Revenue Sharing Levels Field

Increased revenue sharing in the new baseball labor contract approved Friday won’t inspire the Oakland Athletics to keep pace with the power-shopping New York Yankees, and don’t expect the Minnesota Twins to suddenly toss around $105-million contracts and private jets.

The wide gap separating the wealthiest clubs from the pack won’t be bridged during the four-year agreement despite more money being transferred to low-revenue teams, and a payroll tax designed to discourage spending might not be as effective as many small-market owners hope. But the revamped system could provide an economic boost for well-run franchises and give mistake-prone teams a wider margin for error, and at least that’s a start.

“From our standpoint, the best thing that we could ever have is the ability to preserve what we have created,� Oakland General Manager Billy Beane said. “We’re not necessarily looking for a chance to compete for the greatest free agents, we just want to keep the guys we’ve developed.

“If [the new agreement] helps us do that in any possible way, if it even helps us come close to being able to do that, we’d all be satisfied. How much it could [help] will be revealed in the next couple of weeks, but it could be significant.�

Under the new agreement, each team contributes 34% of its net local revenue, after deductions for ballpark expenses, to a pool that is redistributed equally to all 30 teams. The amount of money transferred from the high-revenue to low-revenue clubs will increase from $169 million to $258 million, based on 2001 revenue figures, when revenue sharing is fully implemented under a phased-in plan. The Dodgers generated $119.21 million in revenue last season and the Angels $67.33 million.

Payout figures cannot be determined until revenue is calculated after the season, but small-market clubs will receive a far greater percentage of their bigger competitors’ profits. Owners demanded increased revenue sharing because they believe disparity in local revenue is responsible for the competitive gap between big-and small-market teams.

The Major League Baseball Players Assn., which contends that poor management is a bigger factor than owners concede, opposed revenue-sharing increases, in conjunction with a restrictive payroll tax, believing it was tantamount to a salary cap. But the union put aside its objections to complete a deal.

“It won’t help as much as good player development, good administration and good management,� said Gene Orza, the union’s associate general counsel. “It will help some because you’re redistributing a sizable amount of money, but competitive balance is a tricky proposition.�

Not according to owners.

The basic concept of revenue sharing is that the entire sport benefits if high-revenue clubs share their profits to enable low-end teams to spend more money on players, increasing competitive balance. Only five clubs from the two lowest payroll groups participated in the playoffs from 1995-2001, and all lost in the first round.

And of the 224 postseason games played during that seven-year span, teams from the top two payroll groups went 219-5. The 1998 San Diego Padres were the only club from a lower payroll group to reach a World Series.

Owners were rebuffed in their attempts to implement a minimum $45-million payroll, which the union considered to be another restraint on salaries, and management in turn shot down the union’s proposal to participate in monitoring how clubs spend their revenue-sharing money. The union sought to sanction clubs that it determined did not spend enough to improve.

Although the union would seemingly support all 30 clubs having a salary floor, it opposes any mandates on spending. The fear is that owners would eventually seek a hard cap in future negotiations if players open the door on this issue, saying the benefit of a payroll floor would be outweighed by a ceiling on the high-revenue teams that drive the market.

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Times staff writer Ross Newhan contributed to this report.