Buy Me To the Moon
With the recent signing of Mark Teixeira for $180M over 8 years, the New York Yankees have spent a total of $423.5M on three free agents this winter.
Add in the $248M still owed on Alex Rodriguez’s contract, and the Bronx Bombers have committed over a half-billion dollars ($671.5M to be exact) to three ballplayers over the next eight years.
If that’s not an attempt to buy a World Series Trophy, I don’t know what is.
Based on this winter’s signings, the Steinbrenners clearly did not have any investments with Bernard Madoff (unlike another baseball team father-son ownership based in New York City … though, we’re assured that little financial scandal won’t affect their organization in any way).
The immediate reaction by 99% of people is that this enormous outlay of cash by the Yankees is despicable, unfair, and/or “exactly what’s wrong with baseball”.
On the one hand, it’s slightly upsetting that Teixeira did not choose to join his hometown Baltimore Orioles, who have some bright young arms, athletic outfielders, and a future superstar catcher on their horizon. Adding a solid All-Star bat like Teixeira might have been the last piece of the puzzle to push them into contention at some point within the next 2-3 years. Already the toughest division in baseball, the AL East would have been even more competitive if the O’s joined the ranks of the elite.
But now, it’s a three-team race among the Yankees, Red Sox, and Rays — who have to prove 2008 wasn’t a Cinderella season. No matter how much the Blue Jays and Orioles improve, it’s doubtful they’ll sniff the postseason before 2012. Though, you never know.
Does that make the Yankees a big bully? Is their spending this winter as obnoxious as everyone says — particularly in this difficult economy? Are the Yankees singlehandedly “ruining baseball” ?
No, no, and no. And no to any other such nonsense.
First off, the Yankees had over $80M come off their 2008 budget thanks to the expiring contracts of Bobby Abreu, Jason Giambi, Andy Pettitte, Mike Mussina, Carl Pavano, and Kyle Farnsworth (yes, I know Farnsworth was traded, but it was nonetheless another $5.5M off the books). With all that coming off, it’s entirely possible that the Yankees’ 2009 budget will be BELOW their 2008 spending even with the additions of Teixeira, C.C. Sabathia, and A.J. Burnett. Heck, they may still have room to sign Manny Ramirez. Yes, their payroll is still going to be a good $70M or $80M more than the next-highest spenders, but they’re not going above and beyond what they’ve been doing since 2003. And guess what? Despite spending more than any other team for the last five years, the Yankees have yet to make a World Series appearance. Huh.
Secondly, while every other team in baseball is crying about the economy, claiming they can’t afford to pay for free agents — and in many cases, laying off non-player personnel — the Yankees are HIRING. If the Steinbrenners follow up these big free agent signings with an announcement that they’re cutting their administrative staff or stadium maintenance people, then something stinks. But that doesn’t appear to be the case. In these tough times, I openly applaud business owners like the Steinbrenners, who instead of laying off people for fear what the future might bring, are instead investing in their future and seeking to improve and grow their product.
Obviously, the Yankees can afford to pay all these ridiculous salaries — they must be doing well. Would you prefer that they sat on their money, or hid it somewhere, rather than doling it out? Consider this: with the signings of three All-Stars, how many Teixeira, Sabathia, and Burnett Yankee jerseys and T-shirts will be sold? How many more baseball gloves with those players’ “autographs” on them will leave the shelves? How much money will Teixeira, Sabathia, and Burnett themselves spend, now that they’re ultra-millionaires? My guess is all three will put at least some of their earnings back into the economy, as well as into charitable foundations. Spending money in these tough times shouldn’t be frowned upon — it should be embraced and encouraged. Somehow, it all trickles down, eventually.
Finally, it is not the Yankees “ruining the game” by spending boatloads of money. If anyone is “ruining” baseball, it’s the San Diego Padres, who are dismantling their team piece by piece because their owners are in the midst of a divorce. To me, it is vastly more despicable for a teams like the Padres and Marlins to run “fire sales” in an effort to reduce payroll — and in effect, put a minor league team on the field. I understand that small market teams can’t compete, financially, with the Yankees, Red Sox, Cubs, etc. But if they can’t figure out a way to generate the minimum $40-60M to cover a Major League payroll, then either find a new management team, sell the club, or go to the minors — in my opinion there are too many MLB teams anyway.
Which brings me to another point that isn’t related to the Yankees, but with MLB in general. We’ve heard that the Diamondbacks and Blue Jays have been “forced” to lay off administrative personnel during this offseason. It’s also been reported that MLB had to cut their staff significantly, specifically in their MLB Advanced Media / website department. Can someone please explain to me how and why there are teams and MLB itself cutting staff when they made more money in the last five years than they ever have in history?
It was widely reported last winter that MLB.com paid out $30M to each club, after it generated nearly $400M in revenues. MLB Advanced Media’s growth has been fast and furious, and I find it VERY hard to believe that revenues were down in 2008 — if they were, they couldn’t be down by much. MLB.com’s user base, paid subscriptions, and traffic all went up. In addition, it was also widely reported that MLB as a whole made over six billion dollars in 2007 — an all-time high — and set attendance records. Following that momentum, several teams during the 2008 season set records again for attendance and ticket sales (including our New York Mets). So for the last two or three years, baseball has been absolutely booming, bringing in money faster than they count it — yet, teams (other than the Yankees) are crying poverty and adding to the unemployment rate. Is it me, or is something rotten in Denmark?
Perhaps I’m in the minority, but the money being thrown around by the Yankees is, to me, refreshing. At least there is one team doing well enough to feel they can put their profits back into the company, with an eye toward improvement and long-term growth.