Rosenthal: Payroll reduction benefits might be less than anticipated

A way, way too early look at possible trade deadline targets
Jennings: Yankees have no interest in George Kottaras

I had a feeling a report like this would surface eventually, but I thought it would take until next offseason. Ken Rosenthal says the Yankees’ plan to get under the $189M luxury tax threshold might not be as lucrative as the team originally anticipated due to various goings-on around the league. I’ll let him explain…

Under the labor agreement, the 15 clubs in the largest markets will forfeit an increasing percentage of their revenue-sharing proceeds starting in 2013, and become ineligible for any such money by ’16.

The revenue-sharing funds that would have gone to those clubs then would be redistributed to payors such as the Yankees. The idea is to motivate certain big-market clubs — the Toronto Blue Jays, for example — to increase their revenues, knowing that they no longer would qualify for revenue-sharing money.

From that perspective, the plan appears to be working — the Blue Jays, Washington Nationals and Atlanta Braves are among the big-market clubs that anticipate higher revenues next season, according to major league sources.

Such developments would reduce the size of the market-disqualification pot — and in turn reduce the percentage of that pot the Yankees would receive.

In English, that means there were top 15 market size teams that were not among the top 15 revenue generators, like the Nationals and Blue Jays. Those teams received revenue sharing payments but are now disqualified under the new Collective Bargaining Agreement, and the money they would have been received goes back to the clubs that paid out. Since they’re generating more revenue though, they would have received a smaller piece of a revenue sharing pie and thus the Yankees won’t get back as much. Got it?

Rosenthal cites a Joel Sherman report I don’t remember seeing that says the Yankees anticipated $10M in revenue sharing savings by getting under the luxury tax threshold in 2014. That then jumps up to $40M (annually, I assume) if they continue to stay under in subsequent years, something Hal Steinbrenner has confirmed they will do. All of that is on top of the money saved by not paying the luxury tax, which is a decent chunk of change. Just based on the team’s revenue sharing number ($10M) plus the luxury tax (~$12M) plus the general payroll reduction (~$20M), the Yankees are looking at something like $42M in savings in 2014.

None of this is a guarantee, of course. If teams like the Blue Jays and Nationals don’t generate as much revenue as expected — or if (when, really) a revenue sharing payor like the Astros turns into a payee due to a revenue drop — the Yankees will get a larger rebate on their revenue sharing payment. We also have no idea how exactly they calculated their potential savings either, but I’m guessing the club evaluated several scenarios before deciding to scale back payroll. And yeah, I’m willing to bet at least one of those scenarios involves missing the postseason and losing out on millions in playoff revenue.

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A way, way too early look at possible trade deadline targets
Jennings: Yankees have no interest in George Kottaras
  • Nice Guy Eddie

    At this point in time, it’s been almost a 20 year run of dominating baseball. It could end up being pretty beneficial to scale back the next few years and really have some space and money to play with after all the TrueYankees are gone.

    • trr

      How would the fans react to a few years of sub .500 baseball, even if it is for the gretaer good?

      • Gonzo

        People might stop complaining about ticket prices.

        Ehh, on second thought, people will always complain about ticket prices no matter the price.

      • The Big City of Dreams

        The fan would freak out. The fan base had a problem with the 08 season and that was what 89 wins in third place.

        • Mister D

          Those were fans that don’t know how baseball and economics work. They were people who jumped on the bandwagon (or grew up during) the late 90s. I certainly don’t want to see the team lose (ie be below .500) for even one season, but the way the team has been constructed for the past decade has been untenable, even moreso under the new CBA. They could not continue as they had and remain viable. They need to regroup and restructure, especially with the burdensome trio of contracts that they have now. I do think that they will be able to put forth a competitive team, but they should no longer be a slam dunk for the post season.

      • RetroRob

        Less people will go to games.

        The Yankees clearly see what’s happening right now and I’m sure they’ve come to the conclusion they need to transition. So they’re trying to piece together the MLB roster until some of the younger players move up, while at the same time going under the luxury tax to reset the tax rate in anticipation of increasing spending again once they can blend in the younger players. In other words, they recognize they need to rebuild, but they’re hoping to remain competitive, but not elite, over the next few years. They’ll never say that, though.

