Talk of an impending December lockout in Major League Baseball has given way to more recent news revolving around the financial plight of Los Angeles Dodgers owner Mark Walter. The Dodgers’ owners is now being investigated by the federal government “for allegedly failing to properly disclose billions of dollars in related-party loans made with funds from his insurance companies,” according to reports.
There’s nothing but speculation to go on at this moment, but any time there’s a federal investigation… it’s not a good thing.
This situation will most likely play out in board rooms – or in the courts, if it goes poorly for Walter. But the immediate question is this: How will Walter’s – and by extension, the Dodgers’ – touchy money situation impact the continuing Major League Baseball collective bargaining talks? MLB’s current agreement between the owners and the player’s union expires at midnight on December 1st.
Walter was, until very recently, also part-owner of the Los Angeles Lakers. He was forced to sell his $12.5 billion stake in the NBA franchise in order to start to raise the staggering $20 billion he needs to pay debts he owes by the end of the calendar year. He also reportedly sold his share of the Chelsea professional soccer franchise. Whether or not he will be forced to sell his share on the Dodgers remains up in the air, but by the time this season ends and the CBA talks heat up, there needs to be a resolution – at least, for the sake of the negotiations.
For much of the year, L.A.’s monstrous financial advantage over their opponents, mostly due to a very favorable local television deal that is part of the investigation – has provided the rallying point for the pro-salary cap crowd. The fact that the TV deal is now involved is proof that the idea that “every team can do what the Dodgers do” spending-wise has always been a load of… bulljunk, as Deion “Coach Prime” Sanders is fond of saying. Owners like the Rockies’ Dick Monfort may not travel in the same filthy-rich circles as the Mark Walters of the world, but right about now, Monfort’s more conservative business practices are looking pretty good.
Collective bargaining needs two functioning sides in order to play out properly. For much of the often-contentious history of these talks, the players’ union has had the upper hand largely because the owners were far from united. The large market, wealthier owners cared much less about the plight of the small-market teams, and argued in their own best interests – such as not wanting revenue sharing and/or any sort of salary cap. The smaller-market owners wanted a cap, but not necessarily a salary floor that would force them to spend more on salaries than they wanted or planned to.
Through it all, the players have always wanted to incentivize winning… or at least attempting to. They have always successfully insisted on avoiding a salary cap that would artificially hold down salaries, and have wanted all the teams to have to spend as if their business/on-field success depended on it… which it (notably) doesn’t.
Nobody ever gets exactly what they want, but when there are essentially three sides – the large-market owners, the small-market owners and the players all pushing their own agenda, things get much more difficult.
That’s the way it’s been in the past, and if the Dodgers’ plight gets any stickier, it will very likely be that way again.
In short, the owners won’t be able to continue their efforts (however fruitless they’ll end up being) to get the players to agree to any sort of salary cap if they can’t agree among themselves what the best course of action for the game really is. If the Dodgers’ situation remains unsettled, the owners’ situation will stay that way too. Tough to negotiate with the powerful players’ union if you don’t have your own ducks in a row.
This whole thing figures to get even messier before it starts to improve. It could make the impending lockout take that much longer to resolve, or it could force the owners to re-up the current agreement until they have more unity amongst themselves.
