WASHINGTON — The head of the Treasury and the Federal Reserve began discussions on Thursday with team owners on what could become the biggest bailout in Major League Baseball history. While details remain to be worked out, the plan is likely to authorize the government to buy unreasonable player contracts at deep discounts from owners.
The proposal could result in the most direct commitment of taxpayer funds so far in a player salary landscape officials say is the worst they have ever seen.
"What we are working on now is an approach to deal with systemic risks and stresses in the labor markets," said Commissioner Bud Selig. "And we talked about a comprehensive approach that would require legislation to deal with the illiquid assets on ballclubs' balance sheets," he added.
One model for the proposal could be the Resolution Trust Corporation, which bought up and eventually sold hundreds of billions of dollars’ worth of real estate in the 1990s from failed savings-and-loan companies. In this case, however, the government is expected to take over only albatross-like contracts, not entire team payrolls.
The bailout discussions came on a day when Barry Zito was scheduled to start his 31st game of the season against the Los Angeles Dodgers.
Rumors about the Bush administration’s new stance on baseball contracts swept through the fantasy leagues Thursday afternoon. By the end of trading, ownership of potential buyout targets such as Eric Byrnes, Andruw Jones, and Gary Matthews, Jr. sunk to near zero from already-historic lows.
"The fantasy owners voted, and they liked the proposal," said Laurence H. Meyer, vice chairman of Macroeconomic Advisers.
The scale and complexity of the project are almost certain to create huge philosophical differences among baseball fans, which could make barrom conversations difficult to say the least. Still, lawmakers said the goal was to work through the coming weekend and to have both the House and Senate vote on a measure by the end of next week.
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