Over the past few weeks, those who follow the Yankees — from the beat writers to the bloggers and everyone in between — has grown concerned with the team’s dollars. From the perspective of a well-run organization, the Yankees are bleeding cash. They’re spending millions on A-Rod for far too many years; they are doling out checks to A.J. Burnett that his pitching can’t cash. They’re going to re-up with Derek Jeter for many millions more than he would get on the open market, and they seemingly want Cliff Lee as this winter’s shiny new toy.
It doesn’t take an economist to understand that the dollars behind these deals are tremendous, but we can see in all of its Spreadsheet-y goodness just how many bucks the Yankees have committed already. Via Cots, we learn that prior to this winter’s anticipated spending spree, the Yankees already have $107 million on the books for 2012, $94 million in 2013 and $73 million in 2014, the season after the free agencies of Joba Chamberlain and Phil Hughes. The Yankees may have a budget, but don’t expect that number to shrink below its current $213 million level any time soon.
But the real question is the one with which I opened this post: Should we be concerned? If we were looking for the next Moneyball, the next financially-constrained team to exploit an inefficient market, we might be worried that the Yankees aren’t fulfilling that criteria. We aren’t, however, engaged in that chase. Instead, we root for the Yankees and accept them for what they are: a financial behemoth that has the spending power and market ability to tower over the baseball landscape. What good is playing in New York City if you can’t take advantage of the fact that you’re playing in New York City?
Apparently, though, a few folks are worried. In the wake of the release of the MLB financial documents, some Yankee writers decided that, in light of Derek Jeter’s and Mariano Rivera‘s contract extension and Andy Pettitte‘s willingness to go year-to-year, Cliff Lee would not be a good investment. The Yankees might have — GASP — a $240 million payroll in order to compensate for the fact that their long-term aging players aren’t living up to their peak numbers.
Yet, the idea that the Yankees would raise their payroll by 10 percent over the next few years is hardly a revolutionary one. In fact, the Bombers’ payroll has risen by over 10 percent since 2007 and by nearly 100 percent since 2000. If I didn’t know any better, I’d almost believe the Yankees are printing money at will behind the marble of their new stadium in the Bronx.
In fact, that’s what Phil Birnbaum at Sabermetric Research says the Yankees are doing. Even though the Yankees claim they’re running a barely profitable business, Birnbaum delves into the figures publicly available and posits that, by delving up the business and selling off certain aspects of Yankee Baseball — including the TV rights — the Steinbrenner family is running a highly profitable venture, and the millions that reap can either be reinvested into the team or taken as a dividend outside of the revenue sharing scheme baseball has in place. If the Steinbrenners want to put a team getting paid $240 million onto the field, the only thing stopping them would probably be pressure from Major League Baseball.
So maybe all of this hand-wringing over Derek Jeter’s worth, value and contract prospects are for naught. Maybe the Steinbrenners don’t really care that they’re saying they’ll “take care” of Jeter because it’s small beans compared to the overall revenue picture. They can still provide for Jeter, sign Cliff Lee and perhaps even put together a decently-stocked benched next year. It is, after all, only money.