Forbes: Yankees worth an estimated $3.2 billion

Depth Arms: Miscellaneous 40-Man Roster Pitchers [2015 Season Preview]
Open Thread: March 26th Camp Notes
(Presswire)
(Presswire)

Once again, the Yankees have been ranked as the most valuable franchise in baseball. Forbes released their annual franchise valuations yesterday, and New York claimed the top spot with an estimated value of $3.2 billion. This is their 18th consecutive year atop the Forbes rankings. The Dodgers are a distant second with an estimated value of $2.4 billion.

The Yankees generated an estimated $508M in revenue last year — the Dodgers were again second at $403M — again the most in baseball, though their $8.1M operating income ranked only 22nd out of the 30 clubs. The Cardinals ($73.6M), Cubs ($73.3M), and World Series champion Giants ($68.4M) had by far the highest operating incomes. From the write-up:

The New York Yankees are worth the most, $3.2 billion, and are tied with the NFL’s Dallas Cowboys as the most valuable U.S. sports team (Spanish soccer club Real Madrid, worth $3.44 billion, is the most valuable in the world). The Yankees have been the most valuable baseball team each of the 18 years Forbes has valued MLB franchises since 1998. During the 2014 season, the Bronx Bombers generated a record $508 million of revenue after deducting PILOT bond payments of $78 million and the $90 million the team contributed to baseball’s revenue-sharing system. The team raked in over $100 million in local television rights payments, and Derek Jeter’s last season in pinstripes goosed ticket and merchandise sales.

The franchise value is up from $2.5 billion last year, according to Forbes. The Yankees were valued at $2.3 billion in 2013, $1.85 billion in 2012, $1.7 billion in 2011, and $1.6 billion in 2010. The huge jump in franchise value from 2013 to 2014 was thanks in part to baseball’s new national television deals, as well as the team’s deal to sell part of YES to News Corp.

Despite their continued reign atop the franchise valuations — to be fair, Forbes is only estimating — Hal Steinbrenner is content to throw away his team’s inherent market advantage by reducing payroll to get under the luxury tax threshold in two years or so. I understand why he wants to do it, luxury tax is wasted money, but as a fan I don’t like it all. The Yankees aren’t taking full advantage of the New York market and their on-field product both is and will continue to suffer.

Depth Arms: Miscellaneous 40-Man Roster Pitchers [2015 Season Preview]
Open Thread: March 26th Camp Notes
  • Deep Thoughts

    And can we please invesigate or have a discussion about the fact that the Yankees have such a tiny net income compared to their revenue stream by design. The details of the limited partnership make people’s eyes glaze over but there is a reason ballclub operations are isolated from YES, Legends Hospitality, and the solar system of corporate satellites revolving around the team at the center. No need to have bake sales for Hal and the other partners just yet.

    • SweetSpot

      The Yankees are a very expensive operation to fund and run.

    • blake

      I thought everyone understood that….but maybe not

      • Still Stucky

        Including Forbes.

        Why you all don’t think that’s reflected in their estimates is a true mystery.

        • Wave Your Hat

          We were referring to the net profit number, not the Forbes valuation, I think.

          • Still Stucky

            So am I.

            • Wave Your Hat

              The net profit number only referred to the ball club, I think.

              • Still Stucky

                Check to see if Forbes actually makes that distinction.

                • Wave Your Hat

                  You claimed they did, so that chore is on you.

                • Need Pitching & Hitting

                  They do.

                  “The enterprise values exclude equity teams have in non-baseball assets, such as real estate, regional sports networks or stadium businesses. The revenue figures we show for each team include all money the team gets, including tickets and premium seating, media, concessions and merchandise, licensing and other distributions from MLB’s central fund, as well as non-baseball stadium events like concerts and soccer games. Revenue are net of annual stadium debt service for which the team is responsible, as well as money teams receive, or pay, as part of the league’s local revenue-sharing system. Luxury payroll tax figures paid to MLB are subtracted from the team’s operating income.”

                • Need Pitching & Hitting

                  They do.

                  “The enterprise values exclude equity teams have in non-baseball assets, such as real estate, regional sports networks or stadium businesses. The revenue figures we show for each team include all money the team gets, including tickets and premium seating, media, concessions and merchandise, licensing and other distributions from MLB’s central fund, as well as non-baseball stadium events like concerts and soccer games. Revenue are net of annual stadium debt service for which the team is responsible, as well as money teams receive, or pay, as part of the league’s local revenue-sharing system. Luxury payroll tax figures paid to MLB are subtracted from the team’s operating income.”

        • Need Pitching & Hitting

          Probably because it’s not reflected in their estimates, as their estimates are specifically for the team, not Yankees Global.

          Not much of a mystery.

  • UnKnown

    Oh Shit. Yankees are broke….

  • SweetSpot

    You can’t write checks on a “valuation account.” If you want to accept Forbes as the truth, rather than speculation which it is albeit educated speculation, the Yankees pre-tax net income was only $8.1 million.

    • Wave Your Hat

      Means they have smart tax lawyers, corporate lawyers and accountants.

      • SweetSpot

        I hope they do.

        • Wave Your Hat

          I’m sure they do!

        • blake

          Of course they do

        • blake

          Of course they do

    • blake

      The goal is for the net profit to be close to zero so you don’t get taxed to death…..that doesn’t mean that the owners don’t pay themselves a boatload……you have to ignore that stuff….good CPAs do that by design

      • SweetSpot

        I owned a corporation for fifteen years; I understand bonus checks to reduce tax liability. The problem is they have a much more complex reality and we have no idea what their situation is aside from the Forbes speculation; so to assume that Blake makes no sense. If they are making a lot of money though, the partners, good for them it’s a for profit business and they should; they earned it. I happen to think that the second highest payroll in baseball is enough. To just throw money at the problem if you lose, is a really poor way to run a sports franchise or any business for that matter. Just my opinion.

