A franchise at a crossroads

Ortiz coughs up another save in Tampa loss
If A-Rod tipped pitches, it didn't work

Over the last few years with the rise of the new Stadium and the fall of George Steinbrenner, we’ve written a lot about the Yanks’ current upper management structure. Between George’s declining health and the Jennifer Steinbrenner/Steve Swindal divorce, the Yanks went enjoying a solid leadership to suffering through a few years of turmoil.

Right now, Hal Steinbrenner appears to be the one with the power, and he shares it with his brother Hank. Helping him out — and seemingly taking the PR fall — are Randy Levine and Lonn Trost. Late this week, we learned that Trost and Levine may be working on borrowed time. With the team facing a lot of criticism for the way it has handled aspects of the new stadium, the Steinbrenners may look to assert their power and shore up public support.

All of these behind-the-scenes machinations are simply reminders of the unilateral power George Steinbrenner held. Earlier this week, Wayne G. McDonnell, Jr, a contributor to Maury Brown’s Biz of Business and a professor of sports management at NYU, opined on the Yankees. Is this, he wondered, an organization in transition or one being mismanaged?

There is no denying that the New York Yankees have had an awkward and inauspicious beginning to the post George Steinbrenner era both on and off the field. Whether it is selling grossly overpriced stadium memorabilia to the masses or engaging in a war of words with the commissioner of Major League Soccer, the new leaders of the Yankees have already encountered countless obstacles. While the new ball park is extraordinary and surprisingly captures the essence of the old Yankee Stadium, the pricing model is flawed and needs substantial revision to reflect the current market conditions. The Yankees’ overtly aggressive pursuit of the white collar audience is alarming since this type of customer is quickly becoming extinct.

What’s even more disheartening is that the throngs of fiscally challenged Yankee fans have to actively survey the secondary ticket market for affordability instead of desired seat locations. Season ticket holders are now starting to feel the pinch of the prices at the new ball park and they are expeditiously liquidating their ticket inventories at discounts. To put it simply, customers are paying premium prices for a pedestrian product. The constant dependence on the free agent market has been a detriment to the organization. Even though the Yankees have spent almost a half a billion dollars on three ball players this past offseason, they are still mired in mediocrity and struggling with the implementation of cutting edge ideas regarding player development. Fans are paying prices fitting for a team like the 1998 Yankees. Instead, they are receiving the 2008 version…

The new ownership group of the Yankees has made a few gaffes. But, it is not their fault that the economy has imploded and we are now living in a world of unforeseen disarray. Unfortunately, they are a victim of bad timing. Just like our economy, the New York Yankees are trying to learn how to conduct business in an effective and efficient manner. However, they also have to learn how to accommodate baseball fans and make each person who walks through the turn stile feel valuable and important. Only time will tell if the New York Yankees are ready to compete in a world of economic uncertainty or will they adhere to their irrational ideals and principles.

While I’ve been critical of the Yankees’ decisions and many of their public statements, McDonnell is right to question the economics of it and the state of the organization. The Yankees are engaged in what is basically a case study of sports economics. How far can a team push the envelope and still maintain its fan base, its revenue base and its identity? We don’t have yet the answers, but it’s something to ponder on a Sunday morning.

Ortiz coughs up another save in Tampa loss
If A-Rod tipped pitches, it didn't work
  • http://theyankeeuniverse.com Moshe Mandel

    I agree with most of what he says, except for this:

    “To put it simply, customers are paying premium prices for a pedestrian product. The constant dependence on the free agent market has been a detriment to the organization. Even though the Yankees have spent almost a half a billion dollars on three ball players this past offseason, they are still mired in mediocrity and struggling with the implementation of cutting edge ideas regarding player development. Fans are paying prices fitting for a team like the 1998 Yankees. Instead, they are receiving the 2008 version…”

    Quite frankly, this makes little sense. The 1998 Yankees come around once every 30 years, at best, and a dynasty like that team is just as infrequent. While you can argue about the success of the Yankees player development innovation, to call a club that contends for a pennant every season mediocre is really pushing it to make a point. The problem is not that people are paying premium prices for mediocrity. It is that the Yankees are charging in excess of premium prices for their premium product. Yankees tickets should cost more than any ticket in baseball, just not that much more.

