Pinch hitting: High and Tight
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- January
- 9
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January is traditionally a slow month for baseball news. So for the second year in a row, we will showcase other blogs with a series of pinch hitters.
Next up is Mike from High and Tight.
Mike says he has been blogging for five years. “My favorite players are Don Mattingly and Mariano Rivera, and my man-crush on Joba Chamberlain grows daily. Born and raised in northern N.J., I’m now living in Southern California just north of San Diego. I’m an avid poker player and will next be playing in the World Series of Poker circuit event in Rincon, Calif., this March. Anyone who wants to say hello is welcome to stop by.”
Here’s his post:
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We’ve heard squawking from some team owners recently, jawing and complaining about the Yankees’ spending this past off-season. What, this is new? Despite the fact that the payroll for the 2009 season is lower than that for 2008, some such as Houston’s Drayton McLane and Milwaukee’s Mark Attanasio are crying for a salary cap, or anything to artificially inflate the price of the franchises that they bought for less than what Mark Teixeira received.
Well, be prepared for more complaints. The Yankees’ financial advantage isn’t going anywhere but up. The people in charge of the franchise have finally learned how to truly exploit the market.
In 2002, the Yankees (or rather, a company now known as “Yankee Global Enterprises, LLC,” which incidentally now also owns the Yankees baseball club) founded the YES Network, and has reaped huge financial rewards from it. Cable companies were paying the Yankees millions of dollars per year for the rights to broadcast games, and yet were still making huge profits on the product. The Yankees realized that by starting their own network, those profits could be theirs as well and the rest is history, culminating in the new ballpark across the street — the House that YES Built.
The new ballpark opens new avenues for revenue beyond luxury boxes and ticket price increases, which I’m sure we’ve all heard enough about. An aspect of profit most may not think about that the Yankees are about to exploit is concessions.
Every major league ballpark has concession companies bid for long-term contracts in order to provide services for the fans: food, beverages, souvenirs, restaurants, etc. Of the 29 other MLB teams, 28 are serviced by either Aramark, Centerplate, Delaware North Companies Sportservice, or Levy Restaurants (the Marlins fall under a contract that Dolphin Stadium already had with Boston Culinary Group). Rather than follow the tradition route of bringing in an outside vendor, the Yankees instead are following the blueprint they laid out when founding the YES Network. They’re doing it in-house by founding Legends Hospitality Management with partners CIC, Goldman Sachs, and the Dallas Cowboys.
Don’t think there’s a lot of money to be made in this industry? Let’s look at the examples given above. Annual sales (2007) for Aramark, Delaware North, and Levy were $12.4 billion, $2.0 billion, and $610 million respectively.
Centerplate, which ran the concessions at the previous stadium, earns $740 million in annual revenue. However, Yankee Stadium was their largest source and generated approximately $70 million per year. With the new amenities, restaurants, shops and bars at the new stadium, expect that $70 million figure to rise starting in 2008. Why would the Yankees decide to share $80, $100, $150 million in sales revenue with another company when the team itself could reap the profits?
The value of the new ballpark to the team goes far beyond new ticket prices, synergistic YES marketing, naming rights, partnerships, and advertising deals. It’s yet another chance for the Yankees to truly flex their financial muscles and reap as much benefit as possible from their brand.
As long as they continue to sink it back into the team on the field (and – through luxury taxes – the rest of MLB) then count me as satisfied.
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Thanks, Mike. Great job. Coming tomorrow: Zac from Zac’s Yankees Blog.
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on Friday, January 9th, 2009 at 12:25 am by Peter Abraham.
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Chad Jennings
Sam Borden
Josh Thomson
Mike: That post was a fun read, well done.
My personal opinion is that at some point there is a valid argument to be made for not so much a salary cap as for a salary floor, but it’s late and I’m afraid if I try to argue this point now I won’t make any sense.
Anyway, the truth is, the other three major sports (football, basketball and hockey) all have salary caps, and this decade:
football has seen the Giants, Colts, Steelers, Patriots, Bucs, Ravens and Rams win, with the Patriots winning three times
basketball has seen the Spurs and Lakers win all but three championships in the last nine years (Heat, Pistons and Celtics being the others)
hockey, since the lockout has seen the Red Wings, Ducks and Hurricanes win-all teams with Stanley Cup appearances previously in the decade
While baseball has seen the Yankees, Diamondbacks, Angels, Marlins, Red Sox, Cardinals, White Sox, Red Sox and Phillies all win…
So you can make an argument that, so far, anyway, salary caps haven’t really done anything to increase parity!
Finally, a good guest blogger.
Gotta say, so far this has been the best post I’ve read so far. I was getting a little annoyed by hearing the personal stories of bloggers I neither care nor wish to care about. Mike wrote about an interesting aspect I never really thought about. Great job Mike.
Dave
Agreed–if you’re going to salary cap, you need a floor. My good friend, who is a Mets fan, insists that the Yankees and Pirates are taking equal part in ruining baseball. In mocking my fandom, he asked how it would feel if the Yankees won the World Series knowing that they bought the championship. I told him to shut it and he insisted that he feels the same way about the Pirates and feels that they need to be required to spend a certain amount, “so they can’t pull THEIR crap anymore either.”
Made me laugh.
most interesting read yet – i’ll be checking your blog out
Great post, now I feel like having a hot dog & a beer.
GREAT POST!!
All the “pinch hit” bloggers have done a good job.
