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Wednesday, December 24, 2008
It’s worth noting . . .. . .that the Yankees payroll on Opening Day 2008 was $209 million.
It's also worth noting that even with the additions of Teixeira, Sabathia, and Burnett, the Yankees' 2009 payroll obligations -- including signing bonuses -- stand at roughly $201-205 million, give or take.
Yes, that will change some as they fill out the 2009 roster, and yes, the implications of this winter's spending spree are larger than mere current-year obligations, but let's not go crazy talking about salary caps and manifest injustice and all of that jazz. The Yankees have spent extraordinary amounts of money this decade. The result of that has been the ability to bypass the typical success cycle by never truly cratering competitively and always being in the playoff hunt. The result of that has not been the disruption of overall competitive balance or the prevention of success on the part of the other teams such that radical changes are necessary, let alone desirable.
I will grant you that the former point is somewhat disheartening, but it is certainly not devastating. If you don't like Tampa Bay as an example of why the Yankees' spending isn't terrible (i.e. because it took a decade in the wilderness for the Rays to get where they are) I'll give you the Angels. Or the White Sox. Or the Phillies. Or the Twins. Or the Marlins. Or the Cardinals. Or any other team that has found success without spending $200 million.
The same level of success? Well, no. All of those teams have ups and downs, and unlike the Yankees, they do not have seeming carte blanche to acquire or retain any player they want. But baseball's prime directive is not to foster perfect competitive balance nor to ensure that players stay with the teams who developed them. Baseball's prime directive is to be a financially successful and entertaining enterprise, and it has gotten better and better at this even as the Yankees have gone nuclear with their payroll. Some would even argue that there's a causal relationship there. I don't know if that's the case, but it cannot be denied that the Yankees' success and subsequent largess of the past 15 years has correlated remarkably well with the growth of baseball's attendance and revenues.
Maybe that's cold comfort for Blue Jays and Orioles fans, but unless and until the Yankees' spending habits either (a) make a mockery of competitive balance; or (b) send fans away from the game in droves, those habits are not worth worrying about, and I don't see how any of their moves this past month are likely to lead to either of those developments.
Posted by Craig Calcaterra at 9:03am
Brilliant. Thank you. A voice of sanity.
Rob Neyer—a famous beleaguered Royals fan—has always said that it’s good for baseball to have a team like this for both their fans and the fans that hate them. MUCH more interesting.
It’s no accident that they draw the biggest away crowds.
And it’s no accident that when they lose (whether it’s a single game, a series, in the playoffs, or in the World Series), it makes great theater and press. Guilt-free schadenfraude defined.
Posted 12/24 at 10:17 AM
Personally I think the resolution of this issue is in the hand of the players themselves for if they, as a collective, were truly bothered by the disparity then they can ask their union leadership to negiotiate a salary cap. However it appears the players on the Royals, Pirates, Marlins and all other ‘small’ market clubs are okay with the current system because the signings of Sabathia and Texiera raise the salary tide for all. So when, or should I say if, one hear players on the Royals or Pirates express their discontent with the system this spring training - just inform them that they are really the force that can change the system as their union leadership has to do as they request.
This is the same issue with PED - the players could have pushed the union to implement testing but they chose not to. They, as a collective, opted for the silence of no testing and the ability for their own to cheat if they wanted to. I believe Tom Glaving even made reference to such silence after the Mitchell Report and said if he could do it over again that he may voice a greater concern and take a different course of action.
This is a collective bargaining issue between the union and ownership and many parties involved see more benefit in the current system as all players generally see their salaries rise on an annual basis and many owner have their peak earning before the season begin (through revenue sharing, tv contracts, etc.) and lose revenue as they pay salaries throughout the season as having small payrolls increases earnings.
Posted 12/24 at 10:21 AM
Jason @ IIATMS said...
VERY well said, Craig.
Posted 12/24 at 11:03 AM
The biggest problem I have is how this notches the market upward for players not nearly this good (Tex is great, but one of the best three players in baseball: Doubtful).
Posted 12/24 at 11:04 AM
Craig Calcaterra said...
John—I understand that, but it’s not like anyone has to pay LaRoche that, either. The market is defined as what someone is willing to pay. If the Yankees aren’t bidding on him, where’s his leverage?
Posted 12/24 at 11:07 AM
Levi Stahl said...
Though I hate the Yankees with the full fervor that is any patriotic American’s duty, the only action I would like to see taken to cut into their financial advantage is the addition of a third New York-area team. It’s hard to imagine that ever happening, but the population would seem sufficient to support a third team, and MLB would get a couple of years of crazy publicity—what’s the name going to be? Where will they play? Which team will they steal fans from?
It wouldn’t do that much to dent the Yanks’ advantage in the short term, but long term, if the team were good and the Yankees slipped into a period of poor performance, it might help divvy up the NYC money a bit more?
Posted 12/24 at 11:25 AM
What do you suppose the over/under is on the Yankees running out the first billion dollar team?
Posted 12/24 at 02:58 PM
Pete Toms said...
I as a Jays fan should be perturbed by Yankee spending, but I’m not. ( although, I wish the Jays could get the hell out of the AL East ) Parity is boring. In cap leagues, if you’re lucky enough and smart enough to build a great team, the cap will dismantle your team. What is interesting, entertaining or compelling about that?
