Saturday, August 31, 2002
Reds should benefit from deal
By John Byczkowski, John Fay and Cliff Peale
The Cincinnati Enquirer
If baseball's new labor agreement results in a new economic order in the sport, the Cincinnati Reds are exactly the type of team that will be helped by it.
![[img]](http://reds.enquirer.com/2002/08/31/larue_150x143.jpg)
Jason LaRue signs autographs before Friday's game. (Ernest Coleman photo) | ZOOM | |
The new luxury tax and revenue sharing plans won't turn the Reds into the Yankees, but it could shorten the distance between the two. And the Reds are regarded by many to be a well-run mid-market team that can become more competitive under the new agreement.
Reds owner Carl Lindner said the deal was good for the Reds and for baseball, but he didn't know how much the Reds would get from revenue sharing or the luxury tax next year. The teams were still waiting Friday for details of the deal to be sent from negotiators in New York.
The Reds aren't expecting a huge bump in their income from revenue sharing. Because the payment is calculated on next year's revenue, which will go up $8 million to $10 million with Great American Ball Park, revenue sharing will not be the boon that some fans might be expecting.
Any expected revenue sharing payment would cover a Reds loss of about $3 million, but not much more. In 2001, under the old labor agreement, the Reds received more than $13 million in revenue sharing.
Reds general manager Jim Bowden favored the new agreement but wouldn't discuss any plans for the team. It's very positive that there's not a work stoppage, he said. It's a sign to the fans that players and the owners were able to get together and avert a work stoppage. That's a sign to fans that both sides realize the fans are the most important party involved.
Mr. Bowden said while the new labor agreement is a good thing for the Reds, just how good remains to be seen. We're going to have a new stadium, a better labor agreement. Those are two very positive things, he said. He added that he and chief operating officer John Allen met Friday afternoon to talk about some of the Reds' long-term issues.
Mr. Allen was unavailable for comment.
While the new deal will help, it will not by itself restore the kind of competitive balance that the Reds and other smaller-market teams had been seeking.
But Mr. Lindner has said the Reds are in better shape financially than many teams. The team has total debt of about $75 million, well below the average of the 31 teams.
Giving a team money doesn't mean it will be spent well, and the new labor agreement won't work if teams make bad decisions with the money they'll get from revenue sharing. Still, the Reds front office is well regarded and is expected to fare well under the new agreement.
I think it will give lesser markets a better chance to compete - if they use the money they get through revenue sharing for player salaries, said player agent Joe Bick. The clubs in smaller markets are also going to have to be willing to expend those revenues on player salaries, and spend it wisely.
If the Reds elect to spend additional forthcoming revenues on salaries, there is no doubt in my mind their player personnel people will make decisions that allow them to be competitive year in and year out.
Player agent Brian Goldberg said he agreed that the Reds won't get a huge monetary benefit from this agreement. The Reds are still going to have to be creative with scouting, drafting and trading, he said. And to me, Jim and the Reds' baseball people are really as creative as there are.
In the end, it could be that the biggest favor baseball did for the Reds was in reaching a labor agreement without a work stoppage. I'm sure the Reds are breathing a sigh of relief that they aren't going to be moving into a new ballpark on the heels of a messy strike, said Bruce K. Johnson, a sports economist at Centre College in Danville, Ky.
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