Nice job. Interesting and informative.
from previous thread:
Yes, this site on the blackberry got a lot worse a few weeks/months ago, whenever it was. Grrrr. But the “b” to the bottom and “t” to the top is a must. Without it, ouch.
Now I know what you meant, Ed. This blog used to have a mobile version, I guess, and now for some reason it doesn’t. Pete, what’s up with that???
And I was a Gator fan – tonight
We should get free t shirts every game. Betweek Yea and now there own conseesion distribution company they are making crazy revenue. No limit to our payroll just need to make smart choices this time around. Lets hope CC & AJ perfrom. Tex is a lock baring health
Great job Mike – very interesting and knowledgeable post.
Ironically, the yankees are set to bring their revenue to such heights as to surpass their wildest dreams 20 years ago and for some reason the team is absolutely dead set on lowering payroll this off season. With dramatically rising ticket and concession prices and the yanks set to make a boatload of money through YES amaong many other things, why are they so determined to lower payroll? I dont get it. And the thing is every fan with a half a brain knows how much money the yanks will make next season and every fan knows how – the fans money out of the fans pocket. So why put less money into the team than last season?
Everyone in the world outside of yankees fans are complaining about the yanks rampant spending but they have to realize that we had 80 million dollars in payroll coming off the books. They also have to realize that next season the yankees organization will break every record in sales the organization has ever had. iM not even talking about attendance here which will probably sell out every single game no matter what the economy looks like over the next 365 days. sO THERE question is why are the yankees spending so much and my question is why are the yankees constantly talking about re-investing less money.
I know this sounds like ignorant greed but its a logical question especially since I know and we all know they have the money in revenue coming in that will far surpass that of last seasons. And guess who is paying the higher ticket prices and the higher concession prices? we are. Dont you expect to see the same if not more money put into the team if we are forced to do that.
One more thing – why would any team in their right minds decrease the size of a stadium by thousands of seats when they have broken attendance records for multiple consecutive seasons? Its a rhetorical question – to be able to increase revenue even more with more luxury boxes which the average fan cant afford and less regular seats where most of us sit. And the result of this is higher ticket prices – it all comes back to supply and demand. If 50,000 fans want a seat and there are 50,000 seats – the price is maintained. If 50,000 fans want seat and there are 60,000 seats, the price is lowered to try to fill more seats by allowing more people to afford seats. What happens when 50,000 fans want 40,000 seats.
Well now the yanks increase ticket prices so less fans can afford seats and they can still fill the whole stadium (these are just made up numbers obviously). So it is a double whammy for us fans and a double win for the organization – they get more luxury boxes to make more money which we cant afford and they get to increase ticket prices because there is less seats so we have to pay more if we want to go to a game.
The least they can do is reinvest the entire 208 million they had put into the team last year with all this new revenue and the cost of going to a game going to go way up. Its not greed, its just simple economics. Feel free to disagree but remember you only gain when the yanks spend more right now seeing a better product on the field. tHERE is no reason to take the yankees financial advisors side on this issue.
Nick, thanks….
As for being a Gators fan, welcome to the club. lol. I went to school there for a semester before coming back to NY, but still support that team.
If you add a salary cap you kill the luxury tax and then all these small market $40M 100 percent subsidized teams that don’t spend a penny of their own money for their team’s salary have to pay it in full, which will hurt their franchise even more because they cant use 15 million of George’s money to go land a closer or whatever
By the way – of course, if the yanks sign one more player like pettitte for more than 10 mil or sheets for around that or perez or trade for a player with a larger contract my point is moot. I realize that so no need to call it to my attention. I am just assuming that the payroll stays as is which I know may not happen.
Actually, considering the yanks glaring need for one more starter it probably will not happen. And consider this- the yanks are going to great lengths to give pettitte no more than a 10 mil dollar offer. While i agree he is probably worth less based on market standards and giving pettitte what he wants is certainly swallowing some pride and basically being used for no reason but when the yanks are pulling in massive amounts of revenue next year, the extra 2 mil to get pettitte, solidify the rotation and ensure pitching depth seems like no big deal.
Actually, the huge deal the organization and pettitte seem to be making over this negotiation which is almost like a stare down seems pretty funny or even stupid when you think about the kind of money the yanks spent, what they will make and other factors. I am not saying we should just cave in and give pettitte the money – im just saying the whole thing seems pretty silly in the big picture.
Peter Abraham-Any whispers floating around about potential trades or signings?
predictions:
moose comes out of retirement to play for another team (phillies).
yanks don’t sign pettitte, but spend more by the time spring training roles around.
Question:
I’ve asked this before, but tomorrow I want to buy spring training tickets and I’m a little confused. Will the WBC folks not play in Spring Training at all, or will they participate on certain days? is there a way to find out which days these are?
Agreed, Nick in SF. What the crap happened to the mobile-friendly version? Navigating this site is brutal on the ol’ Motorola smart phone.
Very boring post. You get a chance to blog about baseball and you waste space on concession sales. Yawn.
excellent read, much better than that whinefest crying over the 2001 World Series.
I too am wondering about the mobile version of this blog. This site is now to painful on my eyes to view on my blackjack phone.
“Agreed, Nick in SF. What the crap happened to the mobile-friendly version? Navigating this site is brutal on the ol’ Motorola smart phone.”
Maybe we need to petition Pete to have his tech people reinstall the mobile version. The site sucks on the Blackjack phone as well now.
Dave:
One thing you are leaving out is the fact the Yankees just borrowed over a billion dollars and interest to build the stadium. The money has to come from someplace.
On the flip side I think they bet a break on revenue sharing while paying for the stadium. I believe they were paying close to 100mil in revenue sharing which should go up substantially.
