After the Yankees swooped in and signed Mark Teixeira for eight years and $180 million, most of the civilized and nearly bankrupt world predicted an end to the baseball firmament as we know it. Spare me.
What did their critics expect them to do? These are the Yankees. They were only doing what they normally do, what only they can do, and what we all should have expected them to do after missing the playoffs last year for the first time in 14 seasons.
After their latest indulgence, the Yankees now feature a lineup with the four highest paid players in MLB, not to mention the highest paid players in all of baseball at six different positions. They’ve spent $423 million on free agents this off season and they’re not done yet. Add that to the more than $400 million they spent on their own free agents last year and you can be excused for thinking Wall Street and the auto industry should have hit up the Steinbrenner family for a bailout instead of the U.S. taxpayer.
But the vitriol aimed at the Bronx Bombers is misplaced. If you’re looking for a scapegoat, blame the system. The Yankees play in the biggest and best market, are moving into a new stadium that will generate obscene amounts of money, and own a one-third interest in the YES Network. In short, they’re the sports equivalent of Fort Knox.
Even with revenue sharing, to which the Yankees will contribute in excess of $80 million this year on top of a luxury tax bill of $27 million, the imbalance in the ability to generate revenue among MLB clubs continues to grow. As pointed out in an earlier column, the 300 seats that go for $2,500 per game in the new Yankee Stadium will yield more in ticket revenue than the amount that at least half of MLB clubs generated last year from their entire ballpark.
And lest we forget, MLB doesn’t have a salary cap and no amount of wishful thinking will result in one. The union will never agree to a salary cap and MLB isn’t in a position to pull an NHL and close up shop for an entire year in an effort to implement one.
If you want to criticize the Yankees, there are ample grounds on which to do so. They bullied and intimidated the City of New York for $940 million in tax exempt bonds to subsidize their new ballpark. Not satisfied with that handout, they have the chutzpah to request an additional $259 million of tax exempt bonds while lavishing exorbitant contracts on free agent players.
Acres of parkland in the Bronx that were appropriated to build the new ballpark will likely never be replaced, in spite of a commitment by the team to do so. That’s unconscionable, and yet the Yankees can get away with flaunting the agreement because…well, because they’re the Yankees, which means they operate with an arrogance that is unrivaled in professional sports.
Yankee haters, of which there are legions, should take solace in the fact the team has spent almost $2 billion in salaries, revenue sharing, and luxury taxes since their last World Series title. And this year’s shopping binge won’t guarantee a playoff berth in 2009, let alone the team’s 27th title. The Yankees’ annual payroll has exceeded the second highest total in the game by approximately 50% for the past several years, and they haven’t won the World Series since 2000 or a playoff series since 2004.
Last year at this time, the experts were predicting a World Series title for the Detroit Tigers after they acquired Miguel Cabrera and Dontrelle Willis in a trade with the Florida Marlins. But a check of the final standings for the 2008 season shows the Tigers looking up at every other team in the AL Central Division.
After gorging themselves in the free agent market, the Yankees will certainly enter the 2009 season as one of the favorites to win it all, and on paper, they should be. But games – and pennants – are won on the field, not with a checkbook.
Criticize the Yankees if you will. But remember, they’re only operating within the system.
Jordan Kobritz is a former attorney, CPA, and Minor League Baseball team owner. He is an Assistant Professor of Sport Management at Eastern New Mexico University, teaches the Business of Sports at the University of Wyoming, and is a contributing author to the Business of Sports Network. Jordan can be reached at email@example.com.