Mar
21

Forbes: Yanks worth $1.85 billion

By

With Opening Day just a few weeks away, Forbes released its annual MLB valuations today, and once again, the Yankees are the game’s top dogs. According to the business mag, the Yanks are worth a cool $1.85 billion, up nine percent over 2011. Interestingly enough, Forbes guesses that the club itself turns a profit of only around $10 million a year with the money generated through live TV programming. In other words, the dollars are in the TV rights.

“The Rolls-Royce of the RSN model is the New York Yankees, who own 34% of the YES Network,” Mike Ozanian wrote. “The Bronx Bombers are the most valuable team in baseball, worth $1.85 billion, tying them with the National Football League’s Dallas Cowboys for the top spot among American sports teams and placing them second in the world to Manchester United, the English soccer team worth $1.9 billion. YES generated a staggering $224 million in operating income and paid the Yankees a $90 million rights fee in 2011.”

For what it’s worth, only two teams — the Mets and Rays — saw their values decline from 2011 as legal woes for the former and attendance woes for the latter were the main drivers there. Meanwhile, it’s somewhat incongruous to hear how the Yanks are eying “austerity” budgets of only $189 million for 2014 and 2015, but that’s how baseball economics work these days. The Dodgers, currently undergoing a sale and with their TV rights up for renewal, will set the market, but if the Steinbrenner family ever wanted to sell, they could command a pretty penny for the crown jewel of Major League Baseball.

Categories : Asides, News
  • Paul VuvuZuvella

    If that’s true, that they only turn a profit of $10 million anually, it certainly explains all the focus on the incremental salary on the margin. Also makes it clear why the 2014 $189 million payroll target is a reality.

    • Ed

      I can believe it that the Yankees turn a $10m profit. However, the parent company, Yankee Global Enterprises, turns a much larger profit.

      Keep in mind that all the revenue sharing calculations are based on the team’s finances, not the parent company’s. They tend to have debt owned by the team with large portions of the profit shifted to other companies owned by YGE to minimize revenue sharing payments. I would expect that to continue even if they hit the $189m goal.

      • Plank

        Exactly. If they succeed in their goal and slash payroll by 30 MM, the team profits aren’t going to go up by 30MM, the money will be diverted to another of their entities, like YES.

        • Needed Pitching

          not true. To do that, they would have to shift revenues currently reported to MLB as Yankee revenues to another entity. MLB wouldn’t allow them to randomly assign revenues to another entity.

          • Plank

            I think there is enough wiggle room to shift enough money around to make it work.

            • Needed Pitching

              really about the only thing left to do in that regard is with the radio rights, but even if they started their own radio station, MLB would require the station pay the Yankees market rights fees(there is some wiggle room there, but likely the rights fees would have to be at least what they were receiving previously). Bottom line, all stadium revenue, and broadcast rights fees would have to be reported as Yankee revenue for revenue sharing purposes.

              What is reported as team profits doesn’t really matter though, except for PR purposes, and I’m sure Yankee fans will realize slashing payroll and avoiding luxury tax will result in Yankees keeping more money, regardless of what is reported.

              • Ed

                I’m sure there’s plenty of room for Hollywood accounting style tricks still to be done.

                The short version – Yankee Global Enterprises creates companies to outsource things from the Yankees. The new companies bill the Yankees an inflated rate. The net result is that profits are shifted from the Yankees to the new companies, but at the end of the day, the money stays in Yankee Global Enterprises.

                As an example of them doing this was the creation of Legends Hospitality Management to handle the food at the stadium.

                • Needed Pitching

                  true, I just don’t see much left for manipulation, outside of possibly the radio deal – concessions and tv are already being exploited. What else is left? I’m sure there is some room for manipulation, but I doubt 30M+ worth, or they would already be doing it.

                • Plank

                  A MLB team would never be up to such shenanigans.

                  Oh, wait…

                  http://itsabout.server304.com/...../chart.jpg

                  • Plank
                    • Gonzo

                      That’s why MLB got involved. That’s against the rules.

                    • Plank

                      MLB got involved because McCourt couldn’t pay his bills and he wanted to use team money from a future TV rights deal to pay off his wife in the divorce. That type of corporate ownership is the norm and isn’t against the rules.