Nice work. I do agree, there were quite a few personal stories on here, so this was a fine change of pace.
Excelent post, best PH so far.
Let me first say I’m a huge Yankees fan and I think any change to teh current system would probably hurt the Yankees so I’m not in favour of that. However I have a couple of observations about salary caps and inequality.
A salary cap does not imply that all teams have an equal chance of winning – instead the focus shifts from being the richest team to having the smartest management. Detroit Red Wings and the Patriots are extremelly well run organisations and many/most of their competitors are not. As long as there is a big difference in smartness there will be dynasties.
Concentration of intelligence is probably not lower than concentration of money – so its unlikely that a salary cap will create that much more equality. In about 10 years ago Oakland would probably have been at least as dominant as the Yankees very if you had an NFL type salary structure.
Now people might argue that its fairer that the smart people win than that the rich people win, but then you risk getting a San Antonio Spurs dynasty which isn’t that exciting for most of the world compared to a Lakers dynasty.
The alternative way of addressing the inequality would be to try to errod the earnings base of the rich teams by allowing more competitors in the New York/Chicago/L.A/Beltway areas.
New York has two baseball teams – compare that to London where there are five Premiership football teams and a bunch of tier 2 teams trying to reach the Premiership all competing freely for sporting success and reveneues. If London had only 1 or 2 teams they would be so extremelly rich that it would be extremelly difficult for others to compete – as it is now the richest team is not from London but from Manchester.
The funny thing is free establishment of expansion teams would probably not hurt the Yankees as much as it would hurt the Mets, the Chicago teams and the LA team. Why? Because the Yankees contineously invest to keep the attention of the fan base, year in and year out.
Someone who would be really suffering would of course be Baltimore, and it would be well deserved.
I know the US sports leagues operate as communist organisations with planned ecomony and even have the Congress exemptions to do so. The idea of free competition from expansion teams is abhorrent to MLB, the NBA and all the others, but that is how you penalise the underachievers, errod the earnings capacity of the “too rich” and create geniune competition.
A concept like relegation would really stir things up but the idea is so alien to US sports that most fans don’t even know of the concept…
I have always been a Nady fan and thought getting him in the Marte deal was an awesome move by Ca$hman. I also loved the trade to get Swisher who I personally think is a much better player than his stats showed last season. I wouldn’t mind if the Yankees made a run at Nady next off-season but for this year I think he’d be the better of the two for us to trade away. I wouldn’t however be mad if it was Swisher who was traded. If they both stayed it wouldn’t be the end of the world either but business is business.
There has been a lot of Swisher bashing on here lately and I found this quote to maybe explain Swisher’s horrible season. Its one thing to hear it from fellow readers but here it is from his ex-manager. Ozzie Guillen defended Swisher at the Winter Meetings saying, “I take the blame for Nick Swisher. We put Nick Swisher on the spot. He wasn’t a center fielder and he wasn’t a leadoff hitter, and this kid showed up every day and did his best for us. Unfortunately, stuff didn’t work out for him, and I will take the responsibility for playing this guy in the wrong position and the wrong spot in the lineup.”
If we can get good position prospects or a starter to fill the rotation for X or Swish we should do it but if we end up keeping them I think people should realize Swisher is a clear step up from Betemit and at worst would strengthen our bench from last season.
By far the best guest blog yet. Well researched and I learned a few figures I did not know. Well done!
Very good post, Mike. Good luck in the World Series of Poker.
As someone who attends quite a few games, I’m hoping that Legends Hospitality Management doesnt ban outside food from being brought into the park. My family saves by bringing our own sandwiches and peanuts,but we still manage to spend over $50 on drinks.
What does Daniel Cabrera have against Yankees?
Yesterday in Winter League play, Daniel Cabrera hit Melky Cabrera on the elbow and Melky was immediately removed from the game. The severity of his injury was not currently known.
http://www.mlb.com/milb/stats/.....n_licwin_1
Daniel Cabrera plunks Melky Cabrera on the elbow.
Ugh. He’s a real health hazard to Yankees.
its nice to say a salary cap would do this or that, but those who are pushing it are forgetting one important fact: it will take a war to get one.
the players will not agree to one, so if the owners want a salary cap, they will have to be ready to shut the game down for a year or more to get one.
theoretical excersizes about what effect a salary cap would do need to start out with where the game would be immediatly after the strike. what will the game be like, what will the revenues be like after one or two seasons of no baseball, no playoffs, no world series, and no revenues. what will the mood of the fans be, what will the attendance be after a long shutdown of the game?
because none of the ‘benefits’ they would recieve from a salary cap will come to them without the pain and financial loss of no baseball for at least a year and probably more.
add to that the fact that the union has basically won every battle with the owners, so there would still be every possibility that they shut the game down, lose all that revenue, lose fans in droves and generally set baseball back a decade or so, then the union holds strong and the owners fold and we get the loss of baseball for 1-2 years and still no salary cap. dont bet against the players union.
you have to work this into any calculation of the supposed benefits of a salary cap.
imo a salary cap isnt worth it even in the abstract, but when you add in the cost of implementing it, its a pipe dream, imo.
Disregard the link. Apparently it doesn’t work all of a sudden.
Good post, Mike. I liked your choice of topic. For one thing, it’s not something that’s hashed out regularly here.
I know we joke about it, but it seems like the Yankees may actually be getting to the point where they literally do print their own money.
