SBD/October 22, 2012/Franchises

Yankees Must Decide Whether To Continue Spending Or Lower League-High Payroll

The Yankees want payroll below the $189M luxury-tax threshold that takes effect in '14
The Yankees "have priced themselves into a corner" in trying to remain competitive, "running up such a huge tab over the years and writing checks" for a $200M payroll, according to David Lennon of NEWSDAY. While Managing General Partner & co-Chair Hal Steinbrenner "has every intention of maintaining his dad’s championship legacy, he may be coming to the realization that such a thing isn’t possible on a tighter budget, not with the organization’s current state." Steinbrenner "raised eyebrows in March with his mandate of getting the Yankees’ payroll below the new luxury-tax threshold of $189 million, which takes effect for the 2014 season." There is a "tremendous fiscal incentive to cut payroll." But now that a "third consecutive season has ended without a World Series appearance, and with a top-heavy roster in flux, the Yankees are at a crossroads." The team will either "become more budget-conscious this winter -- and stomach the transitional phase -- or acquire the necessary pieces, with less emphasis on what it costs." Late Yankees Owner George Steinbrenner "always chose the latter, and the Yankees apparently are reconsidering Hal’s hard-line stance from spring training." A source on Friday said that budget concerns "will have to take a back seat if the choice is between getting below the tax threshold by 2014 and building a championship-caliber roster every year" (NEWSDAY, 10/20).

NOTHING ELSE MATTERS: In N.Y., Mike Lupica wrote at one time "the bottom line for Steinbrenner the Elder was winning it all, or else." For his "heirs, it seems the bottom line is more about profit and loss, and that sure doesn’t mean the kind of loss the Yankees just suffered" in a four-game ALCS sweep (N.Y. DAILY NEWS, 10/21). An AL GM said, "I just see [Yankees GM] Brian Cashman trying to get this team younger while still competing. That’s what I think will happen." In Boston, Nick Cafardo wrote the Yankees' "strategy of bringing older, established players off the bench worked to a great degree." The problem the Yankees have "is that they don’t have young positional players ready to take over just yet" (BOSTON GLOBE, 10/21).

INDESTRUCTIBLE? In N.Y., Bob Raissman wrote the Tigers' sweep of the Yankees "put a major dent in the once-impenetrable Yankees brand." Raissman: "Whether Brian Cashman, on the baseball side, or Randy Levine, on the business side, can repair the damage is a story with many possible endings." The Yankees’ TV ratings on the YES Network "are a better indicator of fan dissatisfaction." The team "averaged a 3.92 rating, down 8.3% from 2011 and YES’ lowest Yankees household rating since 2003." The nine-year low "came during a season in which the Yankees battled Baltimore down to the wire to win the AL East, which should have driven the ratings to an all-time high" (N.Y. DAILY NEWS, 10/21). Also in N.Y., Joel Sherman writes the stands at Yankee Stadium "were quiet -- and pretty empty -- at the outset of home playoff games and hardly sustained much life even during rallies." The "high pricing has led to an older, more restrained clientele closest to the field: A Dockers-and-loafers crew that isn’t likely to unsettle the opponent." Solving the "Stub Hub matter or lowering prices isn’t going to solve this." Sherman: "As counterintuitive as it sounds, the Yankees probably have to miss the playoffs for a few years to make this experience feel fresh for their fans again" (N.Y. POST, 10/22).

MONEY FOR NOTHING: In DC, Thomas Boswell wrote, "In 2012 money bought you next to nothing. Is it a one-year fluke? Whatever it is, it’s shocking." In '12, the "15 highest payroll teams ($124 million average) won 81.4 games on average." The 15 "lowest budget teams ($72 million average) won 80.6 games" (WASHINGTON POST, 10/19).
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