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'Blue Ribbon Panel on Baseball Economics issues' report
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'Blue Ribbon Panel on Baseball Economics issues' report
 

Read the report

The Independent Members of the Commissioner's Blue Ribbon Panel on Baseball Economics today read their report recommending broad and sweeping changes to Major League Baseball's economic structure intended to close the gaping disparity between the game's "haves and have-nots."

Senator George Mitchell, a spokesman for the independent members, said, "The 18-month study left absolutely no doubt that large and growing revenue and payroll disparities exist in Major League Baseball, causing chronic problems of competitive imbalance. The economic data clearly substantiate the widespread notion that the problems have become much worse during the five complete seasons since the strike-shortened season of 1994 and seem likely to remain severe unless Major League Baseball undertakes remedial actions proportional to the problem."

The report, which discloses more verifiable financial data about MLB clubs than has ever been publicly released to date, offers a dramatic package of solutions. Among others, the report recommends: That clubs share at least 40% and perhaps as much as 50% of all local revenues, after local ballpark expenses are deducted, under a straight pool plan; A 50% competitive balance tax on club payrolls that top $84 million; A new "Commissioner's Pool" to distribute new Central Fund revenue to assist low-revenue clubs in meeting a minimum club payroll of $40 million; An annual competitive balance draft of professional players to provide the low-finishing clubs with more access to the best young talent; Where necessary, strategic franchise relocations to address competitive balance issues; and Implementation of reforms in the Rule 4 Draft.

"Baseball's current economic system has created a caste system in which only high revenue and high payroll clubs have a realistic opportunity to reach the post-season," Mitchell said. "That is not in the best interests of baseball fans, clubs or players."

The economic analysis set out in the report further indicates that the limited revenue sharing and payroll taxes approved as part of the 1996 Collective Bargaining Agreement with the Major League Baseball Players Association have "produced neither the intended moderating of payroll disparities nor improved competitive balance."

"The panel does not see itself as a mediator in the collective bargaining process but as an outside independent analyst for the game," Mitchell said. "I believe the report will stimulate objective analysis from the MLBPA and other interested parties and lead to productive discussions about baseball's economic future between the clubs and the Players Association."

Joining Mitchell, a former Senate Majority Leader, as independent members were Richard C. Levin, an economist and President of Yale University; Paul A. Volcker, former Chairman of the Board of Governors of the Federal Reserve System; and Pulitzer Prize winning commentator and syndicated columnist George F. Will.





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