Dave -
I don’t think they need to spend that much more money on payroll. I think they’re in a pretty good spot with that. And there’s nothing wrong with trying to keep the payroll to some internally-decided maximum. What I do hope is that what they’ve saved on payroll they also reinvest in the team in terms of player development programs and hiring the best personnel for that facet of the team. It would certainly be money well spent and could have the added benefit of keeping the major league team’s payroll down even further (more cost-controlled players, fewer free agents maybe?).
In addition, while the cost of the new stadium does cut the amount of money the Yankees have to give to revenue sharing right now, they still have to pay the luxury tax. And it’s considerable. I can totally understand the Yankees wanting to keep that as low as they can. After all, while it’s really good for baseball’s quest for parity, it stinks for the Yankees – they now have another division rival thanks in part to the money they have had to contribute to the development of the Rays.
ok its friday, i cant contain myself any more…
LETS GO GIANTS!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
I kind of wish he blogged about his dad buying him concessions at Yankee Statdium when he was 8.
Good article. Neither salary caps or salary floors are the way to go. To stay as healthy as it is now baseball needs to let poor franchises relocate, sell their ownerships to better management, or contract if necessary. But there are always buyers and cities that seem anxious on giving it a shot. Besides, as I said on another thread here, the player’s union will want nothing to do with caps.
Baseball is as healthy as it is for a reason while all else around it is crumbling. It is one of the few businesses still relying on the free market for the most part.
Glad you found that quote by Ozzie on Swish, Giantthinker. For those who keep saying Swisher could handle CF for us, please let that one go.
Maybe with D. Cabrera now in the NL somewhere down the road we get a chance to plunk him???
And GO GIANTS!
P.S. If any of this has already been stated elsewhere by Dave, I apologize. Can’t make it to the end of most of his rather lengthy posts! (JK Dave!!!)
House that YES built?????
How bout house thtat tax payers built??
LOL
Please explain how the taxpayers (of which you may not be one) built Yankee stadium.
Good Post Mike. Most folks don’t realize – or care – about the financial aspects of a premier MLB Organization like the Yankees.
It was an interesting read.
For those old enough to be around during the Yankee Dynasties of the ’50s and ’60s, the NY Yankees were the primary focus of “what is wrong with Baseball” even then because they could (and would) spend the most money for amateur talent. The Rule 4 or First Year Player Draft was instituted by MLB, primarily to curtail the Yankees’ financial advantage in signing talent.
im not the one that said it, but the taxpayers are underwriting the bonds. this increases the city’s obligations and lowers its bond ratings. in addition, the city and state are using borrowing power that could otherwise be used for more civic minded purposes like schools and infrastructure.
add to that road and rail improvements (which would not have been done w/o the new stadium and who’s purpose is primarily to benefit the yankees customers)
the taxpayers arent building the stadium themselves but by any estimate, they are greatly contributing to it.
Couldnt agree more with all the comments from above, GREAT POST Mike!!! Best by a mile.
Anyone planning on buying ST tickets today??
Salary cap talk is a waste of time. All a salary cap does is take money from the players and gives it to the owners. That’s it. It doesn’t help competitive balance.
Salary caps in sports are calculated by taking a % of overall gross revenues, giving them to the players, and dividing it equally among each team.
Baseball players currently receive the lowest % of gross revenues (50%) than players in any sport with a salary cap.
In the NFL for example, the players receive 63% of gross revenues.
If the NFL formula was applied to MLB, each team would have a salary cap number of 155 million dollars annually.
Do you really think the Marlins, Pirates, Royals, Twins, etc, want to be forced to pay their players 155 million dollars annually?
Salary cap talk comes from uninformed members of the media and fans who don’t understand the economics of baseball.
Baseball isn’t hurting financially. Every team is making money and some are seeing double digits gains each year.
If you really want to look at how a team operates, vis a vie, whether or not they are maximizing their payroll to acquire players, you have to look at their payroll vs. their % of revenues.
The league average for good teams is about 28-35% of their gross revenues go to payroll. The Yankees have consistently been at that range throughout the Steinbrenner Era.
The Florida Marlins for example, spend 14% of their revenue on payroll. In other words, they could add another 14-21% to their payroll, and still be in good shape.
They choose not to do it. Its their choice and not something forced on them by the “evil” Yankees and their spending ways.
If you run your team intelligently, you can compete. The NFL, has the Detroit Lions, a winless team for an entire season. How has the salary cap helped the Lions, who haven’t won a playoff game in 55 years?
Sports payroll systems are not set up to overcome poor management. Its still all about running your team intelligently.
Don’t believe me? How many championships have the Yankees won since 2000? That’s after spending over 1.5 BILLION dollars on players. How has the money “won” them anything in that timeframe?
The reason why so many people are upset about the Yankees spending this off-season is not the money they have spent. Its that they spent it intelligently.
It seems that Hal Steinbrenner has the competitiveness of his father (willing to pour money back into the team for the right players) without his impulsiveness.
That scares the daylights out of people because an intelligently run Yankee organization is a dangerous one.
The salary cap talk is just masking those fears.
i agree with most of your post sj but i think the % of revenues plowed back into players salaries may be misleading.
for the marlins and other low revenue teams, teh costs of the front office, the minor leagues and stadium operations take up a much larger chunk of revenues by %. i have no idea what the #’s are but the economics of scale would tell you that the M’s spend a much higher % of thier revenue just to produce the game (non-mlb player expeditures) than the huge revenue clubs do.
i agree with your point but the % of revenue point seems shaky to me.
