The Socializing of Slap Shots

By Roger Kahn

BYPLAY

Fragments of a strange, neo-Marxist, semicomic, mostly portentous sports story broke--I should say oozed--out of Cleveland the other week.

A hockey team called the Barons stopped paying its players. Melvin Swig, the president of the Barons, pleaded the club's poverty, which was an honest plea as Mr. Swig stated it. The Barons were not drawing in their home arena near Cleveland. Mr. Swig, however, resides in San Francisco. There his family prospers in real estate and owns the glorious and expensive Fairmont Hotel.

"The guys won't skate for free," said Bob Stewart, a husky defenseman who runs the Cleveland chapter of the Professional Hockey Players Association. In effect, Mel Swig shrugged. He hadn't bought the Cleveland Barons, anyway. He'd bought the California Golden Seals. When they didn't draw, he had to move them to Cleveland, and now the Seals-Barons still weren't drawing and a moving company was looking for $70,000--and that wasn't in the Cleveland till either. I mean, it was fun owning a hockey team, but this was absurd.

"We've got to work something out," Alan Eagleson, lawyer for the players' association, told the rulers of the National Hockey League at a crisis meeting in New York. Eighteen teams compete in the N.H.L., some subsidiaries of large conglomerates. No significant cash appeared, and at length the owners could not decide whether to bury the Barons quietly to Chopin or more dramatically to Siegfried's funeral music from Goetterdaemmerung.

Faced with executive ennui, Eagleson had to work with desperate speed. If the Barons folded, at least ten players would be thrown out of work and certain games would be canceled. No disaster. Other troubled hockey teams, like the Pittsburgh Penguins, might also be seduced toward bankruptcy. No delight. Finally and critically, the deferred-income contract--basis of six-figure salaries in all sports--would at once become suspect. Who could sign a long-term deal with a team that might disappear in the short term?

That question transcended hockey. Without deferred-income provisions, player salaries would shrink or even shrivel. The death of an obscure Cleveland hockey team could shake all sport. Barons, hell. They looked like the Cleveland Sarajevos.

Eagleson checked the books. The Barons needed $600,000 to finish the season. He offered Canadian banks the credibility of the players' association, plus receipts from an exhibition series that would include the best teams in the league. Eagleson raised the $600,000 (at 11%), which he passed on to the Barons (at 11%). It is as if the United Auto Workers had bailed out Oldsmobile.

Ultimately, what these events illustrate is that the sports boom has peaked. Bob Woolf, who represents about 300 athletes, recently spoke at the Harvard Law School Forum. A hockey player worth $125,000 a year in the open market last season, he said, is now worth about $85,000.

As recently as ten years ago, athletes generally were underpaid. Hockey stars drew as little as $10,000. With the appearance of lawyers and agents, they acquired professional bargaining help. Then entrepreneurs, starting new leagues in football and basketball and hockey, put the professional bargainers where bargainers dream of being--atop thrones, sorting bids from rival leagues. Finally, as new teams and new leagues began to fade, a series of court decisions gave athletes the right to bargain from team to team within a single league. There seemed no limit to salaries for slap shots.

"But IRS took a good tax-shelter deal away last year," Woolf said, "and we're discovering something. Without the tax shelter, sportsmen are not really that interested in owning sports teams. There isn't fresh money around."

The situation in general:

1) FOOTBALL. Very solid. The N.F.L. is helped by a television contract that throws off $2 million to each team and by a relatively low salary scale. No signs of imminent trouble anywhere.

2) BASKETBALL. In remarkably good health. The N.B.A. pays very high salaries, but squads are small. Salaries appear stabilized. So does the league.

3) BASEBALL. Heading for trouble. Creditors had to take over the Houston Astros. Four or five other franchises seem undercapitalized. Court action and blundering leadership are sending baseball salaries through the dome. One projection suggests that within three years every starting major-leaguer will be earning at least $200,000. Extreme perhaps, but in the next five years we may see some major league bankruptcies.

4) HOCKEY. Eagleson would like four or five weak franchises folded this summer to avoid more Baron crises. No investment for widows and orphans.

5) OVERALL. A Harvard Law degree may become as valuable as a good fast ball in ten years. I haven't decided which way to root on that one.

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