Archive for News
Baseball implemented a new playoff system this year, and now we might be closing in on a new instant replay system as well. Jeff Passan and Ken Rosenthal report that MLB will test out a new radar and camera-based replay system in Yankee Stadium and CitiField starting next week. It’s the same Hawk-Eye Innovations system used for boundary calls in tennis and would be used for fair-or-foul calls only.
“We continue to investigate it,” said Joe Torre, MLB’s VP of Baseball Ops. “I don’t think we’re at the point now where we want to do that, increase replay more than we have. Unless we’re confident that it’s going to be something that will work without any hiccups, we’re not planning to [officially implement] anything right now.”
The results of the test run this year will not be made public or anything, they’re just going to internally test the system. The new Collective Bargaining Agreement allows for expanded replay, and if this new system passes the test in the coming weeks, it could be officially implemented around the league next season. That, obviously, is a very good thing. The human element is the players, not the umpires.
There’s still a lot of opposition to expanding instant replay — especially for ball-and-strike calls as well as bang-bang plays on the bases — but this new testing system is a positive step forward. Even if the Hawk-Eye system flops and is impractical, at least we know that the league is making an attempt to move forward. Automated ball-and-strike calls are a long, long way off, but getting fair-or-foul calls right is progress.
After two attempts at a trial and eight weeks of testimony, a federal jury needed just 11 hours to decide that two-time Yankee pitcher was not guilty on all counts of perjury. Clemens had been under prosecution for lying to Congress in 2008 when he claimed he never took steroids or HGH injections during his playing days. The acquittal, a nice victory for Clemens and his lawyers, was hardly surprising concerning the reports from the courtroom.
Clemens, whose name will appear on the Hall of Fame ballot for the first time later this year, could have faced up to 10 years in prison for perjuring himself. Instead, the D.C. jury found that none of Clemens’ 13 statements under the microscope were untrue beyond a reasonable doubt. It seems likely that this is a case in which the difference between innocent and not guilty is a big one, and it ends a chapter of poor decision-making by government prosecutors.
Along with a subpar May, comparisons to 1965 and premature eulogies for Alex Rodriguez, unsourced whispers of an impending Yankee sale seem to crop up annually. This year, it all happened during the same week as a few hours after Joel Sherman compared the 2012 Yankees to the 1965 crew and A-Rod homered twice to end a long dinger drought, The Daily News reported that the Yankees may be for sale.
The article itself announcing the alleged sale was replete with Wall Street insiders and baseball sources. No one wanted to go on the record saying much of anything. “There has been chatter all around the banking and financial industries in the city for a couple of weeks now,” a baseball source said.
Noting that the Dodgers’ sale could lead to a $3 billion valuation for the Yanks, another unnamed source agreed on the timing. “It would definitely be the right time for the family to sell,” the source said. “The value of the team couldn’t be higher, but at the same time, it’s an older team in a division with younger teams getting better at the same time a lot of the Yankees’ core veterans are starting to go into decline.”
Of course, the age of the current team would have little impact on the intentions of someone looking to make a long-term investment in the Yanks. No one today cares about who was on the Yankees in 1973 when George Steinbrenner bought the team.
Reading the Daily News article closely though, we see the thesis begin to fall apart. The unsourced quotes concern timing. Everyone agrees now would be a great time to sell the Yanks, but “now” is always a great time to sell a baseball team. As baseball is growing with no signs of slowing down, any team — and especially the Yankees — is a valuable commodity. The News’ strongest argument for the sale seemingly is Hal Steinbrenner’s reluctance to hand out large contracts and his hands-off ownership approach. I’m not so sure either of those are negatives.
The Yankees, meanwhile, went into full-scale on-the-record denial mode. “I can say to you there is absolutely, positively nothing to this,” Randy Levine said. “The Steinbrenners are not selling the team.”
“I just learned of the Daily News story,” Hal Steinbrenner said in a statement. “It is pure fiction. The Yankees are not for sale. I expect that the Yankees will be in my family for many years to come.”
Even as Bill Madden stuck by his story, Lonn Trost too denied the rumors. “We’re aghast at such a story,” he said on the radio this morning.
“My impression is not only do they all love being part of it, I think they are interested in handing it to their kids,” Yanks’ GM Brian Cashman said to Joel Sherman. “I think they want the family to be involved for generations to come. The Steinbrenners love owning the Yankees — and they are damn good at it. I have gotten no impression that they want to do anything but own the Yankees. They are the only ones who know the truth, but my impression is they are not even entertaining selling the Yankees.”
Furthermore, Major League Baseball, involved in the sale of all of its member clubs, put out its own statement: “Major League Baseball has received no indications from any representatives of the Yankees or anyone else that the Club is for sale.”