Ham Fighter is 100% right on the salary cap (non-)issue. It’s pointless even to discuss it. The owners are making plenty of money under the current system and aren’t going to blow up baseball for several years in order to impose a salary cap.
On the issue of taxpayer support for Yankee Stadium, it’s a legitimate point but the criticism is properly directed at NY public officials, not the Yankees. If NY residents don’t like it, they should elect leaders who will oppose such uses of taxpayer funds.
As for the OP, I thought it was an interesting read, but I would offer a small clarification: If the new stadium brings in $100 million in annual concession sales, the Yankees stand to add a fraction of that figure to its yearly profits. The numbers discussed are gross sales, not profits. As I said, if the sales are $100 million, perhaps the NYY reap $30 million in profits on the 100 extra large. Thus, merely taking the concessions biz in-house might pay for an ARod or Teixeira. That’s a big deal, but it’s not like taking over the concessions is going to foot the bill for half their payroll.
Interesting & informative, Mike. Well done. An insightful follow-up by SJ too.
If only Peter Gammons could comprehend this, we wouldn’t have to endure his bias against the ‘high-spending’ Yanks combined with the tiresome ‘my beloved Sox suffer like the small market teams when compared to the Yanks’ twist.
p.s. in my thumbnail sketch of how the taxpayers contributed heavily to the building of the stadium i forgot another very large point; that the city essentially donated the parkland its being built on. the yankees have promised some funds for the neighborhood to make up for it but they are not paying anywhere near market price (if there is such a thing for a park).
this was a heavily used park in on of the most urbanized areas in the u.s. i dont know how you put a dollar figure on that, but it is huge.
The Yankees aren’t doing anything out of the ordinary in the way the Stadium is being financed.
Just about every stadium/arena deal in the last 20 years around the country has been financed via tax free bonds.
Whether that’s good or bad is seperate issue.
Fact is, over 85% of the total cost of the new stadium is being paid by the team with their money. That’s actually higher than average for these type of projects.
Yes, they have favorable terms because of tax free financing. However, that’s how these projects are done everywhere the past 20 years.
As far as the new MetroNorth station, why should the Yankees have to pay for that? That’s a benefit to everybody that lives in the Bronx.
I could understand folks being upset with the Yankees going back to the city seeking additional help on the issues surrounding the parks, etc. That’s a legitimate beef, IMO.
However, the overall funding of the stadium is via a mechanism that is used by everybody in the business.
The Patriots had tax free bond funding when building Gillette Stadium. Same for Safeco Field, the United Center (Chicago), Citi Field, the renovations at Fenway Park, etc.
Its not some exotic finance mechanism available only to the Yankees.
To thin its the house that Yes built is absurd. We are in a huge financial crises, and the Yankees are greedily requesting hunderds of millions on unnecessary things.
Other enhancements include:
- $14.2 million for various scoreboard changes.
- $5 million for fancy public- bathroom improvements, including “burnished and glazed block” and “solid surface countertops.”
- $10.5 million for new “suite level upgrades.”
- $10.7 million for a huge new “video board.”
- $8.7 million for the team’s administrative offices.
http://www.nydailynews.com/ny_.....johns.html
im with you 100% that the credit/blame for the city and state’s contribution to the stadium ultimatly rests on the voters. im against any taxpayer support for stadiums and this one isnt particularly egregious compared to say the ones in pennsylvania that im paying for.
my post was just an answer to someone’s challenge that the stadium wasnt the house that taxpayers built (as one poster called it)
p.s. as much as i love criticizing public funds for this sort of thing, i do LOVE the 2 stadiums pa built. i think pnc park is the best non domed stadium in the country and well worth a road trip to check out. citizens bank park is also excellent but a cut behind pnc.
i hope new yorkers get as good a product for thier tax dollars as pennsylvanians did. im still against tax dollars in these stadiums.
By the way in the CNBC video from last thread it didn’t look like Joba was out of shape or a fat chunk as much as it looked like he just needs to wear the next size (or two) larger shirt. He looked just a tad on the hefty side in uniform last year and he did in that CNBC clip. The uniform shirt just fit him better than that shirt did in the clip yesterday.
It could be that his physique is naturally similar in proportion to CC’s, only not as large as CC’s. When CC came to NY, I read where someone asked him about his weight. He said something like he always works out, he’s just big and he can’t change that. And CC seems to be able to pitch OK.
The smaller market teams don’t spend more money on average for their operations at the minor league level than larger market teams. Some spend a lot, some don’t.
The Pirates for example are known for having the lowest salaries among minor league coaches and instructors in the game. Its why agents are loathe to have their college/high school clients drafted by the Pirates. They never get developed.
The Orioles, a team with a cache of cash, also spend little on their minor league coaches and support staff. Andy McPhail is beginning to change that but, they are still under the league average.
That isn’t a big market/small market issue. That’s an individual team business decision.
Do you know who spent the most money in signing bonuses in last year’s amateur draft? The Boston Red Sox, by a large margin.
Something Peter Gammons would never inform his audience.
Ham Fighter: That’s a good point (about the relatively fixed nature of certain costs). However, I would imagine that many small market teams do, in fact, have lower stadium operations costs than do big market teams. Teams like Cincy, Pittsburgh, KC, etc., are probably paying a lot less in these kinds of operating costs due to lower wage rates, fewer security guards, etc.
Also, I question whether a category like “front office” is really such an enormous expense for any team. It is, after all, an office, with a finite number of workers, the vast majority of whom are working for very modest wages.
By far the best guest post yet. The part about the Yankees founding a new LLC to take over concessions really got me thinking, considering that a Yankee Stadium hot dog and beer will run you at least $12.50.