                    • Gonzo

                      But what was their excuse. They said he broke 10 MLB rules.

                      I didn’t see Bud falling over backward trying to make the Wilpons sell.

                    • Gonzo

                      MLB ownership isn’t a normal business. In the interest of the game was never used in someone’s mom and pop widget company.

                    • Plank

                      Gonzo: Huh?

                    • Gonzo

                      Bah, going to bed. In short, yes McCourt’s handling of his business affairs was against MLB rules.

                      However, so is the level of debt held by certain clubs. It just matters on the seriousness of the matter if Bud’s getting involved.

                    • Plank

                      Good night. Thanks for the chat.

                    • Gonzo

                      Thank you for the chat.

                • Needed Pitching

                  that’s actually kind of backwards anyways … the idea is to divert revenue from the Yankees, not raise expenses for the Yankees. Yankees are trying to limit how much they pay into revenue sharing, paying bills at an inflated rate wouldn’t help with that.

                  • Ed

                    Sorry – that came out wrong trying to keep things simple. I think you knew what I meant though.

  • RetroRob

    Is it incongruous to hear about austerity budgets when the team only turns a profit of $10 million? I haven’t checked this year’s numbers yet, but based on what Forbes reported in 2011, the Pirates make more of a profit than do the Yankees.

    Second, once the Dodgers sell for between $1.5-$2 billion, expect the Yankees (and all teams’) value to skyrocket. The Yankees will be worth no less than $2.5 billion a year from now, probably more.

    • Paul VuvuZuvella

      I do not believe that it is. The Steinbrenners should be looking at this as 2 separate businesses and one should not be subsidizing the other. They could always Sell the Yankees, but keep the YES network.

      • Gonzo

        Absolutely. Isn’t that what Frank McCourt is trying to do with the Dodgers. I heard he is trying to retain ownership of the parking lots. I think that was how he made his money in the first place, IIRC.

      • RetroRob

        They could do that, but if the team and the network are so linked, as they are, it’s difficult to sell one without the other.

        The new owners of the Yankees can then turn around and start yet another network, or shop the cable rights to the Yankees to the highest bidder, basically destroying the value of the YES Network.

      • Plank

        The YES Network is as profitable as it is because they signed a way below TV contract with the Yankees which they own. It doesn’t make sense to look at one without the other. If the Steinbrenners sold the Yankees but kept the YES network, they would either have to give fair market value to the Yankees in the next contract thus reducing their profits and increasing the Yankees profits or they would lose the Yankees and they would be left with nothing.

        Looking at them separately in terms of how much the team brings in makes no sense. If they didn’t have the same owner, the Yankees profit would be far, far higher than 10 MM.

        • Gonzo

          You can’t really say they signed a below market deal. The Yankees got more money from YES than MSG. YES may make more money from the deal than MSG but that’s because MSG’s deal didn’t include a new channel with “new” cable revenue.

          You have to look at it when their next contract is up. Even then, YES would still probably bid higher than any RSN/Cable channel because its cable revenue is basically supported by one product. Other RSN’s cannot say that and has to other products to buy/pay.

          • Plank

            It is absolutely a below market deal.

            The Yankees didn’t get more money from YES than from MSG, YGE got more money in total from YES than from MSG, but the Yankees made out much worse thus their revenue is artificially low on paper because of their relationship with YES.

            The Yankees don’t negotiate with other networks. YGE (the Steinbrenners) look at the projections, tax tables, and revenue sharing rules and determine what TV deal will maximize their profits.

            • Gonzo

              The Yankees didn’t get more money from YES than from MSG…

              I’d like to see your proof for that. I’ll gladly say I’m wrong.

              • Gonzo

                Forgot to close the bold!

              • Plank

                I meant currently the Yankees make less in their TV deal than they would have on the open market (MSG being the probable main competitor) and have for years. If that was true in year one, I don’t know, but I’m certain it’s true now and has been for a number of years. They don’t negotiate at all. They sign whatever deal is most advantageous to their common owner.

                If YES were owned by a third party, they would pay much, much more.

                • Gonzo

                  My point is that YES paid more than MSG at the time the deal was struck.

