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.