    • Bob Stone

      Extremely well said.

  • V

    “Even though the Yankees have spent almost a half a billion dollars on three ball players this past offseason, they are still mired in mediocrity”

    :snort: That aside is worthy of Lanny.

    “and struggling with the implementation of cutting edge ideas regarding player development.”

    Agreed here. They should be flexing their financial might and DOMINATING international scouting, pushing the boundaries of physical training and injury prevention, etc. Heck, it’d be nice if they had a radar gun that worked (and I’d love it if YES had a K-zone and that pitch-tracker thingy Sports NY has for Mets games).

    Tampa Bay opened a baseball academy in Brazil – why can’t the Yankees do that? The Red Sox are known for having one of the BEST training staffs in baseball – why not compete there?

    • El Generalissimo

      Agreed.

      Maybe even its time to go back to charging less for the premium seats but not including food in them, so they make up some of the cost that way. I feel there is a lot to change, but that was and is always the case when you move into a new stadium–needs to get worked in, need to fix a few problems, change some stuff… this is all part of regular business.

      It does seem like it’s a upper management in transition and maybe it wouldnt hurt to fire trost and levine and bring in some new blood to run the show.

    • steve (different one)

      the yankees have training academies in the DR…how many major leaguers are from brazil??

      • V

        So far? None. That’s why it takes actual FORESIGHT to start an academy there, as the Rays have done.

        How many strong athletes does Brazil produce. MANY – they just all play soccer.

        Maybe the Rays get a handful of major leaguers over the next three decades – that would more than pay for the academy.

        • Clayton

          But the Yanks have an academy in China and there’s like, what a billion people there?

          • JobaWockeeZ

            In China? I don’t know many Chinese major leaguers, can you name me one?
            I’d understand Japan or even South Korea though.

            • steve (different one)

              read the post this was in response to.

  • Tank the Frank

    “Even though the Yankees have spent almost a half a billion dollars on three ball players this past offseason, they are still mired in mediocrity and struggling with the implementation of cutting edge ideas regarding player development.”

    I don’t know. The clip starts and ends well, but that analysis right there is pretty baseless and mirrors the approach taken by ESPN and the MSM to focus on the negative while the team is down. It’s the same old tired line we’ve heard a million times. Write that down in September when the Yankees are on their way to clinching another division title (which I think they will do) and then we’ll talk.

    • deadrody

      I was just going to quote the exact same thing. Sounds smart, but I am about 99% sure it is based purely on speculative opinion. What are these “cutting edge ideas” for player development ? Moneyball ? Spending a lot and fielding players that fit the Moneyball profile are not mutually exclusive. And generally the idea with free agents like Mark Teixeira is that you get those kind of players with minimal risk. You can draft all the Moneyball profile players you want, but there is no guarantee that any organization is going to convert those prospects into ML players. Even the best organization misses on a very high percentage of prospects.

      • Stryker

        i’m not sure they mean moneyball type players when he speaks of player development. i believe it’s more along the lines of international baseball academies and using the newest and best technology to scout, sign, train, and condition players.

        the red sox are a fine example of this. as much as i hate to say it – theo epstein and company have been taking a sabermetric approach to running the organization; there are countless articles on this. by running the numbers they decide whether a player fits their model before they even think to start being involved. they also use some of the best training/conditioning equipment and technology out there.

        this is what i would like to see the yankees do. yes, money is no object for the team but why not spend it on creating a better business model AND set up the organization for success in other avenues rather than throw unnecessary money and long term contracts at aging players?

        there are a lot of smart business and baseball people out there. i just hope the yankees are smart enough to find them.

        • Scooter

          Isn’t this exactly what HAS been happening since 2005? As far as I know, the Yankees have pumped a lot of cash into the academy in the DR, and have been aggressively chasing international free agents.

          They also spent a lot in the college draft – focusing on players like Betances – first-round talents who drop b/c of college commitments and/or the Boras factor.

          They could follow the Moneyball model by looking at players that are undervalued by other teams, and looking at factors that correlate with major-league sucess.