“As far as the new MetroNorth station, why should the Yankees have to pay for that? That’s a benefit to everybody that lives in the Bronx.”
this is disengenuious. if the city/state wanted to facilitate better metro north service to the benefit of bronx residents, they wouldnt be putting it down by the river away from where everybody lives. it will actually be of alot more benefit to people from westchester, connecticut and parts north. im not against funding mass transit for this project, especially since i always use it to get to the game, but lets not kid ourselves and say the station is there to benefit bronx residents.
Excellent point Ham Fighters
ham fighters …
The track form the Metro North runs along the water. Not matter how far up or down the river you go on the Metro North Hundson Line, the stations are near the water. The bus & subway lines get you close, and you skip over.
Joba isn’t out of shape. He has been in Tampa, under Yankee supervision, working out for most of the winter.
They have him on a new program designed to create more flexibility in his hamstrings and hips. The theory being that if he is more flexible, his delievery will be smoother and it will lessen the strain on his shoulder.
His conditioning is not an issue. His wardrobe? That’s a whole different story.
just think what might or might not have happened had the owners of the giants not pushed the yankees out of the polo grounds way back in 1920! the giants might still own new york and the yankees might be the mets. or better analogy stadiumwise, the jets.
Nice post.
i was just about to say jobas look had nothing to do with fitness and everything to do with bad taste in clothing.
“It seems that Hal Steinbrenner has the competitiveness of his father (willing to pour money back into the team for the right players) without his impulsiveness.
That scares the daylights out of people because an intelligently run Yankee organization is a dangerous one.”
sj-
i think it’s too early to jump on the bandwagon for hal because the yankees haven’t won anything yet. on paper, great moves, but you know from your experience in business adding parts is just the beginning. how does it all get put together ? when the” haze of war” starts,does hal keep his cool and make good decisions or does he panic and make bad decisions? does he actually execute the developmental plans that sound so good?
i’m also wonder about his new found interest in baseball. how deep does the interest go? i’m pretty sure in your life ypu’ve spent more time on baseball than hal has. does he really love the game? i’m not so sure. he didn’t pay much attention to it most of his life when he had every opportunity to.
that said, the team seems like it’s made steps forward as far as management and hal seems to be stepping up into a leadership position. i just need to see some results before going overboard in praise of him.
…there’s one other thing. the hair. can we really take someone serious who looks like he spends more time on his hair than our wives or girlfriends? lol.
SJ – The Red Sox spent $10M in signing bonuses in the last draft. And I don’t believe that it was the highest “by a large margin.” They have readily acknowledged that, and embrace that philosophy within the realm of “player development.” Burnett will get that much money before August. The Yqankees will sell that many hot dogs by May. What’s the big deal?
Also, several other teams have started to go in that direction (e.g. paying over slot). The Yankees have been paying over slot for years, as well.
As I recall, the only reason that the Yankees aren’t in the discussion of 2008 draft bonuses is because they failed to sign two of their top choices.
Randy,
Its not up to Hal to make the parts fit on the field. That’s up to Girardi.
All he (Hal) can do is allocate the resources and he is doing that.
They didn’t have a single plan that included Tex and CC on the payroll this year. All of their off-season projections contained one or the other.
Cashman was intriqued by the prospect of having Tex if the numbers fit. However, even he thought it would be doubtful after they signed CC.
Hal was the guy who listening to the reasoning behind adding Tex and agreed to do so. He could have just held the line. But, he listened and changed his mind. That’s pretty solid if you ask me.
He was around the team all season. He just has a lower profile than he father and lets the baseball people run the baseball operation. Another departure from dad.
From an ownership perspective, that’s all you can ask the guy to do.
The guys they added made sense from a baseball perspective. More importantly, they are good guys. Something that was missing the last time they had to make choices (Shef vs. Vlad, RJ vs. Beltran) for players of this magnitude.
All I want from an owner of a team I root for is to allocate the necessary funds to win and stay out of the way. Hal has done that.
As far as whether they win or not, that’s out of his control. All he can do is watch the games. He has no influence on their outcome.
Brian,
The Red Sox paid 30% more in signing bonuses than any other team in the game this past season. That’s ok with me, I don’t have a problem with it.
They just can’t whine about spending when they are outspending everybody in the amateur draft.
Unlike free agency, which awards players who have actually played in the majors for a period of time, spending a lot in the amateur draft does more to hurt small market teams than the Yankees free agency spending.
Small market teams were never going to sign CC, AJ or Tex. When a large market team cannibalizes the amateur draft, that directly impacts small market teams.
Again, I have no problem with them doing it. They just can’t be hypocritical about it when it comes to the Yankees and how they spend their money.
mike -
good post. great info about the yankees new concession business. now the trick is to get the contracts at some other ballparks and get other less entrepreneurial teams money for the yankees.
no other team would be that stupid would they?
Great job, very informative. So maybe in the next few years our payroll will be 250.
take that Pirates owner!
http://www.cnbc.com/id/28544778
Darren: A lot of talk as well about the tax-exempt bonds that the Yankees and Mets have asked for. The Yankees, in total, asking for more than $1 billion worth of bonds. You used to work in the Mayor’s office. How does this make sense to the taxpayer?
