Friday Links: Top 100 Prospects, Mock Draft, Jeter, Luxury Tax

Montgomery. (Jonathan Daniel/Getty)
Montgomery. (Jonathan Daniel/Getty)

The Yankees and Astros continue their four-game weekend series with the second game later tonight. Here are a couple of strays links to check out in the meantime.

Six Yankees on BA’s latest top 100 list

The Baseball America crew released an updated top 100 prospects list this week, which is designed to “reflect the graduations of players who are no longer prospect-eligible and to tweak the rankings based on feedback we have received from scouts and coaches who have seen the prospects this year.” White Sox IF Yoan Moncada is atop the list. Six Yankees farmhands made the top 100:

2. SS Gleyber Torres (Preseason: 5th)
33. OF Clint Frazier (Preseason: 39th)
37. OF Blake Rutherford  (Preseason: 45th)
85. LHP Justus Sheffield (Preseason: 91st)
99. LHP Jordan Montgomery (Preseason: Not ranked)
100. RHP Chance Adams (Preseason: Not ranked)

OF Aaron Judge ranked 90th before the season and has since graduated to the big leagues. SS Jorge Mateo (85th) and RHP James Kaprielian (87th) both made the preseason list but have since dropped off. In a supplemental piece (sub. req’d), the Baseball America crew says Mateo fell out of the top 100 because he simply isn’t performing. He’s hitting .220/.270/.315 (67 wRC+) while repeating High-A ball. Kaprielian fell off because he blew out his elbow and needed Tommy John surgery. Duh.

I can’t say I ever expected to see Montgomery crack a top 100 prospects list, so it’s pretty cool he was able to sneak on. He’s walked a few too many in his brief big league time (11.7%), which is not uncommon for young pitchers. Otherwise Montgomery appears to have all the ingredients necessary to be a back-end starter long-term. Those guys are really valuable during their cheap pre-arbitration years. Montgomery has thrown 28.2 MLB innings so far, so he’s about four starts away from clearing the 50-inning rookie limit and graduating to MLB. This will probably be the only top 100 list he makes. I’m guessing he’s fine with that.

Keith Law’s mock draft v1.0

Keith Law (subs. req’d) released his first mock draft of the year earlier this week, and he has the Twins taking Louisville 1B/LHP Brendan McKay with the No. 1 pick. California HS SS/RHP Hunter Greene, the consensus top prospect in the 2017 draft class, is expected to slip to the Reds with the second overall pick. Lucky them. Law has the Yankees taking California HS 1B Nick Pratto with their first round pick, No. 16 overall. From Law:

Pratto seems to have separated himself as the best pure hitter among the high school crop this year, though high school first basemen taken high don’t have the greatest track record either.

Here’s my Pratto write-up. On paper, Pratto fits the Yankees. Scouting director Damon Oppenheimer has a known affinity for Southern California players, and the Yankees also have a thing for advanced high school bats. They pounced when Rutherford fell into their laps last year. Back in the day, before the bonus pools took the fun out of everything, they paid Greg Bird and Tyler Austin overslot bonuses when their polished bats slipped into the later rounds. The 2017 draft is a little more than five weeks away now.

Loria tried to trade for Jeter with Expos

Jeet & Vlad. (Nick Laham/Getty)
Jeet & Vlad. (Nick Laham/Getty)

Here’s a fun old trade rumor. According to Steven Marcus, Jeffrey Loria ordered general manager Jim Beattie to call the Yankees and make a trade offer for Derek Jeter back in 1999, when Loria owned the Expos. The offer: Vladimir Guerrero for Jeter. Fun! Here’s more from Marcus:

“Mr. Loria really wanted Jeter,’’ said Beattie, a former Yankees pitcher who now is a scout for the Blue Jays. “I kept telling him it wasn’t going to happen and he said, ‘Well, you have to make the call.’ I called (Brian Cashman) and at a point I said, ‘Jeffrey is really interested in Jeter.’ Cash said, ‘No, we’re not going to trade.’ I said, ‘I understand that. Just for conversation and I’m not even sure we would do this, would you trade him for Guerrero?’

“There was silence on the other end. He said, ‘Would you do that?’

“Cash said, ‘That’s a crazy offer, but I’m just not going to trade him. He is a franchise player for us and we’re not going to trade him.’ You could try to trade for him, but they weren’t going to trade him. Yeah, there was an effort.’’

This happened during the 1999-2000 offseason. Jeter, then 25, hit .349/.438/.552 (156 wRC+) with 24 home runs in 1999, in what very well might have been the best season of his career. Vlad was about to turn 25, and he’d hit .316/.378/.600 (139 wRC+) with 42 homers in 1999. This would have been the mother of all blockbusters. Young superstar for young superstar. Carlos Correa for Mookie Betts. Corey Seager for Kris Bryant. Something like that.