          I think we’re 2 or 3 years away from judging what Cashman’s done with position player development. There’s two parts to a great farm system – high-end guys (like AJax, Montero and Romine), and a consistent pool of modest talent that can fill your roster out, be solid replacement player if there’s injury OR provide value in trade (think guys like Ramiro Pena and Cervelli). Then free agency is a way to focus on players in their prime who fill voids that the farm can’t fill.

          • Stryker

            free agency is a way to focus on players in their prime who fill voids that the farm can’t fill

            but nowadays teams are buying up free agency years for their players.

            player development is a way to avoid dishing out the big bucks for a guy who’s hitting free agency at an older age looking for an overpriced contract with more than 3 years to it (looking at you damon..)

  • deadrody

    Well it looks like we are all on the same page.

    Chalk it up to lazy journalism, something that is becoming more and more prevalent these days.

  • http://eastrutherfordrant.com donttradecano

    “Even though the Yankees have spent almost a half a billion dollars on three ball players this past offseason, they are still mired in mediocrity and struggling with the implementation of cutting edge ideas regarding player development.”

    Huh? Cutting edge ideas regarding player development? So the Yankees should invent pitches? There are only so many ideas you can come up with regarding player development.

    Some cutting edge ideas:

    1) Finish last for 18 years and get all #1 picks
    2) Compete for a pennant, draft well and cross your fingers guys pan out.

    #2 is the only option for the Yanks. They dont get the top picks every year to develop the Uptons, Crawfords and Prices of the world.

  • steve (different one)

    Season ticket holders are now starting to feel the pinch of the prices at the new ball park and they are expeditiously liquidating their ticket inventories at discounts.

    or maybe…just maybe…these were never “season ticket” holders at all.

    maybe, these tickets were bought up by ticket brokers who underestimated the effect of the economy and are now left holding the bag?

    or…maybe they were people who wanted to go to a fraction of 81 games, but thought they could buy half/full season plans, sell the rest at a profit, and subsidize the games they did want to go to??

    and maybe, since they got burned, there will be a fraction of the people who bought full season plans in 2009 lining up to do the same in 2010, leaving thousands of more affordable seats for the rest of us??

    and maybe, with slackened demand, the yankees will lower some of their prices?

    you can ALREADY see massive improvements just in the last week.

    • http://eastrutherfordrant.com donttradecano

      Agreed. All those tickets on Ticketgator and all those other sites are mostly ticket brokers selling their ticekts. I think a season ticket holder who paid $300 for a ticket would rather go to the game than sell it for $100 and lose $200.

  • HorseRun

    PRICES ! PRICES ! PRICES ! (and i dont want to here the RECESSION argument ever again, these prices were an outrage even for Warren Buffet)

    nothing else needs to be said….why they thought they could get away with this price structure and not have it smack them in their fat faces, is beyond me and has ruined the opening of the 1st season at Yankee Stadium and they can NEVER get that back

    • steve (different one)

      right, b/c if they win the WS this year, like anyone is going to care…

    • http://eastrutherfordrant.com donttradecano

      “and i dont want to here the RECESSION argument ever again, these prices were an outrage even for Warren Buffet”

      Not totally true. If it wasnt for the recession and a ton of big corporations going under I bet you alot of those first row seats behind the plate and down the lines would have been scooped up by corporations. Thats how it always was, and if the economy was still doing well, than companies would have bought them up. However no company wants to be the one to spend hundreds of thousands on tickets when their firing employees and the economy is in the tank.

  • HorseRun

    perhaps every corporation would have been fighting over those seats, however, that doesnt MAKE IT RIGHT…the point is THOSE SEATS WOULD STILL BE EMPTY FOR MOST OF THE GAME AS THEY WOULD BE STUFFING THEIR FACES WHILE THE GAME WAS BEING PLAYED !

    the whole CLASS PRICE model is disgusting (and yes i have money and can afford the Legend seats)…
    you are at a BASEBALL GAME !! why do you need to eat lobster and filet INSIDE a special club area, when there is a MAJOR LEAGUE game going on OUTSIDE and 9 rows of the best seats are sitting empty and on TV the stadium looks like a game in Tampa in May (and most importantly, the way team has been playing at home proves it even more)

