Baseball had attempted to fold the Minnesota Twins and Montreal Expos but was thwarted by the Twins' landlord, which obtained an injunction that forced the team to honor its 2002 lease.
"While the clubs would have preferred to contract for 2002 and begin addressing the economic issues immediately," Selig said, "events outside of our direct control, including yesterday's court decision in Minnesota, have required us to move the date of contraction to 2003."
On Monday, the Minnesota Supreme Court refused to consider an appeal of the injunction by the Twins and Selig.
Owners voted Nov. 6 to eliminate two teams but did not specify which ones. Their labor negotiators later told the players' association the Twins and Expos were targeted.
Despite the court defeats in Minnesota, Selig had vowed to press on, saying the elimination of teams was needed to stem industry losses, which he claims totaled hundreds of millions of dollars last year. His admission of defeat came just nine days before the start of spring training, and he vowed to press forward with contraction for 2003.
"Contraction was an initiative of the 30 clubs and continues to be wholly supported by that group," he said. "The clubs recognize that our current economic circumstance make contraction absolutely inevitable, as certain franchises simply cannot compete and cannot generate enough revenues to survive. Quite a few of our clubs advocate contraction by as many as four clubs, and our ultimate implementation of contraction obviously may well be affected by the economics of the industry in 2002."
The players' association remains an obstacle to eliminating teams for 2003. The union filed a grievance to block contraction, claiming the owners' vote violated the players' labor contract, which expired Nov. 7 but remains in force.
Arbitrator Shyam Das was to hear his 12th day of testimony in the case Tuesday.
"I, personally, had hoped that the union had an interest in helping us solve our economic and competitive balance problems," said Paul Beeston, baseball's chief operating officer. "It is evident now that they have no such interest and that is a great disappointment to me.
"We had several discussions this spring and summer indicating our consideration of contraction. The union's vigorous opposition to contraction was inconsistent with those earlier discussions."
Owners claim they must bargain with the union only on the effects of contraction, such as player dispersal, not the decision to eliminate teams.
The Twins didn't even wait for Selig's announcement, telling employees after Monday's court ruling that the team would exist for its 42nd season in the Twin Cities.
"Hopefully, this gives the guys a sense of security to go out and play baseball," infielder Denny Hocking said.
The Twins and Expos rank 29tand 30th in revenue last year, and both have failed to obtain government financing for new ballparks. Twins owner Carl Pohlad told Selig he was willing to have his franchise folded.
"We've anticipated for the last month or so that we would be playing," Twins president Jerry Bell said. "We have a good team, we had a good year last year, and we expect to have a good year this year."
The Metropolitan Sports Facilities Commission, which operates the Metrodome, sued to force the Twins to honor their lease and Hennepin County District Judge Harry Seymour Crump issued the injunction on Nov. 16.
The Minnesota Court of Appeals upheld the order Jan. 22, ruling in a 3-0 decision that Crump did not abuse his discretion in issuing the injunction.
The battle over the future of the Twins shifts back to the Minnesota Legislature, which is reviewing proposals for a new stadium that could ensure the team's long-term survival.
Republican Rep. Harry Mares, a stadium bill sponsor, said the pressure is on lawmakers.
"Either we act this session or I believe you'll still see contraction next year," he said.
Alabama businessman Donald Watkins has begun talks to acquire the team from Carl Pohlad, who bought the franchise in 1984 to keep it from moving.
Meanwhile Monday, baseball owners moved forward with plans to meet Feb. 12 in the Chicago area two days before the start of spring training to approve the sales of the Expos and Florida Marlins.
A group headed by Florida owner John Henry was given approval Jan. 16 to buy the Boston Red Sox for $660 million from the Jean R. Yawkey Trust.
Henry is negotiating to sell the Marlins to Expos owner Jeffrey Loria for $158.5 million and Loria is negotiating to sell the Expos to the remaining 29 teams for $120 million.
Unable to eliminate the Expos, Selig intends to have the commissioner's office appoint a chief executive officer-general manager to run the team this season. Frank Robinson, the vice president in charge of discipline in the commissioner's office, is expected to become manager of the Expos.
The Senate Judiciary Committee will hold a hearing on baseball's antitrust exemption next Wednesday.
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