So on the one hand, we have speculation that the club could be put up for sale, and on the other, we have everyone on record denying that the club is for sale. That doesn’t even account for Richard Sandomir’s note on the Yankees trust. In my mind, the fact that the family would incur significant tax penalties is likely the biggest factor keeping the club off the market.
As fans of the team who have long grown accustomed to the Steinbrenner’s free-spending and largely hands-off ownership, what are we to make of this? Yankee fans live in fear that a rich New York family with sports ties such as the Dolans could buy the team and ruin it. No names, though, have been attached to this offer. So are the Yanks floating this story to gauge interest? The across-the-board denials suggest not. Is someone trying to make interest in the team known? Perhaps.
Right now, we know what’s on the record: The Yankees are not for sale, and no one is on the verge of buying them. But money talks, and if the right offer comes around, the Steinbrenner family will be tempted to cash out. It’s only, after all, a business, and the Yankees today aren’t for sale until the day they are.
The baseball franchise valuation world shook when Magic Johnson, Stan Kasten & Co. purchased the Dodgers for $2 billion last month, and as expected, that sale has caught the Steinbrenners’ attention. Bill Madden and Michael O’Keeffe have heard from several sources that ownership is “exploring the possibility” of selling the Yankees. “There has been chatter all around the banking and financial industries in the city for a couple of weeks now,” said one source.
Unsurprisingly, team officials has shot down the report. “I can say to you there is absolutely, positively nothing to this. The Steinbrenners are not selling the team,” said president Randy Levine. “I read the Daily News story. It is fiction. The Yankees are not for sale. I expect (the Yankees) to be in my family for many years to come,” said Hal Steinbrenner.
Of course, there’s no harm in exploring the possibility of a sale. It actually would be foolish of the Steinbrenner to not see what the team could fetch following the Dodgers’ sale. If that franchise is worth $2 billion, what are the Yankees worth, $3 billion? Well, it’s not that simple because the Yankees can’t sell the land Yankee Stadium is built on like the Dodgers were able to sell Chavez Revine. As Richard Sandomir notes, the Steinbrenner family would assume a huge tax hit with the sale because of multi-generational trusts set up by George Steinbrenner years ago, which may be a deterrent. I suspect this will not be the last we hear of this.
Brian Cashman made an appearance on WFAN 660 earlier this afternoon and had a number of interesting things to say beyond the usual YankeeSpeak schtick. Let’s recap (with some help from our own Stephen Rhoads)…
- Eric Chavez will be placed on the DL and was actually still at the hospital as of the time of the interview. Jayson Nix is taking his place on the roster and Cashman says he can play the outfield if needed.
- “I believe he’s getting there … baby steps,” said Cashman about Phil Hughes, making it sound like his rotation spot is safe for at least another few weeks. “I think he throws a fantastic curve, I think he’s better than what he’s shown … We want to be patient and optimistic but we also want to reward performance.”
- Joba Chamberlain has already shed his walking boot and is recovering well from both Tommy John surgery and his dislocated ankle. There’s even a chance he may return this year, though I wouldn’t count on itl. “Definitely a possibility [he returns in 2012],” said the GM. “He’s got some sort of amazing recovery ability, he doesn’t feel pain … Definitely possible we’ll see Joba.”
- Brett Gardner will head out on a minor league rehab assignment before returning to the team. He was shut down with pain in his right elbow a few days ago, though Cashman didn’t specify a new timetable. With the scheduled day off on Monday, me thinks the earliest we’ll see Gardner is Tuesday.
In a separate radio interview, Cashman said Andy Pettitte will make his next minor league tune-up start with Triple-A Empire State this Sunday. That game is scheduled to be played in Batavia but apparently is in the process of being moved to Rochester. It that goes well, it’s entirely possible we’ll see Pettitte make his return to the Yankees next weekend against the Mariners.
Bill “Moose” Skowron, a mainstay of the great Yankee dynasty of the 1950s and long-time fan favorite at Old Timers’ Day, has passed away at the age of 81. Moose was a first baseman during the years of Mickey Mantle and was a five-time All Star with the Yankees and White Sox. He also won five World Series win the Yanks and Dodgers and is the only player to baseball history to homer for one team in the World Series and then homer against that team in the following year’s Fall Classic. He completed that feat in 1963 while with Los Angeles.
In 1087 games with the Yankees, Skowron hit .294/.346/.496 with 165 home runs. He always drew a rousing ovation during his myriad Old Timers’ Day games, and his baseball card from the mid-1950s that my dad had when I was a child remain one of my earliest memories of card collecting. He will be missed in the Bronx this year.