        Can it be done? Beats me.

        • TomH

          So they’re trying to piece together the MLB roster until some of the younger players move up….

          I once read that in the Yankees’ system, in the 30s and 40s, their scouts had 3 categories in which to place prospects: (1) Minor leaguer, (2) Major Leaguer, (3) Yankee.

          Let’s hope that the players who survive the passage through the system and “move up” are in the old “Yankee” category.

          There’s a lot of pious talk (not in your comment!) about the importance of “being smart” these days and its superiority over the mere (un”smart”) spending of money. However, it’s not that clear that the Yankees’ system has been so “smart” in the past few years, in its assessment and development of talent (especially pitchers), that we can be confident it will be sufficiently “smart” during the coming Age of Austerity to be elite again. Unsmart decisions about the spending of money may correlate with unsmartness in other areas as well.

          • RetroRob

            Correct. The core driving the Yankees for a very, very long time was built on Jeter, Bernie, Pettitte, Jorge and Mo. That’s five players who range from two locks for the HOF, and three borderline guys. You just can’t plan for that. So even if the Yankees make a committment to blending in their young players, it is almost assured they won’t come up with a block of talented players who played for 15-20 years.

            Not sure they need that, though. They do need some cheap, quality to come through. A Williams and a Sanchez, or an Austin, etc., that they can then use to build around. Going that route is one thing. Actually pulling it off successfully is way harder, and I have to say, it hasn’t been a core strength of the Yankees in quite some time.

          • Andy Pettitte’s Fibula (formerly Manny’s BanWagon)

            Yeah, people throw out statements like “they can win at $189, they just have to be smarter”.

            Does anyone believe they haven’t been trying to make “smart” decisions all along and now that they have to operate under a much tighter budget, they can flip a switch and all of a sudden put an equally good product on the field that’s also cheaper and accomplish this with same people making the decisions?

    • Laz

      Why they need to work on the farm, instead of consistently trading away the talent. There is finally a budget, and free agent salaries are escalating. They need to develop some talent within.

      They also need to start extending players. Most teams are doing it, and it is really making the FA pool bad. Look at what price Longoria signed with the rays for.

      • viridiana

        Good points.

      • MannyGeee

        FWIW Longoria at that commitment may end up being a disaster considering he, at his PRIME, is having a hard time staying on the field…

        That being said, extending players should be considered. Just don’t expect it to not be a gamble. Either that or don’t expect it to come cheap.

      • Steve (different one)

        Right, but they are essentially doing that now by sitting on all their prospects, and all I hear is how they need to do something.

        Even a guy like Morse commanded a real prospect.

        It is very hard to thread this needle, and the Yankees are trying to do it, and still pissing off everyone in the process.

        I kindof agree that given the constraints, they need to keep their powder dry for now, but that also means no Upton, etc.

    • MediaSavvy

      Just so long as Yankees brass are not making the calculation that the organization will make more money fielding a mediocre team from now on, I’m fine with taking a short hiatus on championships to return to building the team from within, rather than relying so heavily on big name free agents. Meanwhile, I’ll be rooting for a Royals – Pirates world series.

  • theyankeewarrior

    Plus the fact that they’re cutting a ~$215M payroll to ~$185M. That’s $30M in savings per year right there.

    • blake

      in actual money the payroll probably needs to be closer 177 or so to get under the tax….because most estimates are that bonuses etc will be about 12 or 13 million and that counts too. This is of course unless Arod reaches his homer bonus in 2014 and thats another 6 million….so they may have to leave space for that as well…..

      • theyankeewarrior

        Right. So basically, they’re saving s shit ton of money (up to 40M a year) by cutting payroll. Ten they’re saving on luxury taxes and revenue sharing on top of that.

        Where is it going?

        • Andy Pettitte’s Fibula (formerly Manny’s BanWagon)

          Who cares if they save money unless the savings is going to be eventually re-invested in the team and I’ve seen no evidence that that’s their plan??

          In the short run, the product on the field is going to be worse than if they continued to operate at a $210-220 million payroll.