        • Still Stucky

          Reality shaped by desire. People want this to be, so it is.

          • Mustang and The 2015 Upsiders

            Its funny you can the same about yours and sweetspot view.
            lol

        • Now Batting

          “Owned a corporation”

          You are stuck on stupid

          • SweetSpot

            I’m sorry your business acumen is zero.

          • SweetSpot

            I’m sorry your business acumen is zero.

        • blake

          Well that’s a different thing all together…..I don’t think they should just have no plan and throw money at every problem…..because a lot of the time you can’t buy what you need

        • blake

          Well that’s a different thing all together…..I don’t think they should just have no plan and throw money at every problem…..because a lot of the time you can’t buy what you need

  • Wave Your Hat

    Mike, that’s not going to be a popular opinion in some quarters around here.

    • Basil

      Who cares whether it’s “popular … around here” as long as it’s true, and it is true.

  • blake

    I love the subtle digs at Hal that Mike does….they are subtle because he can’t say Hal sucks….I can though…..Hal sucks

    • HoopDreams

      He can be pretty frustrating, Im still a bit sour over the Moncada thing. Would have made a ton of sense regarding their ‘youth movement direction’ but alas..

    • Farewell Mo and Jeet

      #Hal Failed

    • http://riveraveblues.com Mike Axisa

      I can say Hal sucks. He does suck and is pretty delusional about his team’s ability to contend.

      • Wave Your Hat

        He’s probably not really delusional.

        • http://riveraveblues.com Mike Axisa

          That’s true. It’s probably better to say he’s underestimating the intelligence of fans.

          • Farewell Mo and Jeet

            He probably just doesn’t give a shit as long as his profits are huge.

        • blake

          i think it’s more a case of him not being as savvy as he thinks he is

        • blake

          i think it’s more a case of him not being as savvy as he thinks he is

      • SweetSpot

        So if you accept Forbes contention that the Yankees had $8.1 million in operating income – and that ranked only 22nd out of the 30 clubs, what is this “advantage” you are referring to? Perhaps you are suggesting they use a line of credit to fund the Scherzer’s of the world?

        • Need Pitching & Hitting

          That’s Yankees only, not Yankees Global.
          It also doesn’t include substantial potential playoff revenues, if they decided to field a team good enough to likely make the playoffs.

        • http://riveraveblues.com Mike Axisa

          The Yankees got a $220M up front payment as part of the News Corp. deal in Nov. 2012 and get another $220M in Nov. 2015.

          • SweetSpot

            Yes, television contracts are very lucrative these days. That’s why the Yankees can afford to have the 2nd highest payroll in baseball -and made less money than all but 8 clubs.

          • SweetSpot

            Yes, television contracts are very lucrative these days. That’s why the Yankees can afford to have the 2nd highest payroll in baseball -and made less money than all but 8 clubs.

        • http://riveraveblues.com Mike Axisa

          Also that $8.1M is the Yankees only and doesn’t include YES.

          • Still Stucky

            So where is that $100m in local TV revenue coming from?

            • Need Pitching & Hitting

              It doesn’t include their share of YES profits, or the massive upfront payments they got for their new YES deal, but I have a feeling you already know that.

              • Still Stucky

                What are the YES profits?

                • Need Pitching & Hitting

                  Large, by all reports.

                  • Still Stucky

                    What reports?

                    • Need Pitching & Hitting

                      Over $200M/year.

                      Try google.

                    • Still Stucky

                      So approximately $40 (20%) to the various owners of the Yankees, correct?

                    • Need Pitching & Hitting

                      That was an old report, but roughly yes.
                      Just from YES profits. Doesn’t include their massive profits from their sale of part of their YES stake to FOX or the upfront signing bonus from the new TV deal.

                      Plenty of cash to go around.

                    • Need Pitching & Hitting

                      That was an old report, but roughly yes.
                      Just from YES profits. Doesn’t include their massive profits from their sale of part of their YES stake to FOX or the upfront signing bonus from the new TV deal.

                      Plenty of cash to go around.

                    • Still Stucky

                      So approximately $40 (20%) to the various owners of the Yankees, correct?

                    • Need Pitching & Hitting

                      Over $200M/year.

                      Try google.

              • LazerTown

                And the upfront payments do not incentivize them to spend.

                • Need Pitching & Hitting

                  But they are available to spend. That’s the point.
                  They have plenty more money to tap into – without tapping into “valuations”.
                  They choose not to, for better or worse.

                  • LazerTown

                    Not really. People don’t typically increase their spending like that.

              • LazerTown

                And the upfront payments do not incentivize them to spend.

            • http://riveraveblues.com Mike Axisa

              That’s right payments from cable subscribers. Doesn’t include advertising and all that.

              • Still Stucky

                Why are the Yankees receiving those directly? Wouldn’t they go to YES?

                • Need Pitching & Hitting

                  The Yankees aren’t. Yankees Global does – to the extent of their 20% remaining interest. But you probably already knew that.

                  • Still Stucky

                    Okay then again why is Forbes including it? There’s a circular logic gap here, but I suspect you already knew that?

                    Is Forbes including TV revenue or not? If they are, at that revenue doesn’t come to the team directly … wait for it, Forbes isn’t being fooled by the corporate structure.

                    • Need Pitching & Hitting

                      The Forbes numbers are for the Yankees. Not Yankees Global. They aren’t fooled. They are just reporting on the actual Yankees proper. What they report is true for the Yankees proper. It doesn’t include Yankee Global.