*Levine: We’ll, I’d like to make this very clear. The way this stadium is being constructed and financed, every single penny, every single penny, is going to be paid for by the New York Yankees. There are no taxpayer funds that are being used to fund this stadium, which is different from 99.9 percent of stadiums all over the world. No taxpayer money will be used to fund this stadium. The Yankees are funding the entire bill of the construction and, unlike today, the maintenance and operation of the stadium. The Yankees are on the hook, there’s no liability for the city or any governmental agency. So this is a $1.3 billion investment in the poorest congressional district in the country. It’s the largest investment in the Bronx and, in these hard times, this has generated over 6,000 construction jobs by moving us across the street from the old Yankee Stadium to the new Yankee Stadium, we’re going to create approximately 1,000 new jobs. So this is a good thing.*
========
There. Enough already.
I enjoyed this guest post as well; thanks.
Before I make my point, let me state for the record that I like Brian Cashman and pulled for him to resign earlier this year… however: Had there been a salary cap in place the last 10 years, does anyone believe the Yankees would’ve had much success? Player evaluation has never been a strong point- by a long shot. My point is not the the typical “The Yankees buy victories! Horrors!” What the Yankees buy is the ability to make terribly costly mistakes with none of the real accountability that a salary cap demands.
I guess my point (and maybe it’s an obvious one) is that the absence of an MLB salary cap has been covering questionable decisions by Cashman for years.
If we all agree that a GM would never have succeeded on a tight budget, how great is he?
BTW: In the second line, I meant re-sign, as opposed to resign. Didn’t know if it was obvious…
Do yourself a favor. Don’t take Randy Levine’s world as gospel on anything.
There are some points in that statement that anybody with a sliver of knowledge into how these deals are done can challenge.
The Yankees are on the hook for a big chunk of the Stadium. No question about that.
They aren’t on the hook, nor have they ever been, for all of it.
Its a better deal for the city than the Daily News reports in their series of stories about the project. However, its not nearly as great a deal as Levine promoted in that CNBC interview.
Its why sometimes its better to say nothing, keep your head down, and do your job.
When you open your mouth, too many things come out of it that can be challenged.
http://yonkerstribune.typepad......-jobs.html
“All I want from an owner of a team I root for is to allocate the necessary funds to win and stay out of the way. Hal has done that.”
sj-
i’m partly responding to your and cb’s enthusiasm for hal’s overall management skills . i just need to see more. i agree about most good owners delegating and staying out of the way, but the yankees seem to have a gap in management if ha were really going to do that. there seems to be a big management gap between the hal and cashman. on the red sox, lucchino fills that gap. randy levine doesn’t really seem to fit the same role on the yankees.
i think more is needed from hal than just okaying spending money. someone needs to make sure that all the parts at all levels come together.
http://riveraveblues.com/2008/.....ough-6248/
SJ …. agreed about hurting small market teams with the draft strategy. And I don’t think that the Sox actually whine about Yankee spending (their fans are a different story). The Sox fully realize that the present system benefits them, as well.
I do believe that the Sox play a PR game (coining “The Evil Empire” was a master stroke), where they try to distance themselves from the Yankees in term of “Fat Cat-ism.”
In that way, their triumphs seem the greater, the Yankee triumphs the lesser, and Yankee failures the more shameful. That’s the Sox spin, and the Yankees spin back with “We put our profits back into the product – for our fans.”
It’s all propaganda, in the long run. But it least it helps to heat up a cold January.
Correct me if I’m wrong, but it appears to me that January is traditionally a slow month for baseball news.
Randy,
How does Lucchino put bring that together in Boston? He singlehandedly blew the Teixeira deal and had to be contractually mandated to stay away from Theo Epstein and the baseball operation. He’s more of a problem than a solution to many, non-marketing/business issues in Boston.
He is a marketing guy. He’s not a baseball guy.
The Yankees are filling their baseball gaps by having Stick, Mark Newman, Bill Livesey take on bigger roles. Jean Afterman handles contracts and player benefits.
They are putting together a baseball operation. The guy has only run the team for a little under a year and a half.
In that time, they have reduced payroll and added younger, more athletic and better players.
The only screw ups have been Michael Inoa and the draft of last year. Guys were fired for those screwups. Hopefully they learned their lesson from those mistakes.
Now THAT was a post worth reading. Excellent work, Mike! As a frequent traveller to the areas just north of SD, I’ll make sure to find you for a beverage!
Brian,
When Peter Gammons whines about the Yankees, he is speaking for the Red Sox. He’s their shill and everybody knows he speaks for the team everytime he opens his mouth these days.
When John Henry sends out a press release talking about the “financial gaps between the Yankees and Red Sox”, he’s whining.
I don’t remember a press release from the Yankees after the Red Sox blew everybody out of the water on the Dice-K bid decrying the Red Sox spending.
I agree with you its all posturing and most of it is BS to sell their POV to their fan bases.
But, its out there and it always seems to come from one place. I can’t remember any time the Yankees lost a player to the Red Sox and put out a press release decrying finances.
if i understand this financing correctly, the system is this, the city sells the bonds and loans the money to the yankees. the yankees build the stadium with that money. it is public money that the yankees promise to pay (most of) back. they are borrowing on the city’s credit card to build the stadium and promising to pay the bill.
why would they do it this way instead of borrowing it themselves? because the city pays less for the money than the yankees would, i would guess. this results in huge savings for the yankees.
do i have that about right?
Ham,
Yes. The city can obtain tax free funding. The Yankees cannot as a private entity. That’s why its more preferable for teams to finance stadiums/arenas this way.
That’s how its been done in the past 20 years.
