Via Joel Sherman and David Waldstein, Brian Cashman and Hal Steinbrenner met in New York yesterday, though they talked mostly about baseball and the team’s baseball operations. That’s a pretty good indication that the two sides expect a new contract for the GM to be reached with ease. Cashman’s contract expires next Monday, so we should hear something very soon. I figure it’ll be another three-year deal, Cashman’s fourth in a row.
Via Joel Sherman, Brian Cashman and Hal Steinbrenner are scheduled to meet sometime next week to hammer out the GMs new contract. Last week we heard that talks were going well, but it looks like they’re getting ready to shake hands and sign on the dotted line. The World Series will end exactly two weeks from today, assuming it goes the full seven games, and CC Sabathia will be able to opt out of his contract three days after that. That’s when the offseason really starts for Cashman and the Yanks.
Hal Steinbrenner, the Yankees’ Managing General Partner and co-chairman, took to the airwaves this afternoon and spent around 20 minutes chatting with Michael Kay and then Mike Francesa on New York’s two sports talk radio stations. While keeping the Yanks’ offseason plans close to the vest, Steinbrenner let slip a few choice words on the playoff scheduling, Chuck Greenberg’s recent comments, the clubs’ payroll and the Yanks’ willingness to dip into the free agency pool.
We’ll start with the sexy stuff. Hal opened both interviews with his assessment of the team’s performance in the playoffs. Both times, he blamed the days off in between the end of the ALDS and the start of the ALCS. “We seemed a little bit cold in that series,” Hal said of the ALCS. “I don’t know if it was the long layoff or not.” I’ll have more on the playoff format and the unnecessary days off later tonight, but the Yanks never seemed to click during the ALCS. Having to stop play for six days probably didn’t help.
As a side note, Hal also called the 2010 season “very disappointing.” I don’t find myself too disappointed by a six-game ALCS series even though the Yanks lost. Counting the playoffs, they won 101 games this year, tops among AL teams and just one fewer than the World Series champion Giants. It was disappointing to see them go down against Texas, but this was a fun season.
The Yanks’ co-owner shifted gears after that to talk about Derek Jeter and Mariano Rivera. “We absolutely want [Jeter] back. We absolutely want Mo back,” he said. Having said that, we’re running a business.” In fact, that’s a point Hal stressed in both radio appearances. The Yanks are a business and with Derek, the Steinbrenners want “a deal both sides are happy with.”
Hal seemed less nostalgic and sympathetic to the idea that Jeter deserves a huge contract than either Kay or Francesa wanted him to be. While noting that Derek is one of the all-time Yankee greats, he warned Kay, “There’s always the possibility that things could get messy.” To Francesa, he elaborated, “I want to get a deal done that he’s happy with but also that I’m happy with.”
In addition to resigning their own players, the Yankees will be active in the free agent market. Without naming specifics, Hal committed to spending the organization’s money. “We are looking at the free agent market as we do every year,” he said. “We certainly have money to spend and we’re going to look into it.” The team’s payroll, Hal said, will likely be on par with 2010’s though. So we shouldn’t expect too many big-ticket purchases if the team adheres to that budget.
Steinbrenner also stressed the team’s strategy. The use the free agent market to complement their youth movement, but they’re always going to spend money. “The fans need to know we’re not putting money in our pockets left and right,” he said. “We put most or all of it back into” the team. He also mentioned that the Legends Suites were sold at rates above 90 percent this year and that the franchise may adjust some ticket prices for 2011.
Finally, Hal talked about Chuck Greenberg’s comments. The Rangers CEO accused Yankee fans of being both violent and apathetic, and the Bombers were prepared to retaliate. These were “inappropriate, ridiculous comments,” Hal said. While the club accepted Greenberg’s apology, Hal was fairly merciless. “Stupid comments…they were inappropriate, “he said. “You need to apologize to our fans.”
At the end of both interviews, Hal said it was there intentions to build up the 2011 Yankees a “World Series-type team.” Whether it be via trade, free agency or both, the Yanks have a busy Hot Stove League ahead of them.
Despite already having the best record in baseball and a budget (albeit flexible) at its limit, the Yankees owned the trade deadline in a way that would make George Steinbrenner proud. They got big names in Lance Berkman and Kerry Wood because they were willing to take on salary and not let money get in the way of improving the team. They also did this without sacrificing any major pieces for their future. There was no trading Jay Buhner for Ken Phelps, just signing the checks that other franchises were unwilling to write.
In fact, the Red Sox were in on Wood as well, but wouldn’t take on as much salary. The Sox wouldn’t take on the $1.5 million the Yankees were willing to pay to get Wood (Beware, that link is for John Tomase who’s not the most credible of writers). So the Red Sox, who by inquiring on Wood think they are still in the race (and they are) let a few hundred thousand dollars get in the way of obtaining him. Much like the Alex Rodriguez and Mark Teixeira pursuits, the Red Sox had their chance and came up short when it came time to open the wallet (I guess they should have sold a few more memberships to Red Sox Nation). Can you imagine how thrilled George would be to know this?
