The common line is that right now, the Yankees have about 2 million dollars left in their budget for the 2010 season. I think that this is entirely plausible. Hal Steinnerbrenner gave Brian Cashman a hard number, and said that he would have to approve any spending over that number. He did so last year with Andy Pettitte, and I think we’re going to see the same thing with Johnny Damon.

On one hand, the Yankees needed a budget. In both the free agent market and the draft, they often found themselves taken advantage of by free agents. I would probably put Jorge Posada and Mariano Rivera in this category (both received over market value contracts), I would probably expect Derek Jeter to sit there after this season, and I definitely think that Johnny Damon expected the same thing to happen to him.

Think of it this way: Andrew Brackman got almost 5 million dollars guaranteed from the Yankees even though everyone in the world knew he needed Tommy John surgery. Teams have been able to on an individual level leverage the Yankees needs against their individual budget. Without short term alternatives (the Yankees weren’t going to go out and find other players instead of Posada and Mariano) or a hard budget, individual were able to game the market to get much more money than any other team would have paid them. I honestly believe that Damon thought that he could get a Mo-like deal this offseason – 3 years at his current salary. The hard budget – even though the Yankees could spend a lot more and still make a profit – removes their leverage.

Johnny Damon could probably be had for about 6-7 million dollars. Xavier Nady signed today for 3.3 million with incentives, so we’re probably looking at a Baldelli type as the best possible solution for 2 million dollars. Reed Johnson will probably close to the Nady range, and there isn’t much else out there. But let’s say that the choice is between Johnson at 2 million and Damon at 7 million.

I think it makes rational economic sense for Hal Steinbrenner to pay the extra 5 million dollars for Johnny Damon. Reed Johnson is a decent little player. So are Brett Gardner and Rocco Baldelli. They all have their strengths. However, they aren’t on the same level as Johnny Damon. Damon had one of the best offensive years of his career last year. A batting line of .282/.365/.489 is damned impressive, and there is reason to believe that he’ll be a better defensive player too. There is a very good chance that he is worth twice the potential salary in 2010. His power surge may be due to Yankee Stadium, but the fences aren’t being moved in any time soon, so it may be here to stay.

In addition, signing Damon helps the Yankees bench. With Austin Jackson gone, the team is very short on outfield depth. Brett Gardner would become one of the better 4th outfielders in the major leagues, and a major defensive and speed asset off the bench. I hate the term “situational hitting”, but there are certainly a lot of situations where Gardner will be useful, and he’s well above replacement level in case of injury.

But the 5 million dollar difference is all about marginal value. The Yankees face a very tough fight for the division this year. A lot of Yankees are ripe for regression, and the Red Sox added a lot of talent to their already great roster. I think that the Yankees are still the better team on paper, but Damon would give them considerable insurance in the division. Making the playoffs will be a huge economic plus for the Yankees. It will make them tens of millions of dollars – more if they advance to or win the World Series. The payroll spent on the team is a considerable investment that should be protected.

Let’s assume that the team budget is 210 million. Damon’s extra 5 million pushes it to 215 million. Let’s say that on average, missing the playoffs will cost the Yankees 50 million dollars. This are abitrary numbers, I know. But a quick and dirty calculation tells you that if Damon increases the Yankees chance of making the playoffs by 1 in 10, then it is a good bet.

The division is very tight. The Twins, Rangers, Mariners, Rays, Red Sox, Yankees, and maybe a mystery team or two will be fighting for the Wild Card slot. If the Yankees suffer a major injury or two, they could very well end up fighting for their playoffs lives. But Damon makes them one injury deeper. If I were Hal Steinbrenner, I’d stare at that big pot of playoff money (not to mention benefit to the Yankee brand) and poney up the relatively small extra cash. The 210 million is already spent. All he has to think about is “5 million or not”. Its  the right decision.

I think that he’ll take it. I think that we’ve seen a lot of posturing on Cashman’s part, and it certainly seems to have spooked Damon, who was a fool to turn down a 2-year contract. But I very much expect Johnny Damon to enter spring training as a member of the New York Yankees.