                    • Still Stucky

                      Still missing something. I ask where is the $100m coming from, Mike yes carriage fees. But the Yankees don’t receive carriage fees. Yankee Global does. You say the Forbes numbers only include the Yankees and not Yankees Global.

                      I’ll ask on more time. Why is Forbes accounting for $100m in local TV fees if it doesn’t come to the Yankees and they’re only including the Yankees?

                    • Need Pitching & Hitting

                      The rights fees do go to the Yankees.
                      Yankees have a TV deal with YES. YES pays rights fees to the Yankees. That is included in the numbers. That goes directly to the Yankees (and is subject to revenue sharing).

                    • Need Pitching & Hitting

                      The rights fees do go to the Yankees.
                      Yankees have a TV deal with YES. YES pays rights fees to the Yankees. That is included in the numbers. That goes directly to the Yankees (and is subject to revenue sharing).

                    • Still Stucky

                      Still missing something. I ask where is the $100m coming from, Mike yes carriage fees. But the Yankees don’t receive carriage fees. Yankee Global does. You say the Forbes numbers only include the Yankees and not Yankees Global.

                      I’ll ask on more time. Why is Forbes accounting for $100m in local TV fees if it doesn’t come to the Yankees and they’re only including the Yankees?

                  • Still Stucky

                    Okay then again why is Forbes including it? There’s a circular logic gap here, but I suspect you already knew that?

                    Is Forbes including TV revenue or not? If they are, at that revenue doesn’t come to the team directly … wait for it, Forbes isn’t being fooled by the corporate structure.

                • Need Pitching & Hitting

                  The Yankees aren’t. Yankees Global does – to the extent of their 20% remaining interest. But you probably already knew that.

          • SweetSpot

            YES is 80% owned by 21st Century Fox, the Yankees only own 20%. That 20% is not owned solely by the Steinbrenner family; they have partners; Lester Crown, Donald Keogh, Donald Marron and Jerry Speyer. The Yankees get a negotiated rights fee like all sports franchises.

            • Need Pitching & Hitting

              Don’t pretend the Steinbrenners don’t have access to substantially more Yankees driven money than is included in the Forbes numbers. They are majority owners of Yankees Global, giving them majority ownership of the 20% of YES. And the majority control of the massive upfront signing bonus for the new YES deal, as well the majority of the massive influx from Fox acquiring a large part of their YES network stake.

              Fact: the Steinbrenners have plenty of Yankees driven revenues to spend substantially more. They choose not to. As is their right. As it is our right to complain when they don’t invest while fielding subpar quality teams and banking substantial Yankee fan driven $$$ in the process.

              • SweetSpot

                Really? I didn’t realize you had access to their books? Nice to met you.

                • Need Pitching & Hitting

                  There’s plenty of reports on which to draw obvious conclusions.
                  No need for access to their books.

                  • Still Stucky

                    The don’t say “fact” and then draw conclusions, you’re mixing disciplines.

                    And as always, no one is denying your right to complain. Just questioning the good sense of it.

                    • Need Pitching & Hitting

                      It’s good common sense.

                      I don’t care how much they spend, so long as they spend wisely with a clear purpose to build the best possible team. That’s been missing for some time now.

                      I’m fine with cutting payroll, so long as it’s because they’ve finally managed to develop great young players and don’t need to spend more to field a strong team.
                      I do object to cutting for the sake of cutting, especially when the end game is purely money and not building the best possible team.

                    • Still Stucky

                      The end game of building the best baseball team IS money.

                    • Need Pitching & Hitting

                      You can have one or both. They seem to be prioritizing one over the other.
                      You can have a great team, but no money.
                      You can have a mediocre/bad team, with money
                      Or you can have both.

                    • Need Pitching & Hitting

                      You can have one or both. They seem to be prioritizing one over the other.
                      You can have a great team, but no money.
                      You can have a mediocre/bad team, with money
                      Or you can have both.

                    • Still Stucky

                      Need, you strike me as an intelligent person, but you’re all over the map.

                      The San Francisco Giants prove you can have a great team, and the most profitable team, without being the most expensive team.

                      Why is the NY Yankees only path to escalate spending when we agree profit margin is in fact a driver of the game?

                    • Need Pitching & Hitting

                      I never said it was the only path. I said I don’t care how much they spend. But they haven’t developed the young talent with which to win cheaply (not yet anyways). So it’s either spend more, or don’t win. (Not that spending more would guarantee winning, but it could give them a better chance until if/when they develop the requisite young/cheap talent.)
                      If they aren’t willing to do that, then they need to keep a bigger eye towards positioning themselves for the future (which thankfully, they finally seem to be doing to some extent lately after a few years of spinning their wheels into mediocrity with the premature luxury tax plan).

                    • Still Stucky

                      Okay, what IF (for sake of argument) the Yankees WERE writing off a couple of years for true WS contention in pursuit of a new long-term path?

                      I think you’d agree they’re not going to come out and say so (no one would), but would you support a couple of lean(er) years in pursuit of a new longer-term strategy?

                    • Need Pitching & Hitting

                      I never said it was the only path. I said I don’t care how much they spend. But they haven’t developed the young talent with which to win cheaply (not yet anyways). So it’s either spend more, or don’t win. (Not that spending more would guarantee winning, but it could give them a better chance until if/when they develop the requisite young/cheap talent.)
                      If they aren’t willing to do that, then they need to keep a bigger eye towards positioning themselves for the future (which thankfully, they finally seem to be doing to some extent lately after a few years of spinning their wheels into mediocrity with the premature luxury tax plan).

                    • Still Stucky

                      Need, you strike me as an intelligent person, but you’re all over the map.

                      The San Francisco Giants prove you can have a great team, and the most profitable team, without being the most expensive team.