The issue of whether or not cities/states should do this is a seperate argument, IMO.
new post. i agree that this is the norm and the final cost is less than most projects. i just think randy’s comments and other things that have been said have misled alot of yankees fans into thinking there is no public money here. in fact its all public money until it gets paid back. it will be paid back i just think people should understand the involvement of city/state dollars in this project.
” He singlehandedly blew the Teixeira deal and had to be contractually mandated to stay away from Theo Epstein and the baseball operation.”
sj-
if he was just a marketing guy then he wouldn’t have been in a position to blow the teixeira deal. i don’t like lucchino , but he does seem to have a large role in the red sox management team that goes beyond just marketing.
the a massive amount of money was spent on free agents, but that doesn’t mean the team is being run better overall. you seem confident that hal is creating a better yankee management. that’s good news if it’s true because the yankees have been getting their lunch handed to them by red sox management for the past few years.
if that truly gets hal’s competitive juices going, that’s great. i’m open to the idea that hal will be a great owner. it takes more than just signing a few players though.
correction: “there was a massive amount of money spent on free agents,”
(just got a new mackbook and it’s got a mind of it’s own with deleting phrases and words)
Lucchino is a part owner. However, his background is marketing, not baseball.
He gets involved because he’s an owner. He is contractually forbidden from being involved in the day to day baseball operation.
I’m sure if the Red Sox had a “do over”, they would have left him in Boston instead of taking him to Dallas for the Tex meeting.
That’s on John Henry. He wanted him there and he got what he “paid” for. lol
ham fighters
January 9th, 2009 at 9:23 am
if i understand this financing correctly, the system is this, the city sells the bonds and loans the money to the yankees. the yankees build the stadium with that money. it is public money that the yankees promise to pay (most of) back. they are borrowing on the city’s credit card to build the stadium and promising to pay the bill.
why would they do it this way instead of borrowing it themselves? because the city pays less for the money than the yankees would, i would guess. this results in huge savings for the yankees.
do i have that about right?
————————————————————
Sounds like smart business. like going shopping at 3 or 4 Ford dealers and getting the lowest cost an financing on a Mustang or getting the lowest finance rate on bank credit cards.
sj-
to me , the biggest indication the yankees have made dramatic improvement is that
brian ( red sox fan) is so up in arms about yankee spending.
and yes brian , i’m tweaking you. have you heard they are thinking of moving pedroia to catcher to replace varitek?
they figure that because he won’t have to squat to receive the ball that he’ll be able to pick up catching pretty fast.
That’s a lot of interesting information in the guest blog, thanks Mike.
The SWB Yankees fired their concessionaire this week, I assume paving the way for Legends Hospitality Management.
http://www.citizensvoice.com/a.....06_loc.txt
http://www.citizensvoice.com/a.....47_loc.txt
well, its good buisness 4 the yankees but not for the city and state and the taxpayers, although they do get paid back.
im against this kind of public spending on sports teams.
i was a taxpayer in new york state at the time the deal was struck, but now im a taxpayer in pennsylvania. so in effect, im not paying for new yankee stadium and citi field, but i am paying for heinz field, pnc park, citizens bank park, lincoln financial field the wachovia center and a bunch of others im sure.
Hal Steinbrenner’s method of operation has to be liked at this point. He does what his father did little of and that’s listen.
When George wanted a marquee name, he simply instructed all of the GM’s he had to “just get him” and cost was never an issue. He personally negotiated the Sheffield signing and re-signing and the last player that Cashman had no input on was Randy Johnson.
Hal trusts Cashman and his entire advisory group. They know what their roles are.
Excellent post! You write very well and you back up your points. I’ll be sure to check out your blog from here on in. Your piece has been by far the most professionally written and interesting of Pete’s pinch hitters so far. Keep it up!
Excellent guest blogging Mike!!!!!! Thank you for not posting about your religion, or whining about 2001, or trying to write the sequel to a literary classic. Semper Fie!!!!!
As much of a cash cow the new stadium will be for the Yankees…. and they will be printing money there, believe me….. I predict that within five years, the Yankees will will even sell naming rights to the stadium, and probably for something close to $1 billion. Its just too much money for them to resist.
If they can tear down a shrine like Yankee Stadium for more money, they sure as heck can work with Bristol Myers’ Yankee Stadium.
It’s nice to see Yankee Global Enterprises buck the current recessionary trend and “insource” rather than outsource their concession business. The concession profits could potentially be equivalent to the Marlins payroll. Maybe the Marlins can learn something here.
If they can call the stadium: Business Name–Yankee Stadium, then it is silly not to sell the rights and pocket the easy money and give a higher quality buffet for the media. No doubt that will happen.
Rafael O.
To think its the house that Yes built is absurd. We are in a huge financial crises, and the Yankees are greedily requesting hundreds of millions on unnecessary things.
************
actually th way to get out of this huge financial crisis is exactly that..
spend money on unnecessary things like out of date car companies
spending money is the new patriotism
go on wrap yourself in the flag and buy Spring Training tickets
RonH – thanks for that info. Interesting.
As for the “House that YES Build” comment – is YES financing the entire stadium? No, of course not. I believe however without the switch to YES there wouldn’t have been plans for a new park at all. The revenue gained from that venture spurred the thinking and if nothing else, accelerated the process.
Thanks for the comments.
“As long as they continue to sink it back into the team on the field (and – through luxury taxes – the rest of MLB) then count me as satisfied.”
Yeah, they could do that or just charge a little bit less for hot dogs.
This was one of the best guest blogs I’ve read thus far. I’ve never thought about the money the Yankees make on these seemingly periphery operations. Again, great blog, Mike.