My bet is Tuesday. Any takers?

From Joel Serman (h/t to Fack Youk), we get an interesting report on the Yankee ownership’s unwillingness to spend past their stated budget:

The Yankees are telling agents that they only have $2 million, at most, to spend on a left fielder. They figure Damon, even in a diminishing market, would never drop his demands that low. The Yanks being the Yanks, of course, could always just create extra money in the budget as they did last year when GM Brian Cashman successfully lobbied Hal Steinbrenner to add Andy Pettitte’s $5.5 million base plus makeable incentives to the payroll. [snip] After having won the World Series, ownership is not quite as compelled to blow up the budget again.

Hal Steinbrenner, after all, has shown a much greater willingness to hold to some financial guidelines than his father, George, did. For example, the Post has learned, the Yanks had a completed trade last July with Milwaukee for Mike Cameron, pending ownership’s blessing to take on the money. But Hal Steinbrenner refused to add the approximately $5.5 million in salary and luxury tax it would have cost for the rest of the season, so the deal was scrapped.

It seems that Johnny Damon is unlikely to return to New York unless his price drops to a point where he is certain to be snapped up by another club. In fact, 2 million may not be enough to obtain Xavier Nady, and might be barely enough to bring in a player like Xavier Nady. The Yankees are trying to be fiscally responsible for the first time since George Steinbrenner bought the team, and it seems like they are being run more like a business than ever before. While fans may not love that idea, I cannot fault the club for the manner in which they cap their spending. Ultimately, the goal of a business owner is to limit costs and maximize revenues. If the Steinbrenners truly believe that they can consistently win under the current budget (and there is no reason to believe otherwise), then it is within their rights to hold the line at an already exorbitant 200M in salaries.

From Stewart Mandel (SI):

NEW YORK — New York Yankees owner Hal Steinbrenner, New York City mayor Michael Bloomberg and the commissioners of the Big East and Big 12 will announce at a news conference Wednesday the formation of the Yankee Bowl, to be held at the new Yankee Stadium beginning with the 2010-11 postseason, according to sources with knowledge of the event.

The game, which will seek NCAA certification next spring, would reportedly pit the Big East’s fourth-place team against the Big 12’s No. 7 selection. Organizers plan to hold the first edition between Dec. 29, 2010 and Jan. 2, 2011.

With Hal Steinbrenner as the leading figure in the Yankees’ organization, it has become exceedingly clear that the new Yankee Stadium will be host to an assortment of non-baseball events, especially football games. It seems as though the Yankees intend on showcasing Yankee Stadium as a sports venue, rather than just a baseball park. I don’t really have any problems with that, as the old Stadium was also host to a number of non-baseball events. I just hope they don’t go overboard.

From George King (NY Post):

At Friday’s trade deadline, the Yankees added utilityman Jerry Hairston Jr. and nothing else. Not wanting to add payroll, the Yanks weren’t serious players for lefty Jarrod Washburn, who went from Seattle to Detroit.

So, what are the chances of making a deal now that a player has to clear waivers in order to be traded?

“Who knows — if it makes sense we will look at it,” GM Brian Cashman said. “There will be opportunity for people to do deals in the new deadline. What that means for us remains to be seen.”

If Hal Steinbrenner didn’t allow Cashman to take on significant money before July 31, it’s unlikely he will do so now. However, the Yankees are locked in a tight race with the Red Sox, and if Aceves isn’t right and Mitre continues to get spanked, they will be forced to make upgrades.

Multiple sources said yesterday that players will get through waivers this year more than in recent years due to teams not wanting to get stuck with a contract via the claim process.

King is basically saying that Hal Steinbrenner prohibited significant payroll additions at the trade deadline. He also says that, because of financial concerns, the Yankees were never serious players for Jarrod Washburn. That can be disputed, however, as Bryan Hoch notes that the Yankees didn’t make a serious play at Washburn because Seattle’s demands were too high. They reportedly wanted Austin Jackson, which wasn’t going to happen—not for a 2-month rental. Still, as Steve Lombardi points out, the Yankees could have bargained with the Mariners, right? Sure they wanted A-Jax—everyone asks for a team’s top prospects at the outset—but considering what they got for Washburn from the Tigers, it seems as though they would have lowered their demands if Cashman was truly persistent. What, then, is the truth? Did financial concerns limit Cashman or was it the Mariners and their unreasonable requests?