                  If they would have never done YES and signed with MSG, you could still say they signed a below market deal because these deals are never year to year. Because of the growth in TV rights cost over the past couple of years, any deal signed pre-2008 would look below market.

                  This has nothing to do with YES deliberately paying the Yankees less and more with market forces.

                  • Plank

                    So you think the Yankees having a far below market TV rights deal is just a coincidence (unfortunate timing) instead of the mutual owner realizing it is advantageous for themselves to structure the deal as they did?

                    I disagree.

                    • Gonzo

                      You are being a hammer and seeing everything as a nail at this point.

                      Was the deal below market at the time of the deal? That’s the only thing we should question. Do you think MSG offered more money? That’s all it comes down to right now. You said they did. Show me the proof.

                      If you can show me that, I will reconsider. Until then, yes, the Yankees signed a long-term contract with YES, and it turned out many years afterward to be a bargain. You make it sound like it was a bargain the moment the deal was struck with no basis for that assumption.

                    • Gonzo

                      It’s like saying 8 years from now that FOX’s deal with the Dodgers is way under market, therefore, there must have been something underhanded involved. Hindsight is 20/20.

                    • Plank

                      MSG wasn’t a bidder for the Yankees contract. Only YES was. The Yankees contract wasn’t up for bid. It went to the YES network owner for the amount that is most beneficial to the Steinbrenners.

                    • Gonzo

                      As far as I know, MSG had rights, under their expiring contract to match or exceed any deal on the table. They sent over a contract to MSG , and instead of talking shop, they sued the Yankees.

                      Went to court and everything. Am I missing something?

                    • Plank

                      They went to court over whether they would be forced to carry the new channel on the regular cable tier. They wanted to put YES on a premium tier where subscribers would have to pay extra each month to get the channel. It was the reason there were no Yankees games in New York for a while after the new channel started.

                      I don’t recall that aspect of the lawsuit and I can’t find anything on the internet that shows that.

                    • Needed Pitching

                      http://www.nytimes.com/2000/08.....038;src=pm

                      this has some details of the Yankees/MSG pre-YES dispute

                    • Gonzo

                      I read that they shopped a deal with Cablevision and allowed MSG to match a deal. I don’t read anything that YES screwed the Yankees over by taking a lesser deal.

                    • Needed Pitching

                      looks like technically they weren’t being offered a chance to bid on broadcast rights, they were being offered a chance to be the Yankees partner in a new network (which would compete against MSG, so not really in their best interests)

                    • Gonzo

                      In the end, it doesn’t look like a sham contract. I think if you compare this contract with other MLB tv contracts around the same time, you’ll see it wasn’t a sham.

            • Needed Pitching

              I believe they’ve only signed one contract with YES, the original contract is still in force (that’s why the Yankees don’t negotiate with other networks, they can’t yet, though it’s obviously in their interests for YES to have the contract)

              • Gonzo

                Exactly. All that matters is that YES had the better offer than MSG at the time the deal was struck. TV deals at this level and size are rarely year to year. Just ask the Angels, Dodgers, and Rangers.

                • Plank

                  MSG didn’t have an offer. The TV rights weren’t up for bid.

                  • Gonzo

                    The Yankees shopped a deal with Cablevision and allowed MSG to match a deal. MSG sued the Yankees.

    • RetroRob

      …oh, and I should add, I don’t believe any of these numbers.: -)

      The expenses sit on the Yankees baseball team side of the ledger, the majority of the profits sit in the other entities, specifically YES Network. By controlling their own network, even while it’s shared by Goldman, the Yankees have the ability to shift profits. These are not public companies. They can do what they please.

      I believe YES Enterprises, which includes the Yankees and several other businesses, was valued at over $5 billion last year, and no doubt higher this year.

      • Gonzo

        With Goldman Sachs as a business partner, I am almost certain there is no shenanigans of shifting money (through pricing etc…) from one entity to another.

        I think I read somewhere that Yankees Global only owns 34% of Yes Network (correct me if I’m wrong). After the $90mm payment to the Yankees, and spreading the profits, how much cheddar is left at the end of the day.