    • Cris Pengiucci

      They also save luxury tax payments they would have paid if the payroll were above the threashold, so the savings would be greater than the $30MM (or more) they’ll cut in direct salaries. This is pretty serios money, even for multi-millionares.

      • blake

        however….most of the savings will be just simply from cutting payroll that much….which they could have done any year

        • Cris Pengiucci

          With a 50% luxury tax, they’d save another $15MM on top of the $30MM. Nothing to sneeze at.

          • blake

            sure but as I said they cut have cut the 30 million whenever they wanted….the tax rates are marginal….meaning you are only taxed on the overage not on the entire payroll. So if the Yanks payroll was 200 million….they’d be taxed on 11 million….not 200

  • Frank

    The rules of the business are now designed to severely punish the Yankees for doing business as usual. They’ve pretty much got no choice but to hit the reset button here – taking a couple of steps back – and then moving forward again. It sucks, but here’s hoping that they pull out a championship between now and then. That’ll aggravate the other owners like nothing else.

    • Laz

      I think they will be able to still be a playoff team while rebuilding the farm. $189M payroll can still buy you a contender even if it means going to get older players.

    • MannyGeee

      10 of the last 11 World Series Champions have not had the highest payroll in the game. Relevant.

      • 42isNotMortal

        Any team only has a 3 and small change percent chance to win the WS in any given year, so 1 out of 11 years is almost 3x more efficient than the original odds in your SSS layout.

        • MannyGeee

          Carry the 5, multiply by 3.14… Quick track math says:

          Doesn’t matter once October comes. there is then a 1 in 8 chance in getting the ring, which is now you having as good of odds stumbling into the playoffs and going on a hot run than spending all teh moniez on every swingin dick FA and winning.

          My hypothesis will be tested in 2013 when Los Doyers get bumped in the ALDS.

      • Mister D

        Only 1 of 30 teams can have the highest payroll, and only 1 can win the world series. No one has ever claimed that the highest payroll guarantees a WS victory, so your claim is irrelevant.

        A more accurate reading would be to examine the correlation between payroll and playoff appearances. Here’s one article that does just that, and it finds the average playoff team has a payroll 21% higher than league average:

        http://www.85percentsports.com.....e-seasons/

        Of the teams that made the playoffs, the Yankees made it nearly twice as often as any other team (11 appearances vs 6 for Sox, Angels and Cards, but that is only since 2000 – we know the Yanks playoff run started 5 years earlier), and they are the only team with more than double the average salary on a consistent basis.

  • TheOneWhoKnocks

    Interesting point you bring up, that we don’t really like to consider as fans.
    The goal of any business is to make money first and foremost. Making the playoffs is considered great business because it means more $$$

    But what if an alternative scenario allows you to miss the playoffs and make more $$?
    The Marlins have certainly repeatedly gone down that road.
    Not that the Yankees front office deserves to be compared to the Marlins, but you just get a sense since 2009 that the Yankees have gone from win at any cost, to ok we have a budget and we’re going to stick to it, even if it means we aren’t fielding the best team we can.

    In 2009 and 2010 I went to over 50 yankee games. Since then? Under 20.
    I’m just one person, but I’ve been pretty discouraged with the organizations new approach.

    • mitch

      I’ve wondered all along why they decided to get to 189 so quickly. At 50%, the luxury tax on a $220 mil payroll is around $15mil. Obviously that’s a lot of money, but it’s a drop in the bucket compared to what they bring in. That seems like a pretty small price to pay to remain a WS contender.

      Why couldn’t they have worked their way down to 189 over the course of a few seasons by spending smarter? They easily could have done that and avoided all of the media attention around the big 2014 189 plan.

      • MannyGeee

        “Why couldn’t they have worked their way down to 189 over the course of a few seasons by spending smarter? ”

        Because $189M (and the inherent financial benefits tied to that number) just became a thing very very recently. Its not like they knew about it back in 2010 and they are JUST NOW deciding to act on it.

        • mitch

          Right, but they still could have made it a 3 or 4 year plan and took the hit along the way. Something like:
          2014: 210 ($10mil penalty)
          2015: 200 ($5mil penatly)
          2016: 189 (tax resets)

          • http://www.riveraveblues.com Mike Axisa

            The CBA expires in 2016. By then the luxury tax might not exist.

