Rolling a 7
Ryne Sandberg is a shy, unassuming guy who is a lock for the Hall of Fame. He doesn't drink, test positive, ram his wife's car, kick the dog, walk out of camp or say dumb things to the press. The most controversial thing he does is boot a grounder every 25 games or so.
Yet it was Sandberg, the elegant second baseman of the Chicago Cubs, who disturbed the peace of spring training last week. On March 2 he became baseball's first $7 million man by signing a four-year, $28.4 million contract extension that he called "pretty comfortable." Said the 32-year-old Sandberg at the press conference announcing the deal, "My face will be sore today from the smile."
Not smiling, however, are baseball's owners and general managers. "I've said for years that we're headed for Armageddon," says Al Rosen, G.M. of the San Francisco Giants. "But now we're past the gates. To the Four Horsemen of the Apocalypse—Famine, Pestilence, Death and War—we have added a fifth: Unmitigated Greed. It's going to do us all in. I can't see baseball surviving this."
Taking a somewhat lighter approach, Cub minor league batting instructor Richie Zisk said of the signing, "I heard the first call [Ryne] got was from George Bush to bail out the savings and loans."
The players were truly staggered—and delighted—by the contract. "Oooooh, what a deal!" said Oakland A's pitcher Dave Stewart, who makes a mere $3.55 million now but can be a free agent after the season. "Seven million, oh, man. A couple of years ago I never thought it would go that high. I figured it would get to five million and stop. Then I figured six million would be the end. But now there's no end in sight. The end is when the owners run out of money."
Stewart was being facetious, but the notion of owners running out of money is not farfetched. Should that happen, have no sympathy for baseball's moguls. They have only themselves to blame. Since Minnesota Twins centerfielder Kirby Puckett became baseball's first $3 million player, in 1989, the owners have played a risky game of leapfrog with the No. 1 salary. Only two years passed before Puckett's annual pay was nearly doubled by outfielder Bobby Bonilla, who became baseball's top-paid player when he signed a five-year, $29 million contract ($5.8 million per season) as a free agent with the New York Mets in December. Baseball knew that it wouldn't be long before it had a $6 million man. What it didn't know was that it would skip right over the $6 million barrier on its way to a $7-million-a-year salary.
And the guy who got it wasn't even eligible for free agency until after the upcoming season. Because Sandberg didn't want negotiations to interfere with his play, he and his agent, Jim Turner, imposed a signing deadline of March 1 on the Tribune Company, which owns the Cubs. If the deadline was not met, Sandberg promised to become a free agent in October. Obviously the threat worked, and Sandberg got what he wanted. So baseball executives are angered not only by the dollar amount of the contract but also by Turner's strategy. In other words, there's madness to the method.
"My three-year-old son could have made that deal [with Sandberg]," says Minnesota Twins general manager Andy MacPhail. "To jump from 5.8 to 7.1! That was absolutely stupid a year ahead of free agency. That's stupidity and timidity. Sandberg sets an artificial deadline and gets away with it! It's a terrible deal. We're going to spend ourselves into oblivion. I don't blame the players. It's the owners' fault. We keep giving it to them."
What also disturbs baseball people is that Cub general manager Larry Himes, a baseball man, wasn't a factor in the negotiations. When Chicago's top negotiator, Dennis Homerin, a lawyer for the Tribune Company, failed to close the deal in Mesa, Ariz., the Cubs' spring training base, by the anointed hour, the team's board chairman, Stanton Cook, another nonbaseball man, intervened at Sandberg's request. Cook wrapped up the negotiations in a matter of hours on March 2. "It's more money than you'd like to spend," says Cook, "but Ryne's a great athlete in great condition with a great history in Chicago. Value is in the eyes of the beholder. We felt we paid a fair amount for a player of his stature in today's market. If other teams felt differently, they wouldn't have signed him."
