athletes will abuse the system. The system invites abuse, more systematic of an industry that has become one of the leading economic sectors today.

And consider the Associated Press reported Thursday: baseball's average salary rose 4.6 percent last year to a record $2.82 million, and the New York Yankees set a high for teams at $7.47 million.

Final figures released Thursday by the Major League Baseball Players Association showed the rate of increase in the major leagues was nearly half the 9 percent rise in 2006. Still, the average salary appears on track to break the $3 million barrier this season. The economic system that has been created (rewarding success with bigger contracts) invites abuse of that system in order to achieve those results.

"That is, again, a manifestation of how popular the sport is," Selig said Thursday after he was given a three-year contract extension through 2012. "It's grown so dramatically in every way. So when I use those numbers, I use it not to talk about how much money we're making as much as this is how big the sport has gotten."

When Selig told Senator Mitchell it was OK to name names in his report it opened the door to the witch-hunt it has become. One doesn’t have to read between any lines in the Mitchell report to understand the names from the report are directly linked to an FDA string that focused on an Orlando based Internet pharmacy and a post office box in Albany, New York. Let’s not fool ourselves – the abuse and use of performance enchantment drugs extends well beyond the 86 names in the Mitchell Report. Well respected Houston Chronicle baseball writer Richard Justice estimated that he believed the figure was much closer to 40 percent.

It may have come as a surprise to some to learn Selig had agreed to a three year extension of his current agreement when you consider Bud indicated during the December 2006 Baseball Winter Meetings he intended to retire when his current contract would have ended in 2009.

"My contract is going to be over. I'm going to be 75 years of age. I want to teach — I've already had some great offers — and want to write a book," Selig said at the time. And that was a position Selig had for much of 2005 and 2006 – his plan to retire after the 2009 season.

In April 2003, Selig said he would leave at the end of 2006.

"I think that will be enough. There's no question, because there are other things I really would like to do," he said then.

In August 2004, he accepted an extension through 2009, when he will be 75.

"I had a series of owners who asked me after that time not to close my mind, and they were a little surprised that I had said that," Selig said at the time that extension was announced. "Once they have articulated that, I believe that my responsibility and my feeling for the sport is such that I want to do what they think is in the best interests of the sport. ... I finally felt it was the right thing to do."

Will Selig finally retire at the end of the 2012 season when he’s 78? If history has taught us anything when it comes to Bud Selig – don’t count on Selig stepping down anytime in the near future.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report:, Wikipedia, and the Associated Press

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