            • blake

              when have they ever changed the rules to benefit the Yankees though? Essentially every time they are changed they make it harder on them….

            • mitch

              Thanks, I didn’t even consider that.

              It will be an interesting situation to follow. As it currently stands, the 50% penalty isn’t THAT brutal. Attendance, playoff $, general fan interest, etc. are all things that could be hurt if the team takes a few steps back.

              If they stop paying setup guys 12+ mil, stop giving out 10 year contracts to guys over 30, and rely a little more on internal options, they could easily cut costs long term without risking the on-field product.

          • Need Pitching & Hitting (but mostly hitting)

            Part of the issue with that is the current CBA ends with 2016. They don’t know what the tax might reset to for 2017 or what revenue sharing rebates may be available to them after this CBA.

          • Steve (different one)

            This also ignores the “rebate” they get for getting under.

            The league has stacked the deck in a concerted effort to reign in the Yankees.

            While we might not like it, at some point the incentives are too great to ignore.

    • jjyank

      Well I don’t recall a lot of slam dunk free agents during that time that they passed on, either. In fairness, they did offer Cliff Lee and ass-ton of money, and he turned it down. This offseason in particular, really no free agent made me think “OMG SIGN HIM NOW!!”

      • MannyGeee

        I agree. But we, good sir, are in the minority.

        SIGN TEH JOSH HAMILTONZ, aND AJ PEERZINKI TOO!!!

        (you know, you were there…)

    • http://www.twitter.com/JoeRo23 The Honorable Congressman Mondesi

      “The goal of any business is to make money first and foremost.”

      This is pointless, but I see comments like this pretty often and I just thought someone should interject that it’s not necessarily true. Making money might be (perhaps should be) simply one goal of many.

      • LK

        Excellent comment.

        I don’t think this was the point you were trying to make at all, but I’ve never felt much sympathy for owners of sports teams (particularly the contingent in the other 3 major sports who just had lockouts) crying about how their businesses aren’t profitable enough. You don’t really buy a team to make money – you buy it to brag to all your friends about how you own a team. The current Steinbrenner clan that owns the Yankees is in a different situation than most, since they’ve inherited the team, and (I assume) it serves as their primary livelihood instead of an expensive toy.

        • Gonzo

          Didn’t Walter Haas Jr. see himself as a steward of the A’s for the fans and community? He didn’t see it as a moneymaking venture. Am I right in that? Wasn’t this covered briefly in Moneyball?

          • LK

            I know that the A’s voluntarily gave up territory to the Giants (which the Giants are now refusing to negotiate over in the A’s proposed move to San Jose) because the A’s thought it was in everyone’s best interest to still have two teams in the bay area. It would be nice if every owner thought like that.

      • Jim Is Bored

        One of the old guard!

        • Havok9120

          He’s always watching.

          • http://www.twitter.com/JoeRo23 The Honorable Congressman Mondesi

            I like to watch.

  • Chris

    Hal is going to make me stop liking the Yankees organization.

    Fucking spoiled elitist needs to stop being greedy. Why does anyone like him need more money than the amount he has already.

    This is what’s wrong with capitalism. It can get psychotic with the nothing-is-enough type greed.

    • Jim Is Bored

      “Fucking spoiled elitist needs to stop being greedy.”

      Could describe a lot of yankee fans.

      • trr

        Personally, I’m Ok with taking one step back to go two steps forward. I’m not OK with a “fuck the fans” sort of attitude

        • Cris Pengiucci

          I agree. I don’t think they’re at that “fuck the fans” point yet, and don’t believe they’ll get there either. yearly profits are all well and good, but if they come at the expense of team value, they could be “throwing out the baby with the bath water”.

          • Laz

            People are overreacting. If he was saying I’m going to be like Loria and run a $50M payroll it would be justified, but he isn’t. $189M payroll is still near the top of the league, and this still is a playoff contender team. This team has done a lot more this winter than the Rangers. Yankees lost Soriano and Swish, and got back Mo and Gardner, that is alot worse than the Rangers loss of Hamilton.

            • MannyGeee

              THIS

              Again for emphasis:

              10 of the last 11 World Series winners DID NOT have the highest payroll in the league.