In the end, I believe that the Yankees didn’t want to take on Washburn’s contract which ultimately explains why he isn’t with the team today. Everything they’ve said about the M’s wanting A-Jax is simply disinformation to make it look like they actually tried to get Washburn. We heard numerous reports leading up to the trade deadline claiming that the Yankees wanted teams to pay the salaries of trade targets like Bronson Arroyo and Brian Bannister, which support this theory. Based on the information at hand, it really seems like the Yankees aren’t going to make anymore moves this year unless they are absolutely forced to—not because of unfair trade packages, but because of Hal Steinbrenner’s fiscal philosophy.

From Joel Sherman (NY Post):

The Yanks are among the teams that have checked in on Washburn. However, as of this afternoon the two sides still had not discussed names. In addition, Hal Steinbrenner has ruled that the team cannot take on significant money the rest of the season. That is a huge reason why the Yanks are not players on Roy Halladay. Washburn has about $3.7 million owed to him the remainder of the season, which could be a hurdle for the Yanks.

$3.7 million a hurdle for the Yankees? The Yankees can’t absorb that? Is this legit or is it just posturing? What’s interesting here is the dynamic Hal Steinbrenner adds to the Yankees. Hal is characterized as the frugal spender, one who is restrained and conservative with his wallet. However, is that merely an image that helps the Yankees posture with other teams, forcing them to eat significant chunks of a contract, or, is it actually true? He did open up the bank for Mark Teixeira, however, that was something that Brian Cashman had to convince him to do (reportedly). Based on what happens at the trade deadline, whether it involves Washburn or another player, we could find out what Hal’s all about in terms of his financial flexibility.

SI.com has a feature on the best owners in the sport, and the Steinbrenner family comes in at number 4:

If you’re one of those fans who believe the Boss & Family are ruining baseball with their liberal spending, well, there’s a case to put them in the worst category. But if you’re a Yankees fan, you couldn’t ask for a better owner. The Steinbrenners run a billion-dollar organization that treasures professionalism and success above everything else. They’re as committed as any team in professional sports, both at putting a superstar product onto the field and building the brand into one of the most powerful in the sporting world. And even though it’s been nine years since they last won a World Series, the family’s devotion to improving the team in any way possible is beyond a doubt — no matter the cost. You may not like them, but admit it — you’re envious.

The Steinbrenners come in just ahead of Stu Sternberg of the Rays, while landing behind the Red Sox group (#1), Arturo Moreno of the Angels (#2), and Bill DeWItt of the Cardinals. I am not sure how DeWitt comes in ahead of the Steinbrenners, nor do I see how Sternberg touches this list after one good season. I think you could quibble with the order of the other selections, but you would be splitting hairs and would likely need a more precise definition of what makes a good owner to really make an argument. I do think that it is interesting to note that none of the owners on the list outside of the Steinbrenners have owned their team for more than 15 years, and all except DeWitt purchased their clubs in the last seven years. Seems to me that we may have a bias here towards recent owners who have had success this decade.

What do you think about the list?

Three quick bits to cap off the night:

1. Hal Steinbrenner spoke on WFAN today and discussed a variety of topics, although he didn’t speak at length about The Yankee Years, Joe Torre’s new book that’s due out next month.

2. Also, the new Yankee Stadium continues to cause controversy. This time, however, it’s about the parks that were supposed to be built around the new Stadium. Essentially, the cost of these parks are rising significantly, which isn’t exactly helping burdened taxpayers.

3. Finally, a few months ago we heard about a concrete-testing company that apparently performed fake tests on concrete and steel at the new YS. Well, Testwell Laboratories (nice name) actually sued NYC in order to overturn a license suspension. Of course, they won and the suspension has been overturned, albeit temporarily.