Alex Rodriguez‘s contract is the albatross that keeps on giving, with five years and $114M still to go after this season. To make matters worse, the deal also includes five homerun-based historical bonuses that could begin to rear their ugly heads as soon as this season. With the Yankees looking to tighten up the payroll in the coming years, we’ve been assuming those bonuses would create a headache at some point. That may not be the case, however. Courtesy of Jayson Stark…
Officials of both MLB and the union confirmed to Rumblings that baseball has now banned future personal-service deals and all milestone bonuses. Rob Manfred, MLB’s executive vice president for economics and league affairs, said both issues had become a growing concern. So once the offseason signing dust had cleared, owners and players agreed that it was time to step in and spread word that contracts containing those perks would no longer be approved.
So what’s the big deal, you ask? The closer you hone in on this, the more obvious it becomes why these arrangements raised eyebrows.
The “milestones” payouts, for instance, appear to violate baseball’s longtime ban on bonuses for virtually all statistical achievements. A-Rod‘s 2007 contract with the New York Yankees disguised his bonuses as “marketing” money. But “the more they looked at it,” said a source who was briefed on MLB’s thinking, “the more they realized what it was. … He was getting paid to achieve those milestones.”
Finally, there’s one objection the commissioner’s office would seem to have to both of those creative wrinkles: Because those payouts are not regarded as guaranteed money, teams potentially could use them to avoid luxury-tax bills. And why do we suspect Bud Selig just totally hates it when that happens?
Unless I’m misinterpreting Stark’s article, A-Rod’s homerun milestone bonuses will not count towards the luxury tax. Signing bonuses, awards bonuses, and playing time bonuses do count towards the tax, but apparently not milestone bonuses. Alex will get $6M each for his 660th, 714th, 755th, 762nd, and 763rd career homers. He’s at 631 career dingers right now.
Obviously, this is pretty significant news as far as the 2014 payroll plan is concerned. The Yankees are aiming to get under the $189M luxury tax threshold that season, and now they don’t have to worry about A-Rod reaching one (or more) of those milestones and eating up payroll space in a given year. That $189M was really $183M or even $177M because they had to leave some payroll space in case Alex earned some of his bonuses, but now it doesn’t matter. Again, it’s pretty significant and good news. Six million bucks may only be ~3% of the payroll, but it sure does buy on a big league roster.
With Opening Day just a few weeks away, Forbes released its annual MLB valuations today, and once again, the Yankees are the game’s top dogs. According to the business mag, the Yanks are worth a cool $1.85 billion, up nine percent over 2011. Interestingly enough, Forbes guesses that the club itself turns a profit of only around $10 million a year with the money generated through live TV programming. In other words, the dollars are in the TV rights.
“The Rolls-Royce of the RSN model is the New York Yankees, who own 34% of the YES Network,” Mike Ozanian wrote. “The Bronx Bombers are the most valuable team in baseball, worth $1.85 billion, tying them with the National Football League’s Dallas Cowboys for the top spot among American sports teams and placing them second in the world to Manchester United, the English soccer team worth $1.9 billion. YES generated a staggering $224 million in operating income and paid the Yankees a $90 million rights fee in 2011.”
For what it’s worth, only two teams — the Mets and Rays — saw their values decline from 2011 as legal woes for the former and attendance woes for the latter were the main drivers there. Meanwhile, it’s somewhat incongruous to hear how the Yanks are eying “austerity” budgets of only $189 million for 2014 and 2015, but that’s how baseball economics work these days. The Dodgers, currently undergoing a sale and with their TV rights up for renewal, will set the market, but if the Steinbrenner family ever wanted to sell, they could command a pretty penny for the crown jewel of Major League Baseball.
The concept of “face value” for a ticket to a baseball game is often an amorphous one. In our case, the Yankees price out their seats and sell tickets as part of a variety of packages at different place levels. Face value for one seat could be different for the face value of a seat in the same row or section by virtue of the associated season ticket package. By and large, though, face value as set by the Yanks is fairly constant.
Of course, as many fans recognize, face value isn’t the true value of the ticket. Baseball tickets are a finite resource, and only so many exist per game. If the tickets are priced at the right level and the team is good enough, the game will effectively sell out, and then the secondary market takes over. On the secondary market, people who buy tickets with an eye toward making a profit or those who can’t make it to the game are trying to find the true value of their seats.
Over the past few years, it’s been possible to buy many Yankee tickets at or even below face value on the secondary market. Demand isn’t high enough for all but the most sought-after games to warrant a high price, and discerning shoppers know that market value for a mid-week game against, say, the Royals or Orioles isn’t the same as a weekend affair against the Red Sox or Mets. Essentially, those of us who rely on the secondary market to feed our baseball needs have lived with dynamic pricing for years.