                      Why is the NY Yankees only path to escalate spending when we agree profit margin is in fact a driver of the game?

                    • Still Stucky

                      The end game of building the best baseball team IS money.

                    • Need Pitching & Hitting

                      It’s good common sense.

                      I don’t care how much they spend, so long as they spend wisely with a clear purpose to build the best possible team. That’s been missing for some time now.

                      I’m fine with cutting payroll, so long as it’s because they’ve finally managed to develop great young players and don’t need to spend more to field a strong team.
                      I do object to cutting for the sake of cutting, especially when the end game is purely money and not building the best possible team.

                  • Still Stucky

                    The don’t say “fact” and then draw conclusions, you’re mixing disciplines.

                    And as always, no one is denying your right to complain. Just questioning the good sense of it.

                • Need Pitching & Hitting

                  There’s plenty of reports on which to draw obvious conclusions.
                  No need for access to their books.

              • SweetSpot

                Really? I didn’t realize you had access to their books? Nice to met you.

            • Need Pitching & Hitting

              Don’t pretend the Steinbrenners don’t have access to substantially more Yankees driven money than is included in the Forbes numbers. They are majority owners of Yankees Global, giving them majority ownership of the 20% of YES. And the majority control of the massive upfront signing bonus for the new YES deal, as well the majority of the massive influx from Fox acquiring a large part of their YES network stake.

              Fact: the Steinbrenners have plenty of Yankees driven revenues to spend substantially more. They choose not to. As is their right. As it is our right to complain when they don’t invest while fielding subpar quality teams and banking substantial Yankee fan driven $$$ in the process.

          • SweetSpot

            YES is 80% owned by 21st Century Fox, the Yankees only own 20%. That 20% is not owned solely by the Steinbrenner family; they have partners; Lester Crown, Donald Keogh, Donald Marron and Jerry Speyer. The Yankees get a negotiated rights fee like all sports franchises.

          • blake

            And soccer money !

          • blake

            And soccer money !

        • RetroRob

          I certainly don’t accept that number. I believe it’s off by a few hundred million.

      • Still Stucky

        This is a low point for sure.

      • blake

        Right on!

      • blake

        Right on!

      • Farewell Mo and Jeet

        Amen! Limiting your ability to build a winning team for no good reason is ridiculous IMO

        • Centaur Hips

          There is a reason. Profit. And a much, much, smaller reason for not spending more is less top FA talent hitting the market and dealing with the decline of players during their deals but that’s somewhat of an excuse since there’s still talent out there.

        • Centaur Hips

          There is a reason. Profit. And a much, much, smaller reason for not spending more is less top FA talent hitting the market and dealing with the decline of players during their deals but that’s somewhat of an excuse since there’s still talent out there.

      • Farewell Mo and Jeet

        Amen! Limiting your ability to build a winning team for no good reason is ridiculous IMO

  • Farewell Mo and Jeet

    Despite their continued reign atop the franchise valuations… Hal Steinbrenner is content to throw away his team’s inherent market advantage by reducing payroll to get under the luxury tax threshold in two years or so. I understand why he wants to do it, luxury tax is wasted money, but as a fan I don’t like it all. The Yankees aren’t taking full advantage of the New York market and their on-field product both is and will continue to suffer.

    Though many will try, this is pretty indisputable.

  • just_add_bacon7

    If Hal can get them under the threshold as a one-year reset, then it makes total sense.

    After that, though, he damn well better let Cashman start blowing every other team (including the Dodgers) out of the water. You’re not running the Kansas City Royals here, trust fund man. These are the Goddamn New York Yankees!

    • Wave Your Hat

      Thanks to the TV deal, there’s no outspending the Dodgers anytime soon.

      • blake

        I read yesterday that time Warner loses like 100 million a year on that deal

      • blake

        I read yesterday that time Warner loses like 100 million a year on that deal

  • Still Stucky

    Ironic Mike that perhaps the biggest drags on this team are Alex Rodriguez, Tex and Sabathia.

    • Basil

      They weren’t “drags” on the goddamned team for you when the team was winning the WS and getting into the post-season regularly. Show some common sense.

      • Still Stucky

        I’m merely reflecting the reality that eventually, the bill has to come due. Which is the very basic, very fundamental premise of this argument.

        Some of you guys just want to spend OVER the poor decisions already made, which aren’t even as simple as the willingness to spend.

        • LazerTown

          I agree.

        • LazerTown

          I agree.

        • BigDavey88|formerly BigDavey88

          Yes, I’m all for the Yankees signing free agents when it makes sense, even if there will be blow back at the end of the contract and the roster construction can handle/mitigate it.

          It’s just that, right now, we have enough blowback and it isn’t being mitigated. Throwing more money at the problem isn’t always the best solution and it certainly isn’t now ‘just because the team can’

          Though to beat that drum once again: I wish they signed Moncanda.

    • blake

      Ironically Hal and Hank signed Arod against their GMs wishes

      • Farewell Mo and Jeet

        I think that was all Hank’s doing if I recall correctly

        • blake

          Hal had to sign off on it I’m sure

          • BigDavey88|formerly BigDavey88

            I’m sure it wasn’t hard for either of them to lock up the number 1A or 1B player on the planet, pre-steroid stuff, anointed new home run king.