While the Astros did pick up a significant portion of Berkman’s salary, the Yankees still needed to commit to paying Berkman, having a down year, $3.1 million for 2 months of regular season work plus hopefully the playoffs. Considering they have already committed $5.5 million to the DH position in Nick Johnson and we’re in a recession, this was not a tiny pill to swallow. While upgrading the DH position in a big way was more of a want than a need, they saw an opportunity to strike with the biggest cost being money. Again they went for it, and again, the Boss would be proud.
There were concerns after Steinbrenner’s passing that Hal would run the team more as a business and less as a fan leading the Yankees to cut back on spending going forward. So far so good however, as the decision makers decided the increased payroll was worth the increased chances of winning it all. Did the Yankees, as constructed on July 29th, have a chance to win the World Series? Of course they did. Do the Yankees, on August 1st have a better chance of winning the World Series? Of course they do. Not only did the Yankees step up to the plate and take their shot, but for the most part their main competitors didn’t as the Red Sox and Rays didn’t wow anyone with their deadline moves. Give credit to the guys signing the checks this year and know that what they pulled off the past few days would make the old man proud.
George Steinbrenner always had impeccable timing. He knew when to hire and fire managers in such a way that would generate the most publicity for the Yankees. He knew which free agents his team should have; he knew when his incendiary statements would garner the most outrageous coverage on New York’s back pages. And whether he realized it or not, he knew when to die.
As callous as that sounds, George Steinbrenner’s death could not have come during a better year for the Yankees than in 2010 for this is the year the estate tax has lapsed. Prior to 2010, those with estates of over $3.5 million were taxed at a rate of 45 percent. After 2010, those with estates over $1 million will be taxed at a rate of 55 percent. This year, though, Congress allowed the estate tax to go uncollected, and although some Senators wish to restore the tax retroactively to January 1, for now the Yankees are off the hook.
For the post-George Era, it’s hard to understate the impact this good luck has on the Yankees. Estimates from Forbes Magazine pegged Steinbrenner’s worth at over $1 billion, and the Yankee heirs would have had to liquidate some of his holdings to raise the money for a $450-$500 million government bill. Despite the value of the Yankees, the family apparently doesn’t have that much cash on hand, and the Steinbrenners may have had to sell a large chunk of the team to do so.
The point though is moot. As Forbes’ William Barrett wrote, the family has spent a lot of lately working to avoid that reality. The team is controlled by a variety of holding companies of which the various Steinbrenner children are the controlling shareholders. Major League Baseball officially recognized Hank and Hal Steinbrenner as the team’s day-to-day operations heads in 2008, a move made to protect the family’s control over the club. The family, says the Associated Press, wants to avoid falling into the same trap that plagued the Wrigley’s when then-Cubs owner P.K. Wrigley died in 1977.
But questions surrounding club ownership remain. Do the Steinbrenners want to cash in on their billion-dollar gem? Do the sons want to be as involved as the father was? So far, the family has given every indication that they will not be selling the Yankees, as Joel Sherman wrote on Friday. The Post scribe, well-connected in the upper echelons of the Yankee Front Office, offers up this revealing take about life after George initially stepped down:
Hank Steinbrenner — think a combination of hot-headed Sonny and underwhelming Fredo — briefly oversaw baseball operations after the 2007 season. He quickly burned out, not fully understanding the time and scrutiny that came with the job, especially if you were going to try to be Boss Jr. with loud proclamations.
Hal stepped into the breach, though it felt more out of responsibility to the family business than love for the job. So there was an assumption that whenever George died, so to would the Steinbrenner obligation to owning the franchise. It was not hard to imagine a frenzy of the super-rich bidding to buy the Yankees after George’s death.
Reserved and protective of his privacy, Hal projected the wrong fit for the job. Except Hal did a funny thing: He changed the way the Yankees Boss operates. Over the past few years, he learned he actually could run the Yankees under the radar. He has managed leadership without bluster or much inspection of his private life. He rarely speaks in public, offering almost none of the state of the Yankees messages that his father could deliver multiple times a day, especially in bad times. Does Hal burn to run the Yankees like his father? No. However, he has learned to like this job, and — as it turns out — the Yankees are in the Steinbrenner family blood now; George’s four children all having grown up in pinstripes.
Randy Levine, current team president, succinctly summed up the family’s thinking. “They have no plans to sell. There are no succession issues,” he said to Sherman.
Hal is, as Sherman puts it, the “cautious” version of George Steinbrenner. Whereas George’s brashness made baseball popular and rich off the field, Hal plans to own the game on the field. He’s a quiet and collected individual who knows when to delegate and knows when to step in. He’s willing to support a high-payroll team and understands that victories equals dollars in the world where Yankees and the YES Network dominate New York.