        • Needed Pitching

          the article says 224M in operating income for YES – 34% of that is about 75M (though I’ve read most of YES profits go towards debt repayment)

          • Gonzo

            I forgot about the debt repayment. I heard that too.

          • Plank

            That is still real money and real profits. The Steinbrenners are choosing to aggressively pay down debt instead improving the team or the network with the money.

            Paying down the debt ultimately means the money provided by fans (and non-fans because of forced cable packages) is going to the Steinbrenners instead of improving the fan experience.

            • Gonzo

              Paying down YES debt is the smart thing to do in case of an ownership change of the Yankees.

              Jus sayin.

              • Plank

                I would probably do the same thing if I were the owner of the Yankees.

                As a fan, I’m not okay with taking all the profits and pocketing it (circuitously in this case), telling people that the team needs to slash payroll, and (probably) damaging the performance of the team as a result of a desire by ownership to have higher profits.

                So yes, it is smart for the Steinbrenners, but it is bad for the Yankees. I care about the Yankees a lot more than the Steinbrenners.

                For a long time the interests of the Steinbrenners and the Yankees were one and the same. That’s not true anymore.

            • Needed Pitching

              the debt was accrued improving the team and the network
              Also, the Yankees are minority owners in YES, Goldman Sachs has a bigger share and has more control over how money is spent. Goldman Sachs really has no reason to allow the Yankees to take money out of YES to pay for payroll. They know its in the Yankees interest to spend their own money to finance a high revenue team, leaving the Yankees partners in YES to rake in profits

              • Plank

                The way I understand it, the Steinbrenners are taking their share of the profits and paying down their share of the debt. The other owners of the network have nothing to do with it.

                • Gonzo

                  Ask Oprah how expensive it is to start your OWN (pun intended) cable channel. It’s not cheap nor is it risk free.

                • Needed Pitching

                  YES is run as a separate entity. YES decides what to do with YES cash flow. I’m sure the Yankee group has some substantial say since they are a major partner and control YES’s biggest cash cow (the Yankees), but I don’t believe they have the freedom to do whatever they want with YES money, it would have to be a partnership decision (of which they are only a minority partner)

                  • Plank

                    I think you are underestimating the Steinbrenners’ influence in how YES is run. I don’t have any evidence of this and I doubt you do either. Let’s agree to disagree.

                    • Gonzo

                      Have you read Greg Smith’s account of how Goldman does business?

                    • Plank

                      No, what’s that?

                    • Gonzo

                      Oh man, it was a hilarious op-ed piece by an ex Goldman employee.

                      He said they bragged about how much $ they could screw out of clients. That they called clients muppets. That the basic culture has devolved into a competition of who could screw clients out of the most money.

        • Plank

          When the network started the Yankees, the owner of the Nets, and Goldman Sachs each owned 1/3. That was 10 years ago. The current ownership situation is unclear publicly.

          • Gonzo

            Goldman still owns, and the old Nets guys never gave up their control as far I’ve heard. Not just fakepedia, I’ve followed the ownership of YES for a while now.

            • Plank

              Me too. At one point there were articles about how Goldman Sachs was looking at selling its stake in the network. I don’t know if they ever did or not.

              • Gonzo

                Heard they still own begrudgingly.

              • Havok9120

                They never did. And its supposedly been 5 years.

        • RetroRob

          No shenanigans from the vampire squid? : -)

          I’m not implying anything illegal is going on. What I’m saying is that the Steinbrenner’s control something much larger than the Yankees baseball team known as Yankee Global Enterprises. That entity owns the Yankees ball club, as well as its share of the YES Network, as well as other businesses. Rumors have it that the reason the Yankees signed a one-year radio contract renewal with WCBS is because Yankee Global Enterprises (YGE) wants to purchase its own radio station so the Yankees will now control its own broadcast rights,and of course the revenue around it. Makes sense.

          Yet the link here is still the NY Yankees. Sure, the Steinbrenners could sell off the Yankees while maintaining all the other elements of YGE, but in the end, YGE is still driven by the NY Yankees. That’s why the baseball team can operate at a minimal profit, or even a loss from time to time. It’s the engine that will drive the real value of YGE. The Steinbrenners own a global and expanding brand that is much more valuable than just the Yankees baseball team, yet the two are interlocked.