        • blake

          Hal had to sign off on it I’m sure

    • blake

      Ironically Hal and Hank signed Arod against their GMs wishes

  • http://batman-news.com nyyankfan7

    I really don’t think it’s fair to act like Hal is a dumbass for wanting to get under the luxury tax threshold. If anyone here was running a business and got to a point where for every dollar they spent to improve their business it cost them $0.50 in taxes we would all do whatever it takes to get rid of that tax, even if it meant making our business suck for a short period of time – nobody likes seeing money just given away for no good cause. Now that being said, have the Yankees gone about it properly? Absolutely not. They’ve made their own mess by signing some ridiculous contracts and changing their business plan from year to year based on kneejerk reactions and now they have to clean it up. I personally want them to get under the damn luxury tax and soon so they can return to spending ass loads of money. I will reserve my judgement on Hal’s competence as an owner until that time because if they reset the luxury tax and still continue to operate under the assumption that they don’t need to spend money then my irrational hatred for him will grow leaps and bounds like most of the people’s around here has in the past 2 years.

    • Guest

      You can’t really think like that though.

    • Guest

      You can’t really think like that though.

    • LazerTown

      You can’t really think like that though. It’s not just that the cost is higher, but is there still money to be made by producing one more unit of entertainment? Things cost more in NY, but way more money can be made in NY by having a better team than other places.

      http://upload.wikimedia.org/wikipedia/commons/thumb/f/fd/Costcurve_-_Marginal_Cost_2.svg/250px-Costcurve_-_Marginal_Cost_2.svg.png

      • http://batman-news.com nyyankfan7

        Yeah but they aren’t being taxed 50% of each dollar because they are in New York so that’s irrelevant. LA and Chicago are expensive cities to live in as well and they aren’t paying that tax. And if they do reset the luxury tax they won’t have to pay the tax and any money they are currently paying towards that tax are dollars freed up to spend on more talent. So yeah, I can think that way.

        • LazerTown

          They still would pay the tax, just a bit lower rate. You can make more money off of the team in NY than anywhere else. At $1 FA salary you may only be making $1.25 in return in Chicago, but $2 in NYC. You don’t just look at the fact that after a certain quantity your product suddenly costs more to produce, but rather as a business owner you evaluate things to judge if you can still make money off that free agent contract even with the tax.

          • http://batman-news.com nyyankfan7

            I’m sorry but I don’t believe that NY can make that much more money on a team than any other major market especially with TV deals being what they are these days. If Chicago can make $1.25 per $1 NY isn’t making another 300% on that same dollar. And being forced to pay 50% tax is a major factor. If there is a superstar out there right now the Yankees wanted that cost $20 mil for this year – it would actually cost them $30 million, I know not exactly b/c you can’t just say this guy’s salary is part of the $189 and this other guys is the amount over it – since I don’t want to do the math for argument sake I’ll say it is actually $27 million. $7 mil isn’t chump change – it’s like paying another guy’s salary and getting zero return.

          • http://batman-news.com nyyankfan7

            I’m sorry but I don’t believe that NY can make that much more money on a team than any other major market especially with TV deals being what they are these days. If Chicago can make $1.25 per $1 NY isn’t making another 300% on that same dollar. And being forced to pay 50% tax is a major factor. If there is a superstar out there right now the Yankees wanted that cost $20 mil for this year – it would actually cost them $30 million, I know not exactly b/c you can’t just say this guy’s salary is part of the $189 and this other guys is the amount over it – since I don’t want to do the math for argument sake I’ll say it is actually $27 million. $7 mil isn’t chump change – it’s like paying another guy’s salary and getting zero return.

        • LazerTown

          They still would pay the tax, just a bit lower rate. You can make more money off of the team in NY than anywhere else. At $1 FA salary you may only be making $1.25 in return in Chicago, but $2 in NYC. You don’t just look at the fact that after a certain quantity your product suddenly costs more to produce, but rather as a business owner you evaluate things to judge if you can still make money off that free agent contract even with the tax.

      • http://batman-news.com nyyankfan7

        Yeah but they aren’t being taxed 50% of each dollar because they are in New York so that’s irrelevant. LA and Chicago are expensive cities to live in as well and they aren’t paying that tax. And if they do reset the luxury tax they won’t have to pay the tax and any money they are currently paying towards that tax are dollars freed up to spend on more talent. So yeah, I can think that way.

    • Deep Thoughts

      “Tax” is a dumb loaded name for it. It’s a soft arbitrary salary cap self-imposed by cheap-ass owners who wanted to punish George for caring enough about winning to spend a ton in free agency. As such, Hal could and arguably should just consider it a cost of doing business, which it is. The fact that he doesn’t, as Mike points out, negates the team’s market advantage and results in a worse team on the field than fans would prefer.

      • Moncada’s Codpiece

        Different strokes, folks, all that. Plus, I believe Hal would have to answer to more people than George did, be it family or otherwise.

        Still, I by and large agree that while the reset would be nice and they would gain SO MUCH flexibility come 2017 if they stick to it, this issue isn’t going away. At least he hasn’t gone full Pohlad.

      • Moncada’s Codpiece

        Different strokes, folks, all that. Plus, I believe Hal would have to answer to more people than George did, be it family or otherwise.

        Still, I by and large agree that while the reset would be nice and they would gain SO MUCH flexibility come 2017 if they stick to it, this issue isn’t going away. At least he hasn’t gone full Pohlad.

    • Deep Thoughts

      “Tax” is a dumb loaded name for it. It’s a soft arbitrary salary cap self-imposed by cheap-ass owners who wanted to punish George for caring enough about winning to spend a ton in free agency. As such, Hal could and arguably should just consider it a cost of doing business, which it is. The fact that he doesn’t, as Mike points out, negates the team’s market advantage and results in a worse team on the field than fans would prefer.

    • blake

      Nobody thinks they are dumb for making it a goal…..but doing it at the expense of the quality of the team is counterproductive.