In one of the better business columns written about the Yankees post-George, Joe Nocera of The Times explains how George got lucky. The Yankees became so valuable because of their preeminent place in the country’s number one media market and because they started winning at the right time in the nation’s economic path. George happened to be the guy holding the reins, and although he made a lot of good decisions, he made some bad ones too. He didn’t sell when the chance arrived, and good fortune smiled down upon him. In a smaller market — had he bought the Indians as he so desired — George Steinbrenner might just be another irascible owner lost to the pages of baseball business history.
With a history of sports ownership in tow, the next generation of Steinbrenners will look to build on their wealth through wise investments. Luck always plays a part of the capitalist market, but so too does diversifying and smart management. According to one British tabloid, the family may bid £450 million on the Totteham Hotspurs with Hank taking his turn atop that Premier League team. Baseball owners have a mixed track record within the EPL, but it’s a start. The club reportedly has no interest in buying into the NFL, NBA or NHL.
For now, fans should see nothing new. The Steinbrenner family will invest and try to win those championships. The looming axe won’t be there to fall, but the pressures of a high payroll will remain. It is, after all, always beneficial to be in the business of winning. That’s what George was, and that is what his children should be.
When Hank and Hal Steinbrenner took over control of the Yanks from their ailing father George, many fans feared the the family would try to cash in on their billion-dollar asset. Although Yankee fans knew the destructive tendencies wrought by King George during his team, they also came to love George’s singular focus on winning and knew that any other potential ownership group brought with it fears of a heavy hand and bad baseball minds.
Today, multiple New York media outlets confirm what we were dreading: The Steinbrenners are in talks with the Dolan family concerning the Yanks. Although neither side would confirm the talks, a source close to the Yanks said that a deal could be reached before the All Star Break. At that point, the other owners would have to vote to approve the deal.
“Ever since Hal and Hank were appointed co-chairs of the team,” the source said, “the family has been pressuring them to sale. With the Knicks and Rangers in their pockets, the Dolans seemed to be a logical choice, and James has been chomping at the bit to run a baseball team.”
Early reports indicate that the Dolans will pay upwards of $1 billion for a controlling share of the team and the final price could top $1.2 billion. Yankee Global Enterprises, the holding company controlled by the Steinbrenners that owns both the Yankees and YES Network, will hold onto the TV station for now. Considering that George paid $10 million to buy the Yankees in 1973, the family is certainly turning a pretty penny from their 36 years of ownership.
This isn’t the first time that the Dolans, owners of the lucrative Cablevision empire, have expressed interest in buying the Yankees. In late 1998, Steinbrenner and the Dolans were rumored to be close to a sale of the team. George would have gotten $600 million while retaining control over the Yankees, but the deal fell through in March of 1999 over George’s continued involvement with the Yanks. Ownership, it seems, won by winning since that sale didn’t happen.
As the Steinbrenners get rich, though, the franchise and its fans are in for a bumpy ride full of uncertainty. James Dolan, the chair of both Cablevision and Madison Square Garden, has developed a reputation as a hands-on owner who isn’t very good at installing top player managers. On his watch, the Rangers missed the playoffs every year from 1998-2005 despite leading the NHL in payroll. They still aren’t a legitimate threat in the Eastern Conference.
The Knicks, meanwhile, have been a walking disaster since the early 2000s. They haven’t finished a season above .500 in nearly a decade and haven’t won a playoff game since the 1990s. On Dolan’s watch, they suffered through the Isiah Thomas Era and spent millions on just one season of Larry Brown. The team has overpaid for overrated and old players, and Dolan was rated one of the worst owners in the league by Sports Illustrated.
Maybe this will work out for the best. Maybe the Yankees have too many good baseball minds in charge for the Dolans to ruin things. Maybe Cablevision will take a hands-off approach for its $1 billion investment. I can’t help but think though that we’ll miss the Steinbrenners more than we realize. [Read more…]
In what has become something of a Yankee Spring Training rite of passage these days, Hall Steinbrenner met with manager Joe Girardi yesterday, and the meeting was a very quite and cordial one. As Bryan Hoch reports, Hal didn’t stop to say much to the media and simply stopped by to talk to his manager. Then, he left. “When Hal comes down, the conversations are very meaningful. They’re right to the point and we talk a lot of baseball. It’s great,” Girardi said. “I feel like we’re always on the same page. He’s very open. The conversations are usually very constructive.”
The media still picks up these stories because, even though George has been out of the picture for a while now, it’s such a radical change from the way the Yanks operated from the early 1970s through the mid-2000s. Hal lets his baseball people run baseball ops and his business people run the business side of the franchise. He doesn’t overstep his bounds, and his employees don’t manage or play with the threat of the Boss looming over them. It is no coincidence that the team has improved as George has ceded power. The Yankee U, meanwhile, today pondered whether or not the Steinbrenner family would sell the team after George passes and if it would matter — interesting questions, indeed.