          Forbes has no access to this information. They’re just guessing. They can do a reasonable job of guessing the value of the Yankees baseball team based on recent sale prices. They might even have some idea what the Yankees report to MLB as a profit, but by setting up YGE as a separate entity, MLB has no access to the financial records of YGE anymore than they would have access to CableVision’s financial records.

        • Rainbow Connection

          “With Goldman Sachs as a business partner, I am almost certain there is no shenanigans of shifting money (through pricing etc…) from one entity to another.”

          LOL

  • Gonzo

    I’m really interested in the exact amount the Dodgers sell for in the coming weeks.

    • Havok9120

      And then what they sell their rights for. And to who.

  • Joe

    Look at the Dodgers! McCourt might be crazy but he’s got some skills in boosting the value of his team

    • Gonzo

      And he still might walk away with ownership of the lots!

  • Rich in NJ

    Maybe if YES’ programming, apart from Yankee games, was decent they could generate even more money.

    • Plank

      There are some truly terrible shows on that network.

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

        Cost-benefit. The costs of producing “better” content is outweighed by the fact that the ratings and ad dollars won’t justify the investment. That’s why Francesa gets such a large time slot in the middle of the day and why non-game content is so sparse.

        • Havok9120

          This. Its about the margins, not sheer revenue.

          • Plank

            It’s like the austerity plan. I understand why they do it, but as a fan I don’t like it.

            • Havok9120

              Okay, but what would you want on there realistically?

              • Plank

                Minor league games and a Yankeeography of Alvaro Espinosa.

                • Havok9120

                  MiLB games might be….something. I’m not sure what. I hadn’t considered that, and I’d watch them on days when the Yanks didn’t play. Well, if I had access to the network, which I don’t. Are MiLB games played roughly on the same schedule as MLB games?

                  Hmmmm….

                  Not sure I want to make prospects figure out their talents under The Eagle Eye of Yankee Fandom though. We see that get to guys twice their age. How much of an impact televising the games would actually have though…

                  Hmmm…..

                  • Plank

                    The seasons are the same. A lot of minor league games are day games. I would definitely prefer that to Francesspool.

                • Plank

                  Ideally I would love an hour-long daily Sportcenter type show showing the highlights of each minor league game. I realize that will never happen. They weren’t even willing to pay some 5 figure amount (I forget how much) to get the SI Yanks games on the radio.

                  I’m still crossing my fingers for the Espinosa Yankeeography though. I’m considering starting a letter writing campaign.

                  • Plank

                    Oops, that was a reply to Havok.

    • KL

      Not really. The Yankees are the only reason cable and satellite companies carry the channel.

      The rest of the programming is just Yankee stuff and filler. They are not running YES because of Mike Francesa or whatever they have on. I turned on YES and there was an English soccer team on from feaking London. Seriously. I expect to see cricket next. Talk about putting anything on.

      • Havok9120

        Its Arsenal, I believe. That’s just finding other people to pay a chunk of operating costs.

  • Plank

    The thing that always gets ignored when looking at team finances is the change in team valuation. The Yankees made 10 MM in profits (sorta), but their team value increased by 150 MM. That’s not cash, but it’s money that’s added to the asset side of the ledger.

    • Needed Pitching

      there’s no doubt the Steinbrenners (and their partners) are getting very rich

  • Gonzo

    I love it, in 2002, the YES Network was an enterprise that helped the Yankees immediately spend tons of money on players. In 2012, the YES network is a boondoggle that is a way of screwing over fans everywhere.

    • Plank

      I don’t think anyone is saying that. I think it’s just a different ownership philosophy that is changing the way the Yankees are being run.

      • Gonzo

        YES was formed by George. I think the soft cap is the main culprit of shifting philosophy. Where was talk of an austerity plan before the CBA?

        We always need a villain. The CBA and Bud aren’t as good of a target at ownership.

        • Plank

          The Yankees haven’t raised payroll since Steinbrenner’s brains turned to spaghetti. The austerity plan is a more extreme example, but the Yankees payroll plateaued long ago.

          • Gonzo

            Again, could that have anything to do with the luxury tax/soft cap that was in place in the 2000’s?