      • http://batman-news.com nyyankfan7

        what blog are you reading? there are plenty of morons on here who cuss the fact that Arod and CC are owed so much money and in the same breath call Hal a tightass for letting Cano walk.

        as my post said – they have gone about it all wrong and I won’t defend some of the kneejerk moves they have made but I reserve my judgement for what happens after they reach the goal of resetting the tax, if that even is their goal.

        • blake

          I mean fans with a clue…..I don’t count the morons. Hell if they wanted to do it that bad they should have just done it last year since they had already basically wasted 4 off seasons planning for it.

        • blake

          I mean fans with a clue…..I don’t count the morons. Hell if they wanted to do it that bad they should have just done it last year since they had already basically wasted 4 off seasons planning for it.

      • http://batman-news.com nyyankfan7

        what blog are you reading? there are plenty of morons on here who cuss the fact that Arod and CC are owed so much money and in the same breath call Hal a tightass for letting Cano walk.

        as my post said – they have gone about it all wrong and I won’t defend some of the kneejerk moves they have made but I reserve my judgement for what happens after they reach the goal of resetting the tax, if that even is their goal.

    • blake

      Nobody thinks they are dumb for making it a goal…..but doing it at the expense of the quality of the team is counterproductive.

  • ÅndyInSunnyDB

    Yankees are one of only 2 teams (Cubs) that had ticket sales higher than their payroll, and they cleared it by $28M.

  • Moncada’s Codpiece

    WHY AIN’T THE YANKEEZ BUYING ALL TEH PLAYAS WITH THEIR 3.2 BILLI0ON!? THAT WOULD BE LIKE…..AT LEAST EIGHT MONCADAS!!!!

    /s

  • Austinmac

    As a fan I have long said I have a fan’s perspective. Not spending for more profitability does nothing for me. Use your advantage as you can be sure others use theirs.

    Accountants can make net profit a lot of different figures dependent upon accounting decisions. I find it hard to believe the Yankees only netted $8M with income$100M more than the Dodgers and their payroll.

    • RetroRob

      I’m sure the Yankees and most if not all MLB teams get a nice laugh every year when this report comes out.

    • RetroRob

      I’m sure the Yankees and most if not all MLB teams get a nice laugh every year when this report comes out.

  • Austinmac

    As a fan I have long said I have a fan’s perspective. Not spending for more profitability does nothing for me. Use your advantage as you can be sure others use theirs.

    Accountants can make net profit a lot of different figures dependent upon accounting decisions. I find it hard to believe the Yankees only netted $8M with income$100M more than the Dodgers and their payroll.

  • Centaur Hips

    Today’s poll:

    Rate Hal’s level of suck on this scale.

    2012 Red Sox

    Bag of dicks

    Knicks

    Brendan Ryan’s hitting

    Randy Levine

    Golf ball through a garden hose

    Chris Stewart

    • Farewell Mo and Jeet

      I’d make Hal on honorary Knick since I think that’s the worst thing you could be called on your list

    • Farewell Mo and Jeet

      I’d make Hal on honorary Knick since I think that’s the worst thing you could be called on your list

    • blake

      2nd from the top

  • blake

    I don’t blame the Yankees for wanting to get under the tax either…..IF they can do it and still field a title contender…..and I mean a real one…not Hal’s spun version of one.

    If they can’t do that then it’s counterproductive and dumb

  • blake

    I don’t blame the Yankees for wanting to get under the tax either…..IF they can do it and still field a title contender…..and I mean a real one…not Hal’s spun version of one.

    If they can’t do that then it’s counterproductive and dumb

  • blake

    The gap between whatever soccer team is the richest and the Yankees has closed significantly hasn’t it? yanks could be the most valuabke team in all of sports soon…..and still be passing on Yoan moncadas

    • Still Stucky

      Blake, how do you know the Moncada bidding was an open one in which they had an opportunity to simply top the Red Sox bid if they choose to?

    • Still Stucky

      Blake, how do you know the Moncada bidding was an open one in which they had an opportunity to simply top the Red Sox bid if they choose to?

      • Need Pitching & Hitting

        It’s been reported pretty widely.
        I know you’re not big on using publicly available information, though.

        • Still Stucky

          May I see a link?

          You may not be used to this, but I’m really asking… if you have better, relevant info, I actually want to see it.

        • Still Stucky

          May I see a link?

          You may not be used to this, but I’m really asking… if you have better, relevant info, I actually want to see it.

      • Need Pitching & Hitting

        It’s been reported pretty widely.
        I know you’re not big on using publicly available information, though.

      • blake

        Why would an agent do that? It would be crazy to not give the Yankees a chance to top an offer

        • Still Stucky

          Same reason the Japanese posting system is closed bidding.

          • blake

            That’s because that’s the rule ….and how the agreement is structured. I’m sure the agents wouldn’t have it that way

          • blake

            That’s because that’s the rule ….and how the agreement is structured. I’m sure the agents wouldn’t have it that way

          • Need Pitching & Hitting

            was

            • blake

              It’s still blind I think but it’s capped at 20 million so basically if the player is good then everyone will bid the max

              • Need Pitching & Hitting

                It’s essentially completely open now. The posting team sets the posting fee (up to $20M) and then any team is free to negotiate with/sign the player. They’re just on the hook for the predetermined posting fee in addition to the contract.

                • blake

                  Yea….basically it only matters for players that teams will bid less than 20 for

                  • Need Pitching & Hitting

                    I don’t think the teams bid anymore though. I think the posting fee is pre-set by the posting team.

                    • blake

                      You might be right …I haven’t looked at it much beyond what pertained to Tanaka

              • Need Pitching & Hitting

                It’s essentially completely open now. The posting team sets the posting fee (up to $20M) and then any team is free to negotiate with/sign the player. They’re just on the hook for the predetermined posting fee in addition to the contract.