              Read: If they can’t win with $189, which could very well still be the highest payroll in the league, then there is a very VERY different type of problem with the team.

              • http://www.riveraveblues.com Mike Axisa

                That’s just an anecdote, not evidence of anything. Ten of the last 11 WS winners didn’t have Robinson Cano either, but that doesn’t mean the Yankees should get rid of him.

                • MannyGeee

                  its anecdotal, sure… but assuming success at $199M while assuming doom at $189M is just as asinine, no?

                  People have drawn this line in the sand, insisting that the Yankees no longer care about them or winning or George’s Legacy (TM) because they don’t want to spend all the money that spoiled fans want them to. All I am saying is that you can STILL WIN at $189. Shit, you can win at $89, albeit much much harder to do so…

                  • LK

                    I get what you’re saying, but I don’t think it’s really being honest. Sure, most of the WS winners have won with less than $189M. How many of them made the playoffs every year but one since 1995? If you want to say, well they can field a good team and maybe get hot in the playoffs and pick up a WS or 2 over the next decade spending under $189M, then yes of course they can. If you want to say they can make the playoffs every year spending that, we don’t actually have any recent examples of that.

                  • Andy Pettitte’s Fibula (formerly Manny’s BanWagon)

                    No one with half a brain would make the statement that they can’t win at $189 and while spending $210-220 certainly isn’t a guarantee that they will definitely win, the extra $30 million in payroll would undoubtedly allow them to put a better team on the field. That’s the problem that most of us have with this budget.

                    You said it yourself.
                    Shit, you can win at $89, albeit much much harder to do so…
                    By your reasoning, they can win at $189 but it would be easier to win at $220.

                  • Jarrod

                    Would be almost impossible to win at $89m while paying the Albatross (TM) $27m+ – 10 of the last 11 teams to win a WS didn’t have that stink hangin around.

              • LK

                With the Dodgers, there is absolutely no way that $189M will be the highest payroll in the league. It will probably be the 2nd highest for the near future.

        • Jim Is Bored

          I agree.

          But Chris’ comment just reeked of irony.

    • Mister D

      This is the problem with socialists. Always demanding other people spend money on what they want for themselves.

  • blake

    Lohud Yankees Blog ?@LoHudYankees
    Was told today that the Yankees have no interest in C George Kottaras, who was recently DFA by Oakland.

    • mitch

      Stewart, et al better provide some outstanding defense this year.

    • Long-Past-His-Day-Rod

      Good. They have plenty of lousy backup catchers already.

      I’d rather have them direct whatever money they’re going to spend towards DH/RH OF at this point.

      • Laz

        Kottaras was pretty close to Martin’s production last year. Would definitely solve the catching situation.

        • Need Pitching & Hitting (but mostly hitting)

          “Solve” is probably an overstatement. Martin’s offense with lousy defense doesn’t really solve anything (though he was better than Martin offensively last year, and the year before)

        • Long-Past-His-Day-Rod

          I disagree that signing Kottaras would “definitely solve the catching situation.”

          You say he was pretty close to Martin’s production last year but you’re comparing a backup to an everyday C. Kottaras posted a 0.7 WAR compared to Russell’s 1.5 for 2012. By all accounts his defense is not as good as Martin’s, and he’s not going to play every day. So they’d be moving from a Stewart/Cervelli platoon to a Kottaras/Cervelli or Kottaras/Stewart platoon. Still lousy.

          • mitch

            He would have at least made the catcher competition a little more interesting.

            At this point i’d settle for a Romine/Kotteras platoon. It would probably be terrible, but there’s a chance it could be mediocre. We know a Stewart/Cervelli combo will be terrible.

            • Long-Past-His-Day-Rod

              I’m not as horribly concerned with the potential of a Stewart/Cervelli platoon as a lot of people. Stewart is good defensively even if he’s atrocious at the plate, and Cervelli has shown he can hit decently (not great, but decent for a C) at the Major League level (atrocious AAA year in 2012 aside). They’ll be a weak spot in the lineup for sure, but they’re not going to make or break the team IMO.