            With a 15 year TV deal, you can’t expect to renegotiate in year 6/8/10. That revenue is more or less fixed for a while. Should it surprise anyone that if that revenue is fixed, wouldn’t payroll “settle” into a comfort zone.

            • Plank

              MLB revenue shot up in the 2000s. The Yankees didn’t increase their payroll. They also opened a new stadium. Again with no corresponding increase in revenue.

              • Gonzo

                Again, this has nothing to do with the soft cap?

                • Gonzo

                  Or results for that matter. George went bonkers in the early 2000’s with no WS hardware to show for it either.

                • Plank

                  You could be right that the soft cap is the main reason the Yankees haven’t increased payroll in 8 years, but I doubt it. Their revenue still increased over that time. Every team’s did.

                  • Needed Pitching

                    ??
                    Wouldn’t that be evidence that the soft cap is artificially holding down payroll growth?

                    • Plank

                      Or that the new owners want to make more money than the old owners.

                    • Needed Pitching

                      right. but the soft cap would play into that. having to pay luxury tax means they can afford less payroll for the level of profit they desire.

                    • Plank

                      True, but I’m saying the new owners have a higher level of profit they desire, to use your wording. I’m sure the soft cap has an effect, but to attribute all of it to that doesn’t make sense to me.

                      According to the numbers here in the thread, the Steinbrenners made 10MM from the team, 75MM from the channel, and 150MM in increased valuation. The channel certainly got more valuable and there are other revenue streams not counted (legends hospitality, etc) but just those things is 235MM.

                      That is what they made after payroll and everything else. Now they want to slash payroll. I don’t like it.

                    • Havok9120

                      Be fair and take out that “increased valuation” nonsense. That’s important for scorekeeping and if you’re selling the team (or reporting to the MLB/IRS), but it hardly counts as “money in their pockets.”

                    • Plank

                      How is that nonsense? It’s real money.

                      If George Steinbrenner kept the team revenue neutral every year he owned the team he would have made no money according to you. In reality he would have made over a billion dollars.

                      They could turn it into money in their pockets in a heartbeat if they wanted to.

                    • Needed Pitching

                      Plank –
                      fair enough. I won’t have a problem with it unless it starts clearly hurting the team’s results. The Yankee payroll elevated drastically in the years after 2000 and resulted in no championships. The payroll lowered from 2008 to 2009 and they won a championship. I’m all for being smarter (and hence more efficient) with the payroll. I would prefer payroll decisions not be restricted by an arbitrary threshold though.
                      Not really worth worrying about until/when they start actually cutting payroll and having bad results because of it.

                    • Havok9120

                      …..if they sold the golden goose. I get what you’re saying, its basic asset management. It also doesn’t count as annual profit except in the abstract. You can’t spend an asset on a new player, a new stadium, a box of cereal, or a new platinum-plated toilet for the team offices.

                      If you aren’t willing to sell the item in question, it doesn’t matter what its value is. Most places don’t accept purely theoretical dollars that you don’t actually possess as a form of payment.

                    • Gonzo

                      I think his point is that valuation increase is not something you can pay yourself with until you sell. It’s a function of revenue in many of these cases, certainly in the case of YES. That means as revenue falls so can your valuation. It’s not static like revenue/profit for 2011/10/09/etc…, for example. Prior profit can be “taken to the bank” whereas valuation cannot. It can only be used as collateral where the bank will do a valuation base on, you guessed it, your revenue/profit.

                    • Plank

                      This is beside the point, but I think the Steinbrenners are setting themselves up to sell the team in the not too distant future.

                      The increase in team valuation being converted into actual dollars isn’t as ethereal as you guys are making it out to be. The Yankees are a stable company. They increase in value by about the same amount year after year. It’s real money.

                    • Gonzo

                      I actually agree that they are setting themselves up to sell the Yankees. I said that a little while back too.

                      The Yankees are a stable company, however, they are at the mercy of MLB/Bud Selig when it comes to certain things. The game has shown a trend of taking away the Yankees’ most powerful advantage, the willingness to spend money.

                      It’s possible that the valuation of the Yankees could take a serious hit if there is an even harder cap in the next CBA.