Besides, say the Cubs, the deal isn't really for $7.1 million a year. A $3.5 million signing bonus, payable in December, will be added to Sandberg's 1992 salary of $2.1 million—making 1992 worth $5.6 million. In '93, '94 and '95, Sandberg will make $5.1 million a year. In '96 he will make $7.1 million. There's an option clause for '97 worth $5.9 million; if Chicago decides not to exercise that option, it must buy out Sandberg for $2.5 million. There are bonuses built into the deal that could total $1.65 million over the life of the contract. The $28.4 million is arrived at by adding the guaranteed money in the four-year extension of Sandberg's contract, 1993 through '96, plus the signing bonus and the buyout. "They're kidding themselves saying it's not worth $7.1 million," says MacPhail.
The Cubs also defend the contract by pointing out that at $2.1 million for 1992, Sandberg is clearly underpaid. A peerless fielder and a career .288 hitter with 205 homers, Sandberg is, after all, one of the most popular players in Cub history (second perhaps only to Ernie Banks) and one of the best second basemen in the history of the game (second perhaps only to Rogers Hornsby).
But just because Sandberg has been a superb player doesn't necessarily mean he is a $7 million player. He will be 38 when his new contract expires in 1997, and according to a projection in The 1992 Elias Baseball Analyst, Sandberg may have already passed his peak. The statistical model has him hitting 12 home runs and batting .258 this year, down from 26 and .291 in '91.
Off the field Sandberg is not exactly a charismatic figure. One Chicago columnist wrote that Sandberg has the personality "of a Chia Pet." In his 10 seasons with the Cubs, Sandberg has never been considered much of a leader. He lives in Arizona in the off-season, and he has never been active in the Chicago community the way Puckett is in Minneapolis and Oriole shortstop Cal Ripken Jr. is in Baltimore.
Those two are mentioned because they can be free agents at the end of the 1992 season. If Sandberg can command $7.1 million a year, what can Ripken, who's 31, Puckett, 31, Pittsburgh Pirates leftfielder Barry Bonds, 27, and Texas Rangers rightfielder Ruben Sierra, 26, expect if they become free agents after this year? Not only are they all younger than Sandberg, but they are also equally as important to their teams.
Their teams, however, are not equally wealthy. The Orioles made a decent profit in '91, so they might be able to afford to re-sign Ripken for five more years at $8 million per. But what about the Pirates, who lost an estimated $7 million last season, and the small-market Rangers and Twins? Can Minnesota afford to lose Puckett, a .320 lifetime hitter and the most popular player in its history? Can the Twins afford to keep him? "This [Sandberg deal] doesn't change our balance sheet," says MacPhail. "We still have to do what's in our best interest."
And what about the Seattle—or Tampa Bay—Mariners? Ken Griffey Jr. is 22. He has hit more home runs (60) than any other active player under age 26. He's dazzling defensively. He has a magnetic presence. What is he going to get when he becomes a free agent after the 1994 season? The bidding starts at $10 million.
While baseball executives mutter about Sandberg's salary, representatives of the players' union point out that owners and general managers have been moaning the same tune since 1979, when Nolan Ryan became the first $1 million player (chart, page 18). Donald Fehr, head of the Major League Players Association, and Gene Orza, the union's associate general counsel, say they've heard it all before. "Al Spalding said the same thing in 1892," says Orza. "Players are paid based on revenues. Revenues go up, salaries go up."
However, even disinterested parties are forecasting trouble for baseball. Says Lawrence Kudlow, chief economist for the New York investment firm of Bear, Stearns & Co., "In the 1980s nobody thought you could pay too much for real estate, but by the end of the '80s that bubble had burst. Baseball is not immune to speculative bubbles that burst. Any business that continues to permit high cost increases year in and year out becomes a suspect business. Look at GM, at Ford."
Even now teams claim they're losing money. One owner says as many as half the teams might lose money in 1992. That's disputed by the MLPA, which says a profit-loss statement is not a true indication of a franchise's financial health. The Oakland Athletics, the American League champs in 1988, '89 and '90, say they lost $5 million to $6 million last season. They have 11 players eligible for free agency after this season, including Stewart, first baseman Mark McGwire and pitcher Dennis Eckersley. "We're overextended," says Oakland general manager Sandy Alderson. "If we have to risk losing a player to a team offering more, that's too bad."