              I’d like to see Romine get a shot at the job in camp too, but it seems like they’re planning on starting him in AAA, which may not be a bad thing. Hopefully he’s ready to contribute at some point in the season.

          • Herby

            I think he’s pretty much just more of the same of what we’ve already got, it’s just a new name that some want to salivate over and proclaim the answer to the prayers of, “our lousy catcher situation.” I’d rather give a chance to see what we have, give Romine a shot down the line if not on the team right away. If it’s as horrible as what some are predicting then pull someone in at the trade deadline. Otherwise you risk the possibility of delaying Romine’s development even further.

            • mitch

              If Romine’s defense is as good as advertised, why not just throw him to the wolves right away? If they resigned Martin, i’d say keep him in AAA for consistent reps. There’s no great option now, so why not just give him the reps in the majors? How much worse could he be offensively than Stewart or Bobby Wilson?

        • blake

          Kottas would at least give them a lefty/righty platoon and he doesn’t cost anything…..

          • Need Pitching & Hitting (but mostly hitting)

            He might cost something….there’s a pretty good chance he gets traded before being waived.

        • Long-Past-His-Day-Rod

          I didn’t mean to completely discount your point that Kottaras’ offensive numbers are comparable to Martins, as they in fact are. But I think we need to keep in mind we’re comparing a guy who plays 120-130 games a year to one who played something like 56 (might be off a little) in 2011 with under 200 PA and 85 (again, might be a little off) in 2012 with barely over 200 PA.

    • viridiana

      Another “no interest” story. How many have there been this winter? Yankee management apologists defend team but it seems obvious the strategy is both poorly timed and self-defeating. Sure, cut payroll, but if you do it while everyone else is flush with cash you risk both decline in performance and fan interest. About the only thing Yankee fans can hope for is that it is a one-year fiasco and that the drop in fan interest — and revenues — will wake up Hal. Better yet, let him sell rather than continue to destroy his father’s legacy.

      • MannyGeee

        “Another “no interest” story. How many have there been this winter?”

        About as many as every winter… Jus Sayin

      • Long-Past-His-Day-Rod

        Hard to have a lot of interest in FA’s when the pool is incredibly weak.

        • viridiana

          Yeah, but a lot of them would have filled very specific needs this team has.

          • Long-Past-His-Day-Rod

            I would argue that there really haven’t been any “slam-dunk, perfect fit” type of players available this entire off-season at a cost the Yankees are willing to pay (besides the pitchers they re-signed). A case could be made for Reynolds instead of Youk, and a case could certainly be made for having kept Martin, but outside of those nothing has really jumped off the page at me.

            Yes, off-seasons like this can get frustrating, but we have to ask ourselves if it would really be worth it to overpay a “meh” player just for the sake of signing someone.

          • Havok9120

            Not nearly as perfectly as you seem to be portraying it. They’re secondary and tertiary guys or guys with massive question marks and red flags.

      • Steve (different one)

        Right, but Kottaras doesn’t make any money, so your point is irrelevant.

        I disagree with it, but they must not like Kottaras for baseball reasons.

        I’d have been interested, but it’s not a money issue. He is slated to make $1M next year, at most it’s a marginal cost of $500K.

  • Anthony

    I’m having a hard time understanding this. The top 15 biggest markets are now disqualified from revenue sharing proceeds, unless they increase revenue? So then if teams like the Jays and Nats DO increase revenue, they are re-eligible for revenue sharing, which decreases the amount of money the Yankees would get back? Did I get that right?

    • Gonzo

      I’m not 100% sure, so I’m with you. I’ll try to break down my thoughts. I am probably wrong so let’s see if the collective brainpower of RAB can get this right.

      I think this has to do with teams that have top 15 markets but not top 15 revenue. Those teams are expecting more revenue in 2013 and beyond. They did so ostensibly by spending more money.

      This is where it gets a little unclear.

      I’m not sure if that means that they Nats, Blue Jays, and Braves could threaten to break into the top 15 in revenue or if they would require less revenue sharing the closer they get to the top 15. In the first case, is there an assumption that if they break into the top 15 in revenue that their revenue sharing money would go to a team that wouldn’t have to forfeit any of it? In the second case, is there a sliding scale of revenue sharing for those teams? Would they take in less and thus give back less?

