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The Shrinking Dollar / Selig: Contraction certain after losses total over $500M

Chicago - Saying that Major League Baseball lost more than $500 million

last year and faces significant long-term debt problems, commissioner Bud Selig

yesterday vowed to press ahead with eliminating two teams as a partial

solution.

"Baseball will contract," Selig said following a day-long owners meeting

here. "I can't give you an exact timetable today because in some parts, it's

out of our hands ... We're at a crossroads here. We're not doing this to be

mean-spirited. When you have an industry that loses over $500 million and has

25 clubs in the red, that is a business profile that is not only unacceptable,

it is stunningly bad."

One baseball executive estimated the total long- term debt at $3 billion at

the end of 2001.

Gathering for the first time since Nov. 6, when they voted 28-2 to fold two

teams, the owners also unanimously decided to extend Selig's contract for

three years. Selig, 67, who was elected to a five-year term as commissioner in

July 1998, will remain in office until Dec. 31, 2006.

Representatives from baseball's bankers, FleetBoston Financial Corp. and

Bank of America, reviewed the sport's finances with the owners yesterday, and

"this loss stunned everybody," Selig said, "but the debt is even more

worrisome." He denied that the bankers told owners to contract, and that the

issue had been under discussion for some time. "We had already made that

decision. There hasn't been a voice of dissent about contraction in the last

five major- league meetings."

In testimony before a House Judiciary Committee hearing Dec. 6, Selig said

he would reveal "not only these numbers but all the individual club numbers.

There will be no more dispute." Without offering specifics, he said "clubs are

losing so much money that they can't pay the interest on their debt." One

source said even the world champion Arizona Diamondbacks lost money.

Selig again refused to name the teams under consideration for contraction,

although the Minnesota Twins and Montreal Expos are the likely candidates.

Twins owner Carl Pohlad wants to cash out, and Expos owner Jeffrey Loria

reportedly wants to purchase the Florida Marlins, but that proposed transaction

is on hold, presumably because if the Twins survive, owners would consider

folding the Marlins. Selig yesterday denied that baseball has agreed to buy and

run the Expos. Meanwhile, John Henry, the Marlins' owner, has said he is

willing to become a minority investor in Tom Werner's bid to buy control of the

Boston Red Sox, sources said.

Despite the legal and political challenges to eliminating teams, the

commissioner said that owners were behind him, and five of them, including Fred

Wilpon and George Steinbrenner, praised Selig's hard work and leadership

yesterday. The Yankees owner, who nominated Selig for the extension, said

owners were "prepared to go to battle" on contraction, and predicted it would

happen, "maybe not this year, but sometime down the road."

Whether eliminating teams will occur this offseason should be clarified in

the next few weeks.

In addition to the Congressional hearing, the Twins and baseball have asked

to expedite, by Dec. 7, an appeal of a temporary injunction issued by a

Minnesota District Court judge that forbids Pohlad from folding the team or

selling it to a buyer who wants to move the club before the 2002 season.

Arbitrator Shyam Das has offered to hear the union's grievance against the

owners, which claimed that contraction would violate the collective bargaining

agreement, in early December. And by Dec. 13, Florida Attorney General Bob

Butterworth's office is expecting responses to subpoenas asking for documents

related to contraction from Selig and other baseball officials at the Nov. 6

meeting to determine whether they should pursue the matter on antitrust

grounds.

"Are we surprised at what happened? Did we miscalculate? No," Selig said.

"Should I have done it earlier? After Sept. 11, I wouldn't have the unmitigated

gall to interrupt the playoffs and the World Series with this kind of

conversation. We have short-term plans, we have mid-term plans, we have

long-term plans. We're prepared for any eventuality."

Selig also addressed the labor talks, which he hopes will resume this week.

"We have no plans to lock out players. That's not even on my radar screen. We

have too many other issues to resolve, and frankly, I don't think that helps

it. We will move ahead with contraction as the issues that right now are

slowing it down are resolved."

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