BASEBALL: GO FIGURE

Baseball economics have long been an enigma, a mystery seemingly written in the red ink of creative accounting.

Could a CPA explain it, or would Lewis Carroll be better?

I mean, it gets curioser and curioser.

Here’s the Walt Disney Co., thinking enough of the industry’s potential to make a $30-million down payment on a $120-million purchase of the Angels, then spending an additional $70 million or so on the renovation of Anaheim Stadium. Disney is now claiming operational losses of $25 million over the last two years, prompting a 27% increase in ticket prices.

The last time Disney made such an allegedly bad investment, Michael Ovitz was fired. But Disney hasn’t put a for-sale sign on the Angels.

In Florida, Wayne Huizenga, a shrewd billionaire, spends $89 million on free agents, hoping to spur an attendance renaissance and prompt local politicians to build a retractable-roof stadium for his Marlins. Attendance booms, the Marlins win a World Series championship and Huizenga claims losses of $34 million. He says he must dramatically reduce the payroll and sell the team. So Tuesday, he let the Houston Astros steal the high-salaried Moises Alou. And his asking price for the team is $165 million. A group headed by current club President Don Smiley is about to meet it.

Of course. The line forms to the left. Someone is always waiting and willing to buy in.

Look no further than Chavez Ravine. Rupert Murdoch has agreed to spend about $311 million--sources now say that’s closer to the price than the $350 million originally reported--to buy the Dodgers.

Given Murdoch’s global business success, would he buy a financial loser in an industry on the financial ropes?

Would he spend $500 million as baseball’s leading TV investor?

Well, now comes a report that the Dodgers lost $35 million over the last four years, including $12-13 million in 1997.

The Daily News reported it Tuesday, saying the club’s employees were informed of the losses during recent organization meetings and that annual bonuses given management-level personnel will be withheld this year, although other employees will receive a standard raise.

Is that possible?

The Dodgers? That model operation? Losing $35 million over four years? Losing more than $12 million in a year of 3.3 million attendance, their best since 1991?

Think blue? Or think red?

Well, here’s where Lewis Carroll comes in again.

Sources in New York told The Times that those figures--$35 million and $12 million--aren’t nearly that high, that the Dodgers claimed losses of $6 million in 1997 and $4 million in 1996 in unaudited filings with the owners’ Player Relations Committee.

According to those sources, the Dodgers had revenue of $100 million in ‘97, up $15 million from 1996.

“It seems to me that the Dodgers were in an optimum position where they could take a book loss for tax purposes while experiencing a positive cash flow,” a lawyer familiar with those reports said. “It’s totally legitimate. Accounting is an art. I mean, I sincerely doubt that Rupert Murdoch would buy a losing proposition. He’s no fool.”

Said a high-ranking baseball official, citing his knowledge of Dodger economics and the reference to losses of $35 million and $12 million: “It’s not a good picture, but it’s not that bad. In one of the last four years, the Dodgers actually showed a profit. They came close to breaking even in another year. The strike year [1994] was an aberration, of course, in that everyone lost, and ’95 was also shortened because of the strike.”

Do figures lie? Do people?

“Well, I’m sure that their books must show it, but I have no idea why it would be true,” Roger Noll, a Stanford economist who has worked with the players’ union, said Tuesday of the alleged losses.

“It seems to me that it’s highly unlikely that their costs are so unusually high they can’t be profitable, [considering] their high revenue. It doesn’t make sense. What you’re saying is that you’re going to divide $35 million by four. That comes out to about $9 million.

“It’s implausible for me to think that the Dodgers lost $9 million a year into perpetuity. And I don’t think this would be a valid basis for making a long-term statement about the profitability of the team.”

Neither owner Peter O’Malley nor vice president Bob Graziano would discuss Dodger figures Tuesday. And neither would confirm or deny the accuracy of the Daily News figures.

Both acknowledged that employees--”given the prolonged nature of baseball’s four-year storm,” O’Malley said--were provided a candid and detailed account of industry and club economics so that “we can work together to do a better job to meet the challenges facing the industry and club,” Graziano said.

He added that rising costs, escalating salaries, the new revenue-sharing commitment, the costly dynamics of a privately owned stadium, and the reduction in money coming to the clubs from central funding--national TV and licensing, for example--as a lingering spinoff of the strike had contributed to the Dodger economic situation. The Dodger payroll was about $43 million last season and the club sent about $5 million to less fortunate brethren in revenue sharing.

O’Malley reiterated that all of that was a factor in his decision to sell.

“I go back to what I said in January,” he said. “It now takes someone with extraordinary financial wherewithal to weather the storms. Certainly one of the factors [in the decision] was the magnitude of the [economic] challenges.”

Murdoch has examined the books and seen nothing to alter his desire to buy the club, a Fox spokesman said Tuesday.

The sale awaits a vote of the owners.

Reached in Milwaukee, acting Commissioner Bud Selig would not discuss the specifics of Dodger economics but said, “If the Dodgers can’t make a lot of money, what does that tell you about the Pirates or Expos or Padres? The union may not believe it, but everything we said during the strike [about baseball’s economics] is still valid. We have more clubs than people are aware of up for sale and we have several with difficult stadium situations. We won’t have five clubs make money this year, and that has nothing to do with accounting.”

Perhaps, but those ledgers still look pretty curious.

THE DAY IN BASEBALL

Marlins Trade Alou to Astros

Florida begins dismantling World Series championship team in cost-cutting move. C4

Martinez Wins NL Cy Young

Former Dodger who could soon be a former Expo is a near-unanimous selection. C4

ALSO

Baltimore installs Ray Miller as new manager. C4