Maury Brown of The Biz of Baseball recently wrote about the Yankees profligate spending over the last decade in an article special to MLB Trade Rumors. Here was his basic point:
To be exact, I have now have pulled together end of year payroll figures for the last decade. In looking over the totals, this much is clear: the Yankees spend, and outspend all comers by a considerable margin.
To place this in perspective, the Yankees have never ranked any lower than 2nd in total player payroll at the end of a season since 1999. At the end of the 2001 season they had a player payroll of $114,457,768, second only to the Dodgers at $115,478,346.
But, what should show how much more George Steinbrenner and Co. enjoy spending is that the Yankees have spent over 42 percent more than the Red Sox over the last decade, and have exceptionally close outcomes.
I took issue with the implication that the Yankees spend inefficiently from a business perspective, and the following email exchange occurred, excerpted and reprinted with Maury’s permission, with my initial email first:
I understand the purpose of figuring out the cost of a win, but wouldn’t you say that the club really does not care about how much they are paying per win as much as they care about the expansion of the brand? Fact is, the Yankees of the last 15 years have gone from being a team to a brand, as you have noted in the past, and their big spending definitely helps in that regard. Even if the spending is not entirely efficient, big time free agents bring people to the ballpark and makes them turn on their TV sets. I would guess that if you compared payroll to increase in total profits since the mid 90′s, you might find that the Yankees as an enterprise do better than everyone else. My point is, that they definitely would like to be more efficient, but some of the things that they do that may be inefficient from a baseball perspective are profitable. Thoughts?
Possibly, but I would say that the growth of the Yankee brand comes from the World Series wins and mostly, plus the players developed, not gained through FA. While A-Rod is certainly an FA that draws, Rivera, Posada, Jeter, Bernie Williams, etc. came up through the system.
My contention is that spending in high figures in and of itself is not bad. However, one could argue that if the reasoning for the spending has to do with competing with the Red Sox, they have overspent. A classic example is the deal given Burnett this off-season… Over market value. There are other examples… Pavano is a great case.
All that said, the growth of the Yankee brand has occurred in part from some FA signings. The foundation, however, has been built on the veterans of the club that were developed.
Thanks for getting back to me, and I would agree with much of your point. However, I think that something like resigning A-Rod last offseason was more about star power than baseball. I bet they resign Jeter in a few years to a contract well above market, for the same reason- Jeter is a part of the Yankee brand. I just think that the difference in spending between the two clubs comes from the fact that not all of the Yankees moves are made with baseball in mind. The Yankees would never replace Nomar with Cabrera and Meintkeiwicz, purely from a business point of view. When they lose Pettitte, they dont dip into the minors, they trade for Kevin Brown. Some of these make baseball sense, but the need to have big names definitely plays a part.
Maury later added:
There are very, very rare occasions where a player’s star value can be quantified. Manny with the Dodgers could be easily seen, and certainly Fernandomania was another. But, the Yankees as a brand are bigger than some of its players. Jeter is the face, and I would sign him, just as they did with Rivera. But, beyond that, all the players appear expendable from a star power draw point, and that includes A-Rod.
When A-Rod joined the Rangers, television ratings went down. When he left, they went up. Winning cures all ills, or if you are the Yankees, Red Sox, and Cubs in the last 10-15 years, your brand is a greater draw than all but a handful of names on the team. When I go to see the Yankees, it’s to see the name associated with all the incredible history. The players are simply part of that great legacy.
I concluded the exchange with the following:
Well said. I would just point out that Yankees attendance went up in every year since 2000, even though they stopped winning championships. The Yankee brand in of itself is plenty, and combined with winning it makes for large numbers at the gate. But I wonder why those numbers went up even after the titles stopped, which leads me to the big free agents thing. When you win the offseason, you create excitement, and people run out and buy tickets to see the “new and improved” Yankees before a single inning is played.
Where do you stand on the issue? Do you agree with Maury, and feel that the Yankees have spent inefficiently with no real added benefit from their higher spending when compared to a team like Boston? Or would you side with me, and feel that the Yankees sometimes make inefficient baseball decisions because they are better for business and the Yankee Brand?