Jeter is a no-doubt Hall of Famer and chances are Vlad will get in at some point as well — he fell 15 votes short of induction this past winter — though you can understand why the Yankees said no. They’d just won their third World Series title in the past four years, and Jeter was the face of the franchise. Also, shortstops like Jeter are harder to find than corner outfielders like Guerrero. Still, fun! Loria is a native New Yorker who has made it no secret he admires the Yankees. It’s no surprise he tried to acquire their franchise player once upon a time.

Yankees projected to cut luxury tax bill

According to Ronald Blum, the Yankees are projected to cut their luxury tax bill by nearly $20M this season. Calculations from the commissioner’s office put the team’s luxury tax bill at roughly $9M right now, down from the $27.4M they paid last year. The Yankees are taxed at the maximum 50% rate, so that combined with the $195M threshold suggests their payroll for luxury tax purposes is $213M right now.

Keep in mind the luxury tax payroll is subject to change based on call-ups and send downs, as well as any midseason trades. The Yankees could very well end up buying at the deadline, which would increase payroll. And heck, they could also end up selling again should they fall out of the race. Masahiro Tanaka and Dellin Betances would be their top trade chips, and dealing them would save more luxury tax. The team’s goal is, of course, to get under $197M luxury tax threshold next year, once the monster Alex Rodriguez and CC Sabathia (and Tanaka?) contracts are off the books.

Wednesday Notes: Minor League Rosters, Payroll, Betances

Andujar. (Presswire)
Andujar. (Presswire)

The Yankees will wrap up their first series of the season later today, then enjoy yet another off-day tomorrow. Two off-days in a series at a domed ballpark. Not the best move by the schedule makers. Anyway, here are some bits of news and notes to check out.

Minor league rosters announced

The minor league regular season begins tomorrow and, over the last few days, the Yankees’ full season affiliates have started releasing their Opening Day rosters. The farm system is loaded, so the rosters are pretty exciting. Here are links to the rosters and the top 30 prospects at each level:

There’s always one roster holdout and that is High-A Tampa this year. They haven’t announced their roster yet. We can figure out which top 30 prospects are likely to be on the roster through the process of elimination though: RHP Domingo Acevedo, LHP Ian Clarkin, SS Kyle Holder, RHP James Kaprielian, SS/OF Jorge Mateo, LHP Josh Rogers, and RHP Dillon Tate. That’s a hell of a rotation.

3B Dermis Garcia is not on the Charleston roster and will instead start the season back in Extended Spring Training. Even without him, the RiverDogs are stacked. Non-top 30 prospects like IF Oswaldo Cabrera, SS Diego Castillo, OF Isiah Gilliam, RHP Nick Green, RHP Nick Nelson, RHP Freicer Perez, and C Donny Sands are all on the roster and worth knowing. Cabrera, Castillo, Nelson, Perez, and especially Sands could be top 30 prospects next year.

I should note that while Montgomery and Green are on the Triple-A and Double-A rosters, respectively, both will pitch for High-A Tampa tomorrow. The weather in the Northeast isn’t looking too good and the Yankees want to make sure those two get their work in and stay lined up for the fifth starter’s spot.

Yankees rank third in Opening Day payroll

According to the Ronald Blum, the Yankees opened the 2017 season with a $195M payroll, third highest in MLB. That’s down from $225M last year. The Dodgers (duh) rank first in payroll this year at $225M while the Tigers are second at $199.75M. This is the first time since 1993 that the Yankees are not among the top two teams in Opening Day payroll. Been a while, huh?

Keep in mind this payroll number reflects the Opening Day active roster and disabled list only, so the Yankees aren’t getting dinged for the $21M they have to pay Alex Rodriguez this season. Or the $5.5M they’re paying Brian McCann. Their payroll for luxury tax purposes is much higher. The Yankees are looking to get under the luxury tax threshold soon and the 2018 season will be their best chance to do it. A-Rod and CC Sabathia will be off the books, possibly Masahiro Tanaka as well.

Yankees, Betances discussed two-year deal

Dellin and Larry Rothschild. (Presswire)
Dellin and Larry Rothschild. (Presswire)

At some point prior to their arbitration hearing, the Yankees and Dellin Betances briefly discussed a two-year contract, reports Jon Heyman. We heard the two sides talked about a multiyear deal a few weeks ago, though now we know the term. It was a two-year deal, not a longer contract that would have bought out free agent years. The Yankees beat Betances in arbitration and will pay him $3M this season, not the $5M he was seeking.

Betances, 29, will not be eligible for free agency until after the 2019 season. A two-year contract would have given him a nice little guaranteed payday and the team cost certainty over his next two seasons. These two-year “bridge” deals that buy out arbitration years but not free agent years are becoming quite popular around baseball. Nolan Arenado, Josh Donaldson, A.J. Pollock, Eric Hosmer, Todd Frazier, and Bryce Harper are among those who have signed one within the last few years. As good as Betances is, I’m totally cool with going year-to-year given his history of command issues.

Tiebreaker rules officially added in low minors

The extra inning tiebreaker rules have officially been approved for the low minors, according to Josh Norris. Extra innings in the rookie level Gulf Coast League, Arizona League, and Dominican Summer League will begin with a runner on second base. (The Yankees have affiliates in the GCL and DSL.) The rules will be in effect for the regular season only. Not the postseason. Also, the automatic intentional walk rule has been implemented at every level of the minors.