Despite innovation on the field, baseball teams have been slow to pick up on this dynamic pricing model. Some teams sell so-called premium games against good teams while others are content to price everything at the same level. That’s beginning to change though. As Kyle Stock wrote in The Daily this weekend, some baseball teams are set to embrace dynamic ticketing. The Brewers, for instance, will change prices on seats if it looks like Zack Greinke will face the Royals while the games in which he doesn’t pitch will see lower prices.
Stock reports on the way dynamic pricing came into being for baseball clubs:
In this case, the guy bucking the system was not a washed-up pro, but rather a 26-year-old fan finishing a Ph.D in economics at the University of Texas. In early 2009, Barry Kahn sneaked into a sports ticketing conference in Las Vegas. Armed with chutzpah and hand-cut business cards, he persuaded the San Francisco Giants to try dynamic pricing in about 2,000 of its worst bleacher seats.
“Basically, we saw that there was a huge price inefficiency here,” Kahn said. “Everyone was saying ‘StubHub is making all this money. How do I get a piece of that?’ My message was: ‘It’s your inventory. You have the ability to get the whole thing.’ ”
By the end of the 2009 season, San Francisco had a 20 percent attendance increase in its test seats and an extra $500,000 in ticket revenue. Three seasons later, Kahn is CEO of Qcue Inc., a profitable Texas-based company that will help 15 baseball teams set their prices this year.
As Stock notes, teams were hesitant to embrace this idea over fears of turning off fans. Some view it as institutional price gouging without realizing that it’s a lesson in Economics 101. Others are more willing to embrace it as it offers up a cheaper way to see more games at the expense of higher prices for the more generally desirable contests.
Here in New York, the Yankees haven’t yet embraced dynamic pricing. It may be slow in coming as the club would have to admit that their pricing models at the expensive new stadium haven’t been as rousing a success as they should have been. But they’ll get here. It’s unavoidable, and it’s a way for the team to tap into more revenue streams. After all, a cheaper ticket could lead to more people would should lead to more concession stands. The money somehow trickles up and into the Yanks’ pocket. For now, though, it’s the next great innovation in the business of baseball and one that should have made its debut years ago.
Five years ago, Steve Swindal was the heir apparent to the Yankees. The husband of Jennifer Steinbrenner and a general partner of the team since 1998, Swindal had been appointed George Steinbrenner‘s successor back in 2005. That plan changed in early-2007, when he was arrested for DUI and Jennifer filed for divorce a month later. The team bought out his ownership stake that November, and The Boss instead handed the reigns to his son Hal.
After his time with the Yankees ended, Swindal served as the head of a marine towing company in Florida for a while. He’s now back in baseball though, having launched a youth academy in the Dominican Republic with Abel Guerra (the Yanks’ former VP of International Ops) and Hans Hertell (former U.S. ambassador to the D.R.) in 2009 according CBS New York. They house, feed, train, and educate young prospects in exchange for a portion of their future signing bonuses. More than 40 prospects have gone on to sign with a big league club after a stint at Swindal’s academy. “[It's] the nicest academy of any agent,” said Rafael Perez, MLB’s director of Dominican operations. “And they produce a lot of players.”
Swindal’s son still works for the team in stadium operations (in the Bronx), and his daughter Haley sings the national anthem before games a few times a year. There doesn’t appear to be any animosity on either side, and in fact Swindal was at the club’s Spring Training complex last weekend. “I’m always going be pulling for the Yankees,” he said. “That’s never going to go away.”
As Ben wrote soon after the DUI and divorce, Swindal was seen as the perfect heir to Steinbrenner’s throne back then. “Swindal was everything that George was and more,” he wrote. “He exhibited the same win-at-all-monetary-costs attitude that Yankee fans have come to crave, but he also exhibited a whole lot of Baseball Smarts. He knew the value of constructing a Major League team through sound investment and an organization that could develop a steady stream of home-grown players to complement the free agent signings.”
That all sounds well and good, but we’ll never know how the course of Yankees history would have changed had Swindal taken over the team as planned rather than Hal. Perhaps all this talk of getting under the luxury tax threshold in 2014 would not exist, or perhaps the reduced payroll would have happened years ago. It’s hard to complain about the team right now, but there’s still that what-if element. “It’s a strange turn,” said Swindal to CBSNY. “Life is going to be full of turns and changes. It’s how you deal with it that’s important. I had the best ten years of my life with the Yankees, of my professional life. I don’t regret a minute of it.”