As for Attanasio, this isn’t the first time he’s popped off about payroll disparity but we’ll see how much support he has amongst his colleagues. The luxury tax money the Yanks pay is relatively peanuts. The bigger contributions the Yanks make to the bottom lines of other clubs is in driving up the worth of national TV deals, sponsorships, central fund ( merchandising revenue ) and sharing their local revenues. I bet most owners agree that great Yankee teams are good business for everybody. Why do you think the owners agree to let the Yanks deduct their stadium costs?
And a lot of fans think the NFL revenue sharing / cap model is the best amongst the big 4 leagues. But the NFL is different. So, so much more of their league revenue comes directly from national TV deals. The other leagues are different, so much more dependent on the gate. ( The single largest source of revenue for MLB remains good old fashioned ticket sales ) The NFL model works becasue of the big TV money.
Posted 12/24 at 05:52 PM
Could it be that the Yankees’ free-spending ways have forced the other teams to get smarter? I mean, Billy Beane first made his splash as a young guy, there’s that young duo in Tampa/St. Pete, Texas is stockpiling talent. Even older-school guys are paying more attention to non-traditional information sources.
Even as an Orioles fan I have trouble getting worked up over the Yankees. The Yankees spend and the other teams spend their money more wisely and the Marlins or whoever win the WS.
Posted 12/24 at 09:28 PM
Dr Paisley said...
For all the spending by the Yankees, it should be noted that it has resulted in exactly the same number of World Championships this millennium as the Cubs have won: zero.
Posted 12/25 at 01:38 AM
Pete Toms said...
Winning the WS is a crapshoot, particularly with the 5 game LCS. What the Yankees financial might allows them to do that other teams cannot is make the playoffs practically every year. And that is a good thing for baseball.
Posted 12/25 at 12:59 PM
Your statement about WS Championships this millennium is often repeated but incorrect nevertheless.
The millennium did not start in 2001. It started in 2000—the last time the Yankees won.
According to Encyclopaedia Britannica’s article headed “Calendar” in the Macropaedia:
“Dionysius took the year now called AD 532 as the first year of a new Great Paschal period and the year now labelled 1 BC as the beginning of the previous cycle. In the 6th century it was the general belief that this was the year of Christ’s birth, and because of this Dionysius introduced numbering years consecutively through the Christian Era.”
So you see, even though the 2001 advocates are correct when they say there was no year zero, they are not correct when they assume the year AD 1 was the first year on the calendar we adopted. It was 1 BC according to the man who arranged this calendar, which means each new century begins in a 00 year, not a 01 year. If it began in a 01 year there would have been more than 100 years in the first century (1 BC to AD 100 is 101 years). But a century by definition is 100 years, so the idea is simply wrong. And for this reason, the claim that the Yankees have won zero WS Championships this millennium is also wrong.
Posted 12/25 at 01:44 PM
Bob Rittner said...
Thank you Craig. Let me add that the Rays “decade in the wilderness” was due more to 8 years of incompetent management than to payroll. It would be more apt to note that it took the new management 3 years to clean up the mess the previous regime left and to get the team into the playoffs. And it appears they are poised to remain competitive for a while regardless of what NY spends.
Posted 12/26 at 10:01 AM
The best argument for tempering the extreme outrage is the luxury tax. As I heard repeated about 1000 times on ESPN over the last couple of days, would you rather see the Steinbrenner family pocket the money?
With that said, I’d like to see reporting by this blog or the mainstream media as to how much money in luxury tax the Yankees are required to pay, and how much each team will receive.
Posted 12/27 at 09:30 AM
There are many good sources for information on the business of baseball, including on the mainstream media side—Forbes, The Wall Street Journal—and on the blog side The Biz of Baseball (http://www.bizofbaseball.com/).
The Yankees paid approx. $27M in luxury tax this year. The more substantial number that the Yankees contribute is from revenue sharing which was approximately $83MM. I have no idea precisely how that $110MM is split up among the remaining 29 teams. However, I do know that the smaller market teams receive the most (Miami, Tampa, Pittsburgh, Milwaukee, Kansas City, San Diego) and the larger market teams contribute the most (both New York teams, Boston, Cubs, etc.).
Posted 12/27 at 10:52 AM
Pete Toms said...
Leo, IIRC, the Yankees luxury tax ( aka the Yankees tax ) bill for 08 came in at $28 million.
Read today, that in 08 $400 million of revenue sharing dough was redistributed, a lot of that ( I don’t know how much ) has to come from the Yanks. The other contribution that the Yanks make to their partners is their contribution to the value of central fund revenues ( national TV deals, merchandise, StubHub deal etc. ). I.E. FOX doesn’t pony up for the rights to broadcast Jays /Royals.
Posted 12/27 at 10:55 AM
Pete Toms said...
Leo, thanks for answering my question.
To provide some general context, the WSJ reported during the postseaons that the Rays rec’d $60 million in central fund / revenue sharing this past season.
Posted 12/27 at 02:17 PM
I’m not sure what source your using for your payroll figures, but using Cot’s contracts site and assuming big raises for the arbitration eligible, I get the Yankees current payroll at 187.75 million, tops.
Posted 12/30 at 12:21 PM