  • Januz

    People in the media love to bash the Yankees every opportunity that they get. Hence the nickname “The Evil Empire”. Obviously this is related to “Star Wars”, and the heroic rebel Red Sox vs Darth Vader Yankees. The Red Sox almost NEVER get that kind of negative publicity. Look at the statement by Lou Meloni “”It was like teaching your teenage daughter about sex education,” Merloni said. “The organization acknowledged that there were likely players using steroids and basically, ‘If you’re gonna use them this is how you use them so you don’t abuse them. That is far more damming of an organization than even Roger Clemens or Barry Bonds. It will never be discussed to the nth degree like Alex Rodriguez’s conduct is.
    The New York Yankees are not at a crossroads: They have a plan (Which is stockpiling young pitching in the farm system (Brackman, McAllister, and Marshall come to mind), and bringing in character people like Teixeira and Sabathia to lead as well as fill holes. Finally, they try and do everything possible that will lead to Championships (And have since Babe Ruth first appeared in Pinstripes). Does it mean it always works out? Of course not. But setting up facilities in Brazil does not mean Championships either (Does anyone actually think Ruth or Jeter, or even Pujois will replace Pele in popularity in Brazil?)
    I frankly am sick of the Sox loving media, who sees every wart of the Yankees, but sees the Sox as perfect.

    • http://www.riveraveblues.com Benjamin Kabak

      I’d love — LOVE — to see you point to one shred of evidence that this Biz of Baseball article has anything to do with the Red Sox. Otherwise, this is just another rant. You like to put on Yankee blinders, but it’s pretty evident that this is a franchise undergoing some change. You know what? That’s not a criticism. It’s simply an observation. How the team emerges after this change will go a long way toward determining its future successes.

  • Sad Yankee Fan

    I’ll say it over and over that one person or a group of people in upper Yankee Management agreed that it was OK to sell a single baseball ticket for $2600. Also, $1000, $750, $500, $375!!!. We loved our plan that was $65 and was about 80 feet from home plate. We’re now 420 feet away in the 2nd deck in fair territory. The take it or leave it approach by Randy,Lon, has backfired. I’ll spend more time at Citi Field. If the Yankees don’t make the playoffs I’ll be really HAPPY!

    • V

      What a wonderful fan YOU are. Enjoy the Mets. We won’t miss you.

      I went without season tickets, and am enjoying going to the games on the cheap by buying on StubHub.

  • Sad Yankee Fan

    To V

    I’ve been a Yankee fan longer than you can imagine. Yes, you will miss fans like me and my friends and the rest of the many true fans that have been displaced by this contrived replica of Yankee Stadium.
    You will miss how we chanted “Let’s Go Yankees” like maybe 150,000 times in the last many years.

    Enjoy StubHub. Where are your seats located? Maybe if you didn’t do that the Yankees would be forced to get rid of all of these ticket plans and we could all sit in the the different locations in the stadium at a regular price. Lon & Randy must love fans like you.

    • William

      I am with V…if your loyalty is so “deep” that you’re willing to pick up and root for the Mets, don’t let the turnstile hit you on the way out. I am sure you’ll fit in just fine over at Flushing.

  • MoveBack

    One thing under-reported is the fact the Yankees really did no research on these ticket prices.

    It’s not just that corporations can’t afford seats, its that, under many corporate governance models, a gift of over $250 is usually not allowed to clients negotiating deals/contracts. Two $500 yankees tickets given to someone negotiating a contract is not considered proper ethics.

    The other thing that is stunning to me is the volume of tickets on the resale market. As someone said above, I think brokers made up a much larger percentage of ticket accounts then anyone ever realized. Corportaions have no mechanism to resell seats, it would be an accounting nightmare. They donate them and write them off if they are not used. Stubhub has had the reverse effect everyone once thought, it drove the market down. No longer do I see the sclapers with fistfuls of tickets gameday, they are all on the web, since I doubt anyone shows up to the stadium ticketless anymore since Stubhub. And the way it i ssetup, we can bid dgainst the scalpers, instead of reading phony stories in the Post about how brokers were getting “$1000 and up for tickets” then thinking $300 a seat was a bargain.

    For once , the average fan has won a ticket battle.