LABOR TALKS HIT SNAG OVER DRUG POLICY

Talks aimed at getting a new labor agreement for baseball before the players
union's executive board can set a strike date tomorrow suffered a setback
over drug policy yesterday. One negotiator said the setback was not
irreversible, but a confrontation over the drug proposals of the players and
the club owners delayed discussion about a luxury tax on payrolls.

A person close to the talks said yesterday's bargaining session, the first
on a weekend since this round of negotiations began earlier this year, was a
waste of time.

By meeting this weekend, the two sides hoped to reach agreement on the
critical issues of the luxury tax and revenue sharing. If they had been
successful, they would have been prepared to table the third major issue, a
worldwide draft, until a later date rather than let it stand in the way of a
new collective bargaining agreement.

After yesterday's session, it appeared highly unlikely that negotiators
would be able to find a path to an agreement today. Without an agreement,
the union's executive board is expected to set a strike date when it meets
tomorrow in Chicago. The date selected will probably be later this month.

That the drug program, primarily testing for steroids, should have created a
problem yesterday was somewhat surprising. On Wednesday the union made a
proposal calling for testing for steroids, and management's chief labor
lawyer, Rob Manfred, greeted it almost with elation.

Manfred spoke positively about the union proposal again Friday, defending it
against complaints about disciplinary measures it did or did not provide.
But management's counterproposal yesterday included elements that were said
to have infuriated the union representatives.

Asked last night about the session, Gene Orza, the union's associate general
counsel, said: "We wrapped up some issues, but other differences between us
came into starker relief and we'll try to work them out tomorrow. We'll see
where we go from here."

Asked more specifically about the drug-testing plans, Orza said, "We're
hopeful we can overcome our differences, but today suggested our differences
were real."

Manfred acknowledged a pothole without identifying the way negotiators hit
it. He said the session was "maybe not the most productive in terms of
closing things off," adding, "but this process doesn't go forward at a
completely even pace."

Manfred said of the counterproposal: "They had identified some areas where
they wanted us to move in their direction, and we distinctly moved in their
direction. I'm not sure they feel like we moved any closer to actually
getting it done."

Until Wednesday, the union had always resisted testing for any drugs,
including steroids and cocaine. By demonstrating a willingness to have the
players tested for steroids, the union believed it had made an enormous
concession as a gesture of good faith.

But that proposal was as far as the union was willing to go, and it felt
betrayed by the clubs' attempt to wrest greater concessions.

The clubs' counterproposal, or at least elements of it, triggered a heated
union response. The immediate fallout was cancellation of a session
scheduled for later in the day; the clubs' negotiators had been expected to
make a proposal on a luxury tax at that session. They will presumably make
that proposal today.

The clubs initially asked for a 50 percent tax on portions of payrolls above
$98 million. In their new proposal, based on informal discussions between
the two sides, they are expected to lower the tax and raise the threshold.

The two sides have narrowed their differences on revenue sharing, in the
amount of local revenue that would be transferred between richer and poorer
clubs and the formula for allocation.

Manfred said, "Over the course of the last several days we have come closer
to finding that middle ground" on allocation differences.