            • blake

              It’s still blind I think but it’s capped at 20 million so basically if the player is good then everyone will bid the max

          • Need Pitching & Hitting

            was

        • Still Stucky

          Same reason the Japanese posting system is closed bidding.

      • blake

        Why would an agent do that? It would be crazy to not give the Yankees a chance to top an offer

  • Pkyankfan69

    Can’t pay all that LT and bling out like this son

  • Pkyankfan69

    Can’t pay all that LT and bling out like this son

  • RetroRob

    I mentioned this the other day, but the Dodgers are supposedly in negotiations with a South Korean investment firm to sell a portion of their shares (minority, of course) that would value the Dodgers at $3B. That doesn’t mean they’ll suddenly be within $200M of the Yankees, it will just push the valuation of the Yankees (and every single MLB team) higher.

    The Yankees are the blue chips of the blue chips. The most famous sporting franchise in the country. The must have of must haves for the elite. It’s impossible to even guesstimate what they would sell for if they went on the market. Way more than $3.2B. $4B? Who knows and we won’t until the Steinbrenners decide to sell, which may be 100 years from now.

    • Centaur Hips

      The rumors of selling never made sense to me. Why sell when they have a money making machine?

      • RetroRob

        The main reason to sell would be if the family wanted to monetize their inheritance and go off and do other things with that money. Yet Hal refers to this as a family business. I can’t figure out if that means at some point they’re more likely to sell once one or two of the family decide they want out, or if the other part of the family decides they’ll buy them out, or if the multiple family members makes it less likely they’ll sell. I doubt they even know. I don’t see them selling. They may love owning the team.

        • Farewell Mo and Jeet

          Wasn’t Steve Swindal supposed to be the one to run the Yankees until he and Jennifer Steinbrenner got divorced? I’m pretty sure I’ve read Hal has never been too enthusiastic at the prospect of running the Yankees.

          • RetroRob

            Yes to all this is we are to believe what’s been written. Yet much of that goes back a decade plus. It’s hard to say what Hal’s point of view is today, but I have to say that listening to Francesca interview Hal today that I really don’t believe he wants to own the Yankees, but he believes he has an obligation to run it for the memory of his father. That would suck for both him and Yankees fans.

      • RetroRob

        The main reason to sell would be if the family wanted to monetize their inheritance and go off and do other things with that money. Yet Hal refers to this as a family business. I can’t figure out if that means at some point they’re more likely to sell once one or two of the family decide they want out, or if the other part of the family decides they’ll buy them out, or if the multiple family members makes it less likely they’ll sell. I doubt they even know. I don’t see them selling. They may love owning the team.

    • Centaur Hips

      The rumors of selling never made sense to me. Why sell when they have a money making machine?

    • Still Stucky

      Which would make the idea of Hal and Hank sitting on mountains of cash if they never sell irrelevant.

    • Still Stucky

      Which would make the idea of Hal and Hank sitting on mountains of cash if they never sell irrelevant.

    • DeutschlandNY

      With a DCF calculation it would be easy to top $3B in a bid.

    • DeutschlandNY

      With a DCF calculation it would be easy to top $3B in a bid.

    • Pete22

      They already sold off about 1 billion worth of their stake in YES in going from 34% to 20% ownership, otherwise they would be at 4 billion. This is clearly a bubble for MLB. My hope is Hal sells while the market is high instead of diminishing the great brand name and counting on fans to continue to support a mediocre product, but he has shown little inclination to do so.

      • Farewell Mo and Jeet

        Hal seems pretty sensitive to criticism as seen with his piss poor spin doctoring after he didn’t sign Moncada as well as the other day when he mentioned being called cheap. If he does continue to reduce payroll and the Yankees don’t hit big with this next batch of minor leaguers, this team is gonna really fall into mediocrity and Hal has set himself up to be the target of media and fans wrath. I could possibly see him saying screw it and cash out.

        • Still Stucky

          Sensitive?

          Over baseball???

          I can’t even imagine such a thing…

          • Farewell Mo and Jeet

            You disagree?

            • Still Stucky

              No, I think Yankees fans criticizing Hal for being too sensitive over baseball is that kettle-pot thing, as this community demonstrates on the regular.

        • Still Stucky

          Sensitive?

          Over baseball???

          I can’t even imagine such a thing…

        • Pete22

          The brand has built up a good amount of good will among fans who are more likely to support the team in down years than in other markets. Once the brands good will savings is depleted, revenues will plummet, and Hal will see the light. However, as long as 3.4 million fans keep showing up at the park, Hals strategy is a money maker.

          If he can somehow get under the tax and produce a winner, he will roll in the money and valuations will go up higher. That’s what he is gambling on . That would be a great time to sell since winning is hard to sustain at that level of spending

          • Still Stucky

            That occurred in the 80s. Mattingly used to hit balls into the upper deck without a fan in sight.

            Yankees rebuilt the brand through a mix of development (the core 5), smart trades (O’Neil) and spending (Tino, Key).

            I don’t think even the most bitter fan thinks the Yanks will never sign other marque free agent. But they’re moving in a different path than the last decade which 2009 acknowledged, has produced some mixed results.

      • Farewell Mo and Jeet

        Hal seems pretty sensitive to criticism as seen with his piss poor spin doctoring after he didn’t sign Moncada as well as the other day when he mentioned being called cheap. If he does continue to reduce payroll and the Yankees don’t hit big with this next batch of minor leaguers, this team is gonna really fall into mediocrity and Hal has set himself up to be the target of media and fans wrath. I could possibly see him saying screw it and cash out.

      • RetroRob

        I really don’t know if YES is excluded. I don’t know. I just don’t know. Why are we here? Why do we exist? Let me go have another martini.