                      Also, YES would take a serious hit financially if viewership lowered because of a string of crappy teams.

                      There’s a lot of “ifs” in there, but as the Roman’s say, all glory is fleeting.

                    • Plank

                      The one thing Selig does is make rules to increase teams values. That is the end game for owners and he works for the owners. He’s not autonomous, he’s their mouthpiece. The Yankees aren’t going to drop in value.

                    • Gonzo

                      arete, ate, hubris, and nemesis

                      If Bud could possibly increase 26 owners’ value at the cost of possibly lowering the value of 2/3 owners, you don’t think he’d do it? You don’t think Attanasio and a bunch of other owners wouldn’t jump on that boat in a heartbeat?

                    • Plank

                      Selig doesn’t really do moves unless there is unanimous support for it, so no, I don’t think that would happen.

                      He’s all about building a consensus.

                    • Gonzo

                      Was the last luxury tax universally applauded?

                    • Plank

                      The last CBA was approved 30-0.

                    • Gonzo

                      The one before that. Didn’t George object to the CBA?

                      Also, if this CBA was agreed to 30-0, would it be far off to imagine a harder cap being approved 30-0 next?

                    • Plank

                      Also, if this CBA was agreed to 30-0, would it be far off to imagine a harder cap being approved 30-0 next?

                      I could see that happening. I couldn’t see any CBA being approved that would make even a single team’s value crumble.

                    • Needed Pitching

                      I’m sure the owners would probably be for a harder cap. Its the players union that would object. I really wouldn’t anything more than incremental changes in the luxury tax – maybe slightly higher top rate, or no increase in the threshold

                    • Gonzo

                      I never said crumble. Could a harder cap make it tougher for the Yankees to have a great playoff run since ’95? I think yes. Could a stretch of sub-par seasons (Yankee seasons) have an impact on their revenue? I think yes. Could that in turn have an impact on their valuation? I think yes.

                      I never said crumble. Also, one could make the argument that this CBA will possibly lower come valuations of some teams. At least relative to other teams.

                    • Plank

                      I didn’t mean to put words in your mouth. You did say however

                      It’s possible that the valuation of the Yankees could take a serious hit if there is an even harder cap in the next CBA.

                      ‘Crumble’ and ‘serious hit’ isn’t that big of a difference to me. Sorry if I misunderstood.

                    • Gonzo

                      I never said “serious hit” in reference to the Yankees. I said it in reference to YES.

                      That could be said about any channel where viewership takes a hit at an inopportune time.

              • Havok9120

                Eh? They opened a new stadium at the cost of 1.5 billion dollars. Think some of that increased revenue might have gone there?

                It isn’t a conspiracy man. Slow your roll. Payroll plateaued because it got out of control, and then a new stadium had to be built ON TOP OF THAT. They didn’t cut payroll to build it, as would make sense. They sunk their increased revenue into it and the financing of the necessary debt.

                • Havok9120

                  Not to mention that all that spending through the soft cap got us was….well, nothing we didn’t already have. While there were years where sheer ludicrous spending is probably all that got us into the playoffs, there weren’t a ton of them.

                • Plank

                  The Yankees didn’t pay 1.5 billion for the stadium.

                  I’m not saying it’s a conspiracy. I’m saying it’s a business and Hal Steinbrenner is doing what a businessman does. That’s his right, but I would rather they pump the money they make into making the Yankees better. They aren’t. It’s my right as a fan to not be okay with what they are doing.

                  • Havok9120

                    No, they didn’t pay 1.5 billion. They paid 800 million. Still 10x the annual profit they’re seeing from YES and the team. And the only reason the city could justify picking up the balance is the hundred different kinds of tax money the Yankees bring into the city.

                    And yeah, you kind of are. So far in this thread, you have them magically shifting revenue streams to hide/disguise profits and offering themselves below-market contracts. All of this despite the fact that the central link in the chain, YES, isn’t even owned by them and thus they only receive 1 out of every three dollars which they launder through it.

                    • Plank

                      The central link in the chain is the Steinbrenners. They own (or partially own) all the companies being talked about.

                      You are trying to make me sound absurd.