      Simply put, the money that they would be giving back to revenue sharing payers would go to teams that wouldn’t have to pay refund them. ????

    • blake

      the new CBA requires the 15 biggest markets to refund their revenue sharing money (if they get it) at increasing amounts until it’s 100% in 2016. This is supposed to entice the bigger market teams to get “off welfare” so to speak….they wouldn’t become able to get revenue sharing money again but the idea would be they’d increase revenues so they wouldn’t need it. At the moment only 4 teams (I think) will be giving money back….

    • Mo

      No. The top 15 biggest markets are now disqualified from revenue sharing proceeds, no matter what. The way this works is that revenue sharing will still be alotted to all eligible clubs, but top 15 market clubs will not receive that money. Instead, revenue sharing funds allotted to top 15 markets will be returned to the payor clubs, such as the Yankees.

      What Rosenthal is suggesting is that certain top 15 market teams will see increased revenue due to increased payroll/contention. When their revenues go up, the amount of money they are allotted in revenue sharing will go down. This means that there is less money to be returned to the payors, such as the Yankees, thereby limiting the gains. I think he’s overstating and may end up pretty damn wrong.

      • Gonzo

        I could see the Nats and Blue Jays having decent revenue growth if they are really competitive in 2013 and beyond. I don’t know how much you could expect from the Braves. That team had trouble selling out playoff games not to long ago. JMO

        • blake

          I think the thing is is that there are only 4 teams at the moment who are both in the top 15 markets and get revenue sharing money….(Braves, A’s, Jays, and Nats)….and the A’s will get immunity from have to refund their money if they can’t get a new stadium.

          So there may be a shortage of teams to actually pay money back to the Yankees….we’ll see

        • Mo

          Nats and Jays are likely to have growth, although the Jays have some downaside potential given the injury-prone nature of many of their key guys. On the flip side, the White Sox could drop from being a payor to a payee (such that they would be eligible for revenue sharing that they would then have to forfeit), and the Astros are basically a lock to do so. Might end up being a push.

          • Gonzo

            Ahh, I see. I get what you’re saying now. Cool beans.

          • blake

            very true….we’ll just have to see how it plays out….but MLB’s goal I think in this was to get the big market teams off welfare…

            • Mo

              Agreed. I don’t know if this was the impetus for those clubs spending more, and honestly I think the prospect of winning probably drove that more than anything, but they are getting what they wanted.

    • Need Pitching & Hitting (but mostly hitting)

      No. Those teams still will be phased out of revenue sharing eligibility, regardless of their revenues.

      How it affects the Yankees is that their potential revenue sharing rebates come from the pool of revenue sharing money forfeited by big market teams. If those teams increase their revenues, the amount of revenue sharing money that they would forfeit would be smaller, making the rebate pool smaller.

  • Frank

    The most frustrating part from a fan’s perspective: It’s like the Steinbrenner’s have stocked their pantry with caviar, and when you visit for dinner they won’t even order a lousy pizza because they’re on a budget. BUT – this too shall pass.

  • philip

    what ever happened to the money the yanks were supposedly able to deduct from rev sharing for building the new stadium. I remember reading a lot that they could use the payments for the stadium for their revenue sharing checks?

  • Gonzo

    Read the trade proposal at the bottom of the comments in that article. PURE GOLD!

    The response? PURE GOLD!

  • Bavarian Yankee

    “Got it?”

    ehm … no. I mean yes but no. Got it? ;)

    Just spend that money, Hal. You may be sad but we’ll be way happier. One has to (literally) take one for the team and that person is YOU. SPEND THAT MONEY!

  • Daren

    Apropos of nothing, going to the new Yankee Stadium is nowhere near as much fun as going to the old Yankee Stadium. That’s about all I have to say.

  • OldYanksFan

    I think the Yankees realize that along with the CBA gunning for them, you just can’t afford to build a Winner on FAs alone. While all the FA’s were a big part of it, the Dynasty was built on the backs of the Fab Five. You need a core of good, young, cheap talent.

    Also, a decade ago, you got a lot more for your FA money then you do now.