    • Pete22

      They already sold off about 1 billion worth of their stake in YES in going from 34% to 20% ownership, otherwise they would be at 4 billion. This is clearly a bubble for MLB. My hope is Hal sells while the market is high instead of diminishing the great brand name and counting on fans to continue to support a mediocre product, but he has shown little inclination to do so.

  • RetroRob

    I mentioned this the other day, but the Dodgers are supposedly in negotiations with a South Korean investment firm to sell a portion of their shares (minority, of course) that would value the Dodgers at $3B. That doesn’t mean they’ll suddenly be within $200M of the Yankees, it will just push the valuation of the Yankees (and every single MLB team) higher.

    The Yankees are the blue chips of the blue chips. The most famous sporting franchise in the country. The must have of must haves for the elite. It’s impossible to even guesstimate what they would sell for if they went on the market. Way more than $3.2B. $4B? Who knows and we won’t until the Steinbrenners decide to sell, which may be 100 years from now.

  • gageagainstthemachine
  • gageagainstthemachine
  • Farewell Mo and Jeet

    Thanks to Hal, Cashman has become the teflon GM these days.

  • Pete22

    Also, in comparing the numbers with last year the Yankees had a 47 million dollar jump in revenue.

    The revenue numbers are actually 70 million short since they exclude the payments on the PILOTs. Pilots are payments in lieu of real estate taxes, and the Yankees pay no rent. MLB does exclude it for purposes of revenue sharing since they encourage teams to build new stadiums, but that’s a sweet heart deal that served to lower Yankees revenue sharing payments by 20 million.

    Including the PILOTs, the Yankees had over 570 million in unshared revenue, not including their profit from YES which are estimated at 50 million. Their payroll was 225 million last year. That’s a 39% payroll/revenue, well below the MLB average today (44%), and much lower than the 50+ % average at the turn of the century.

    Taken together with an almost 800 million jump in valuation over last year, it seems they could have spent more. But then we already know that, don’t we.

    • Still Stucky

      Has anyone ever disputed that they “could” spend more?

      Why am I always the last to know these things?

  • bernbabybern

    Yet Hal seeks to join the ranks of the regular people under the salary cap. Those Forbes people are just lying to you!

  • Sports Guy

    thats pretty crazy considering the Yankees only have a large presence in North America and East Asia, but are still just .24 B away from Real Madrid, easily the largest sports team in the world

  • captainmike

    it’s all pretty disgusting to me

  • Eric S.

    Maybe we should boycott the Stadium until Hal shows he cares about winning vs. the cap.

  • The Original Drew

    I am no economist but what is the difference between operating income and revenue? Total income after paying off all their debts or outstanding balances?

    • Preston

      Revenue is the total amount of money they took in, operating income is the amount of profit.

    • Beauee

      Operating income is the income that comes from the actual operations of the business. For example, in the Yankees case this would be revenues from actual baseball games (stadium tickets, television, etc.). Revenues include ALL of the money that a business acquires. In other words, businesses sometimes make money by selling off assets or through investments–this is another source of income, but it is not operating income.

    • Bruce Lehmann

      I would also add that there are several different entities involved here, chiefly the Yankees and the parent holding company. There is a lot of latitude in allocating costs and revenues between the two and the Yankees appear to allocate virtually all of the profits to the holding company, whose cash flows are opaque. So the operating income of the Yankees is largely a choice. This observation certainly passes the eyeball test: the Yankees would be worth one or two orders of magnitude less than $3 billion if the appropriately defined profits were on the orer of $10-20 million per year.

  • EndlessMikeJr

    The Yankees want to get young and gritty players but that won’t help sell tickets.All their farm players are still 2 to 3 years away and only A-Rod is your star.You can’t get under that luxury tax because Didi and Headley won’t get anyone in their seats.

  • Mustang and The 2015 Upsiders

    “Hal Steinbrenner is content to throw away his team’s inherent market advantage by reducing payroll to get under the luxury tax threshold in two years or so. I understand why he wants to do it, luxury tax is wasted money, but as a fan I don’t like it all. The Yankees aren’t taking full advantage of the New York market and their on-field product both is and will continue to suffer.”

    Yep!

  • Mustang and The 2015 Upsiders

    Its going to be very interesting next winter especially if this team fails. This pass free agent market was weak the one that’s coming up looks real strong. So let see if Hal holds to his plan.

    • RetroRob

      I hope he holds to it not because I agree with it, but because it’s his obsession and he needs to achieve it so we can all move on. Frankly, I have no idea what’s on the other side of Hal’s rabbit hole, and I’m not sure he does either, but let’s find out. The only way that’s going to happen is when he gets there.

      • Mustang and The 2015 Upsiders

        What I don’t understand about the guy why does have all or nothing? Winters of 2008 and 2013 or the winter of 2014.
        I’m not asking for 2008 and 2013 every year, but when their is an obvious need go and fill it.
        Although wasn’t happy with 2014 I understood until Moncada that’s what let me know that this all about $$$ for him.

        • RetroRob

          The Moncada situation has impacted my entire viewpoint on Hal, so I agree.

  • ropeadope1

    Forbes released their annual franchise valuations yesterday, and New York claimed the top spot with an estimated value of $3.2 billion.

    I wasn’t included on the Forbes list, but I’m worth an estimated 3.2 hundred.

  • Looser Trader FotD™

    Amen Mike

  • ChuckIt

    i guess i don’t understand correctly. I assumed that cutting expenditures would increase the profit margin, therefore increasing the overall value of the club. The luxury tax is a big expenditure, & I don’t have their financials,but but the LT is pretty much an all around loss of $$, unless the team takes it to the WS, & more if they win it. Merchandising alone, in this scenario, is a big boost in the profit margin.