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Thursday, August 15
Updated: August 17, 3:10 PM ET
 
Owners, players stuck on one issue: Payroll tax

By Jayson Stark
ESPN.com

Here it comes, a column we never wanted to write -- everything you always wanted to know about the strike vote but were too disinterested to ask:

Why would the players vote to set a strike date?
You want the simple answer or the complicated answer? OK, first the simple answer: They're not setting a strike date because they want to go on strike. They set a strike date because they don't want to go on strike. They just want to establish a deadline that forces the negotiators to get serious.

And now the complicated answer: They're voting to strike because, after giving the owners four extra days to bargain, they're unhappy about the lack of movement at the table over those four days. Bud Selig is now denying he asked the union to put off setting a strike date Monday. But players at the meeting were under the impression that he did -- and thought that request meant the owners were prepared to make a dramatic proposal in the next few days. Never happened.

What happened to all the optimism of last Monday?
The fact is, people were probably too pessimistic before Monday -- and then got too optimistic after Monday. There's still some reason for long-term optimism, because the two sides have narrowed their differences to the point where they at least have the framework for a deal in place. They just got hung up on the issue that has always been their biggest obstacle to a deal -- the payroll tax.

How far apart are they on the payroll tax?
The two big sources of contention are 1) the tax rate a team would get nailed with if its payroll exceeded a certain level and 2) where to place that level (a.k.a. threshold).

The owners want a tax rate of 50 percent for all payrolls over $102 million (which now would affect seven teams). The players are believed to have proposed a threshold of $130 million (which owners contend would affect only the Yankees) -- with a lower tax rate that apparently could rise or fall for different teams in different years.

The union has said that all of its numbers -- i.e., the rate and threshold -- are negotiable. But it also has made clear that this creative tax structure is the only kind of payroll tax it's willing to accept -- because in general, it's philosophically opposed to any payroll tax.

So what kind of tax would the players accept?
Well, imagine the payroll tax as a giant traffic signal. If George Steinbrenner is driving up to the intersection of Jason and Giambi Streets, the players want a tax that would act as kind of a flashing yellow light. They don't mind if George has to stop, look both ways and think before he decides to go through the intersection. But in the end, it's still up to him.

The owners, on the other hand, want Steinbrenner to drive up and find a red light. In other words, they want him to stop before he ever gets to that intersection. They want a tax rate so high it would force the Yankees -- and a bunch of other teams -- to steer away from adding any more players once their payroll gets to a certain level.

Somewhere in there, they're going to have to figure out where the common ground is -- say, a flashing red light?

Have they budged at all on the tax?
It appears the players have moved the most. At first, they said they were opposed to any tax. Then they said they would accept a tax under certain conditions -- and since have nudged their threshold proposal down several times. Because their starting point was believed to be slightly below $140 million, but is now $130 million.

The owners started out at $98 million, then bumped that only to $100 million, then increased that again Wednesday, but just to $102 million.

Their threshold affected seven teams under all three proposals. The players' threshold affected only the Yankees initially but may affect another team or two at its current level. So obviously, they're going to have to find a level in between that affects more than one or two teams -- but fewer than seven.

Are there any other issues that could block a deal?
Probably not. They haven't quite agreed on the amount of revenue sharing, apart from a tax, yet. But if they can figure out the tax, they almost certainly can hammer out their differences on revenue sharing.

They haven't agreed on a steroid-testing plan, either. But they've been getting closer over the last couple of weeks.

Contraction remains an issue, since arbitrator Shyam Das hasn't ruled yet on the grievance from last winter. But it appears now that Das wants to stay out of the way while the two sides are working on the labor deal -- so they'll probably need to reach some understanding on contraction, even if it's to agree to study it jointly down the road.

And they haven't come to an agreement on a proposed worldwide draft, either. But word going around this week, following the annual scouting directors' meetings, is that scouting directors were told there are so many complications involved in a worldwide draft -- both in practice and at the bargaining table -- that it probably won't be part of this agreement. The sides may decide to put it aside as a separate issue that can be figured out after all the bigger issues are hammered out.

So none of those issues looks like a deal-breaker. Only the luxury tax is a volatile enough issue to force a strike.

How united is each side?
Players may sound less militant this time around. But they're clearly more unified than the owners.

While only George Steinbrenner has expressed any dissent lately, thanks to Selig's $1-million gag rule, the owners appear to be more factionalized behind the scenes than they have ever been.

They used to be divided into small-market and large-market camps. Now they're divided into three, and maybe four groups -- small markets, middle markets, large markets and the Yankees.

There also is a group of maybe a half-dozen hawks, another large group that doesn't want a work stoppage under any circumstances, and another group of clubs that clearly has worries that the owners' current proposal would cost them so much money in revenue sharing and taxes, they'd either have to dismantle their teams or go broke.

Finally, what are the odds of a strike?
Ah, thought you'd never ask. We still think that despite the lack of progress in the past week, the odds of avoiding a strike are far better than they were eight years ago.

In 1994, the two sides were so split two weeks before the strike date, there seemed to be no way they could make a deal. This time, the climate at the bargaining table has been much better. The sides are really only seriously divided on one issue (the payroll tax). And even on that issue, at least they only differ on what kind of tax -- not whether there should be a tax at all.

Despite their differences, they both seem to know there's a deal out there to be made. And now the pressure to avoid a disastrous work stoppage would figure to be enough incentive to make that deal between now and Aug. 30.

Plus, there are other pressures this time around: The lingering hangover from the last strike. The powerful shadow of Sept. 11. The massive debts Selig claims the clubs have already accumulated. The potential half-billion dollars (or more) in added debt that the clubs could face if Fox asks for damages if another World Series gets canceled.

In the end, the man who will most determine the fate of this dispute is (who else?) the commish. It's up to Bud Selig to step up, quiet the hawks, come to the table personally and make a compromise deal that gives his side at least some of everything it wanted -- a tax, historic levels of revenue sharing and steroid-testing.

This is no time to get greedy and push for a deal that can't be made. This is a time for baseball to get its act together, prove it can address its problems without a war and get to work on selling its beauty instead of bemoaning its warts. Let's hope that between now and Aug. 30, everybody sees it that way.

Jayson Stark is a senior writer for ESPN.com.







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