                      If the contract signed between the Yankees and YES was one page, the things you are saying are true. I’m sure there are hundreds of loopholes and ways to benefit the Steinbrenners and divert money from the team to themselves via YES, Legends, the stadium, etc. Sorry if you think I’m being a conspiracy theorist. I just think they are doing what they can to make money.

                      The Steinbrenners negotiated both sides of the contract. They certainly designed it to be beneficial to themselves above all else. Again, sorry if you disagree.

                    • Gonzo

                      I really like Plank and what he brings to the threads. He has made me enjoy the Ted Nelson threads again rather than avoid them altogether.

                      However, I said it above. He’s a hammer and everything is a nail to him on this subject.

                    • Plank

                      Gonzo: I don’t think I’m acting that way. I’m disagreeing with people saying YES and the Yankees are autonomous but I don’t think I’m being heavy handed about it.

                      I feel like I’m listening to everyone’s viewpoint, I guess I just have a different take on it than others. Sorry if it sounds like I’m being combative, that truly isn’t my intention.

                    • Gonzo

                      No, I didn’t mean to use the hammer analogy to mean you are being combative. Not at all. I didn’t mean it that way at all!

                    • Havok9120

                      No, you really aren’t being combative. I don’t think anyone’s saying that. And I’m sorry if I gave off that vibe, that isn’t really my intention. I’m not invested enough in this debate to do that (especially not to you).

                      Heck, I agreed with most everything that you are saying until I did some trips through the wayback machine, dug through business news sites, and looked at some random pictures of my dog (it was key to my investigation!), at which point I was forced to change pretty much everything I thought about the situation. That process is why I didn’t come into this until the end.

                    • Plank

                      I, too, find your dog inspirational.

  • Needed Pitching

    Does anyone know when the Yankees original contract with YES expires??

    I remember reading it before, but now I can’t find it anywhere.

    • Gonzo

      I think 2017. I think it was a 15 year deal in 2002. Could have been a year later or earlier though. I haven’t heard they re-upped, but they may have.

      • Needed Pitching

        that sounds right, I though it was either 10 years or 15 years, but haven’t been able to find the info anywhere

        • Gonzo

          I think initially it was supposed to be a 10 year deal but they increased the $ and years. IIRC.

  • Bavarian Yankee

    lol, ManU #1 in the world? No freaking way they’re more valuable than Real Madrid and they got a ton of debts.

    • Leg-End

      As a business model United are the most profitable football club in the world and thats without the advantage of Spanish teams having the right to negotiate their own TV Deals.

      And United’s debt is manageable and coming down every year.

      • Bavarian Yankee

        regardless of TV deals I have no doubt that Bayern München has the most profitable club in the world. Have you ever checked what TV deals they get? Teams in the other big leagues laugh about that. If they had only half of the TV money that ManU gets, oh boy, they would rock europe every year.

        btw: last time I checked ManU had debts of around 1 billion €. Is that really manageable? Or are they doing it like in Spain or Italy where debts disappear overnight?

  • LeftyLarry

    VALUATIONS GO UP AND VALUATIONS GO DOWN.

    You can’t spend valuations, only returns, profits not reinvested.

    No, the Steinbrenners are NOT making money when the clubs supposed value is going up.

    What if there is a change of tax laws or MLB someday changes the rules (or the Government changes the rules) and votes to add another team in NJ or Conn and the Yankees lose value.Not saying that’s happening, just saying valuations are not realized profits.

    Any asset is only as good as the return on investment.

    If your asset is worth $1,000,000, it better be throwing off 5-8% in this about to be inflationary environment with little risk.

    If interest rates go up as expected and so do returns, the Yankees value will go down dramatically.

    If something is worth almost two billion dollars, the reality is the Yankees are making very little for the investors on a percentage basis.

    Yes, George stole the team for almost nothing and that’s ancient history but today if it’s worth as much as Forbes say’s, they need to increase return or the value will go down.

    • Ted Nelson

      Return on investment includes the resale value if and when you decide to sell the asset…

  • leftylarry

    Yea, we all understand IRR’S, Internal rates of return but the Steinbrenner family isn’t a seller, so it’s academic until they die and lose the team because the Estate taxes next time will probably be a Billion Dollars.
    Any asset needs ot throw off a decent return.