    I think the FO is responding to the reality of the current Yankees situation. Yesteryear’s strategy is no good going forward. Other teams have been banking young talent and are also spending more money.

    The bottom line is the Yanks need to rebuild, and the new CBA simply put the timeline on it.

    • MannyGeee

      You make the most sense of anyone in the history of ever. Well said

    • Steve (different one)

      Agree with this. Meanwhile they are trying to walk a tightrope by fielding a competitive team via veterans on one year contracts.

      I think they will compete this year, and spend 2014 taking a step back.

    • RetroRob

      Yup. I think you nailed it.

    • Andy Pettitte’s Fibula (formerly Manny’s BanWagon)

      I agree. There has to be a balance of cheap young talent coming up from the minors steadily along with the payroll flexibility to keep those who you want and fill in the gaps with the occasional FA.

  • RetroRob

    It strikes me that the Yankees will save more than $40M just on payroll alone in 2014, since they’re going to have to drop their payroll salary level to under $172M next year. It’s not $189M in salaries. From there, the team will need to factor in the roughly $11M in benefit expenses, and the liklihood of paying A-Rod his $6M marketing bonus for #660. That takes the target salary range down to $172M, and in reality it will need to be lower to ensure they have some flexbility. Then add in no luxury tax, and whatever rebate they’ll get in revenue sharing, and seems like the “savings” should be $60M plus on the absolute low end. Yet most is coming from payroll cuts.

    If they re-sign Cano, they’ll have close to $100M already locked up in just four players, and who knows what Jeter will do and what he’ll cost.

    Still not sure how they’re going to do this, unless they let Cano walk.

  • Jarrod

    The more I think about it the more I think the whole get under $189m is a crappy insult to fans.

    All the money “saved” will go straight into the Steinbrenners pockets so why should the fans get on board with this? Even more insulting is the fact that the team has to deal with A-Rod’s stupid contract, which the Steinbrenners put in place, while trying to be competitive under $189m which is very difficult.

    I remember Hal saying that you shouldn’t have to spend $200m to win a championship – that’s probably true for teams that don’t pay their league average (at best) 3B $27m per year – and you are responsible for that Hal!

    • Mister D

      No, that was Hank. And that’s why Hank no longer has anything to do with day-to-day operations.

      For the last decade-plus I have heard Yankees fans heap praise upon the Yankees front office for being willing to put their money on the field, and the owners have been willing to let the other 29 teams suck off their revenue sharing teat. Now, after MLB and the players union pass a CBA deliberately designed to punish the Yankees, the Steinbrenners have decided to stop rewarding teams like the Marlins, and restructure the team for the new rules. At no point have they chosen to sell off the team’s best players, or failed to field a competitive team. They still have the second highest payroll in the game by a wide margin, but the fans decide to piss on the owners for being greedy and cheap. Talk about your ingrates…

      • Jarrod

        Cheers for the correction, I now blame Hank!

        While what you say about ungrateful fans may be true, lets not forget that the Yankees are one of the biggest, most profitable sporting franchises on the planet. Let’s not carried away thinking that ownership were going broke fielding all of those teams. The Yankees should theoretically always have the biggest payroll in baseball because they have the biggest market and the biggest brand – you don’t see morons who know nothing about baseball wandering down the street wearing a Blue Jays cap.

        Ownership better not forget what made the Yankees so popular – the best players and a winning team. They can stop that pholosophy at their own perril.

        I don’t personally think that it is ungrateful for fans to expect business as usual from the Yankees ownership.

        • Mike F

          You were right the first time. Hal was quoted just a week and a half ago about not needing a 220 million dollar payroll to win a championship.

          You also don’t need 450 million dollars in gross revenue (that’s revenue after estimated revenue sharing) to have a 189 million dollar budget for player contracts. The difference between the Yankees revenues and that of other ballclubs is even greater than the difference in spending.

          I don’t believe the new CBA is as big of a “game changer” as some are portraying it when you look at the overall picture of increasing revenues. To me it’s clearly a case of valuing profit over competitive advantage. So yes it is a slap in the face to the fans.

  • 42isNotMortal

    Can we get a baseball fan back in charge of things?

    • Mike F

      Please. Although I think they’re all “finance” guys like Hal.