Oakland is paying the high price of success. So, too, are the Atlanta Braves, who won the 1991 National League pennant. In going from worst to first in their division, they have seen their payroll jump from $20 million in '91 to $35 million in '92. "That might be the most telling indication of all," says Alderson. "That's after only one year of success."
So, where is all this heading? "For a conflagration," says Alderson. "I hate to sound like an iconoclast, but I'm almost happy to see these contracts. They will accelerate the process, so that the current system will change."
Indeed, baseball may need some sort of shock, perhaps a team's failing to meet its payroll or a franchise's folding. "I don't know if teams have to fold," says Rosen, "but I believe that in the next one to three years, outstanding players aren't going to have a market for their services, because clubs won't be able to bid. Anyone in his right mind can see that. I'm very concerned. I think Donald Fehr is equally concerned. He's an intelligent man. We can't keep our heads in the sand. We can't be ostriches forever."
Some heads have been popping out of the sand. Richard Ravitch, the new president of the Player Relations Committee, the owners' negotiating arm, is talking individually with teams. He says reopening the Basic Agreement after this season—a right the owners and players have as part of the labor settlement of 1990—is among many topics being discussed. The agreement doesn't expire until the end of the '93 season. Orza says the MLPA is preparing for a reopener.
If and when management sits down with the workers, the conversation will almost certainly get around to arbitration, which the owners consider the bane of their existence and the players consider their divine right. The only way for the two sides to bridge that chasm will be for them to come to this conclusion: We are all in the same boat. If we don't come up with a workable system along the lines of the NBA's system of salary caps and a guarantee that players will receive a set percentage of revenue, we are going to sink when the national TV contracts expire in '93. Says Gerald Scully, an economics professor at the University of Texas at Dallas and the author of The Business of Major League Baseball, "It's safe to say that there isn't going to be massive growth in the new TV contract. Revenue growth is coming to a screeching halt, and so will the growth in players' salaries."
But as one general manager points out, "Before we go to the players, we have to go to ourselves first." The owners' first priority must be to control their spending habits without resorting to collusion. Then they have to find a solution to the civil war between big-and small-market teams. It's not fair, say the small teams, that the Yankees get $42 million a year from their local radio and TV packages, while the Mariners get $1.5 million. A committee is studying the problem.
"Fewer than 10 teams are able to compete for the top names," says Alderson. "Does that guarantee they'll win? No. But it does create a higher probability. There will always be teams like the '91 Braves—that's what makes the game great. But you can't do it with an $8 million payroll."
Teams are already cutting payrolls by not offering contracts to proven major leaguers. Approximately 150 players with big league experience are in spring camps as nonroster players, including such established performers as outfielders Phil Bradley and Pete Incaviglia, infielders Brook Jacoby and Al Newman, and pitchers Doug Jones and Bill Krueger.
"The bottom 50 percent of major leaguers have become victims in all this," says Alderson. "Clubs are going to fill in around their top-paid players with young guys who aren't making much money. The Players Association could have as big a problem on its hands as the owners do. The dichotomy between the top players and the others could lead to unhappiness. I'm just speculating, but it could change the membership of the union."
For now, the union's membership is happy. The average salary for 1992 is expected to top $1 million. Life is good. Says Stewart, "If they are going to pay it, I'm not going to say, 'No, thanks, I don't want it.' Players are always made to look bad, like we're greedy, unhappy, unsatisfied. It's really not like that. It's the market. Put your name in the hat, and the owners bid. We're like a prize piece of crystal, a prize bull at an animal auction. The owners don't care how much they're paying; they want to get the best for their money. We're being bought. It's not our fault."
It's not Sandberg's fault that the Tribune made him the richest player in history. With that title should come pressure. But two days after signing, Sandberg said, "I'm in a state of relief. I've never thought about that pressure."
Maybe there's no need to feel pressured. Pretty soon someone else will be making more.
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