The extra inning tiebreaker rules were used during the World Baseball Classic and my gosh, they were terrible. Thankfully commissioner Rob Manfred said they are not being considered for MLB. They’re using the tiebreaker rules in the low minors to avoid overworking young pitchers, which is totally cool with me. Those games don’t mean anything — the crowds are basically friends and family at that level, so it’s not like there are many paying customers in attendance — and protecting the young players is the smart move. I’m guessing it’ll be only a matter of time until the tiebreaker rules make their way to other levels of the minors.

Getting under the luxury tax threshold in 2017 is possible, but very unlikely for the Yankees

(Jim McIsaac/Getty)
(Jim McIsaac/Getty)

At some point soon very soon the Yankees will get under the luxury tax threshold. That’s the plan. The new Collective Bargaining Agreement raised the threshold a bit, which gives the team more breathing room. Getting under the threshold resets New York’s tax rate, and depending on the terms of the new CBA, it could entitle them to some revenue sharing rebates too. Those were included in the last CBA.

The Yankees shed some notable contracts following 2016, most notably Mark Teixeira‘s. Carlos Beltran‘s contract disappeared at the trade deadline, as did Andrew Miller‘s. Miller is signed for another two years. Beltran was an impending free agent who would have come off the books anyway. The recent Brian McCann trade freed up some cash too, and next year CC Sabathia and Alex Rodriguez will be gone as well.

Because the luxury tax threshold is such an important number now, let’s look over the Yankees’ current payroll situation to see exactly how far away they are from the $195M threshold in 2017. Is there a chance they could get under as soon as next season? Sure, it’s possible, I guess. The numbers suggest it’s very unlikely, however. Let’s break it all down.

Guaranteed Contracts

Keep in mind the luxury tax payroll and actual payroll are different things. The actual payroll is what the Yankees truly owes these guys. The luxury tax payroll is based on the average annual value of contracts, which can be different than the player’s actual salary in any given year. Teams can’t manipulate the luxury tax payroll by front or back-loading contracts. Here are the luxury tax “hits” the Yankees have the books at the moment.

That all works out to $139.57M against the luxury tax payroll for only nine players. Gardner and Headley have been mentioned in trade rumors this winter — interest in the two is said to be “relatively mild at the moment,” though something could always come together quick — and trading either guy would clear up some cash, even if the Yankees eat money to facilitate a trade, as they did with McCann and Beltran.

So anyway, since Gardner and Headley are still on the roster, we have to count them against next year’s projected payroll. We’re at $139.57M for nine players. There is still more than 75% of the 40-man roster left to be filled, and the Yankees are already less than $56M away from the $195M luxury tax threshold for 2017.

Arbitration Projections

Right now, the only salary figures we have for arbitration-eligible players are projections. Those guys usually don’t starting signing contracts until after the holidays. Matt Swartz at MLBTR has a really great projection model, but it’s not 100% accurate, so there is some wiggle room here. Here’s what Swartz’s model spit out for the seven arbitration-eligible Yankees.

I really do think Swartz’s model is selling Betances short. Saves pay through arbitration and he doesn’t have many of them, but he’s been so insanely good at everything else these last three years that I think he’ll get paid like a closer in arbitration. Perhaps something closer to $4M, which is what guys like Cody Allen and Jeurys Familia and Hector Rondon received in their first trip through arbitration last year, could be in the cards.

Let’s stick with Swartz’s projection for Betances though. The seven arbitration-eligible players come in at $22.1M, and since these are all one-year contracts, we don’t have to worry about any fancy average annual value math. Between guaranteed contracts and arbitration-eligible players, we’re at $161.67M for 16 roster spots. Roughly $33M away from the threshold with 24 40-man roster spots to go.

Miscellany

The guaranteed contracts and arbitration-eligible players are easy. Now we’re getting into all the other smaller expenses that count against the luxury tax payroll, which always seem to cost more than people may realize. Here are the team’s miscellaneous expenditures for next season:

  • Dead Money ($33M): Alex Rodriguez ($27.5M) and Brian McCann ($5.5M)
  • Remaining 25-Man Roster Spots ($4.815M): Nine at $535,000 league minimum.
  • Remaining 40-Man Roster Spots: Estimated at $2M total.
  • Benefits: Estimated at $12M.

A-Rod and McCann are gone but their impact on the luxury tax payroll is not. Rodriguez was released, and for payroll purposes, it’s like he’s still on the roster. The Yankees are still responsible for his $21M actual salary and $27.5M luxury tax hit in 2017. The team is also paying $5.5M of McCann’s $17M salary the next two years.

The guaranteed contracts and arbitration-eligible players account for 16 of the 25 active roster spots. Assuming the Yankees fill the other nine with kids making the league minimum, it works out to another $4.815M. Here’s the thing though: all those kids won’t make the league minimum. The guys who picked up service time this past season, like Gary Sanchez and Aaron Judge and Luis Severino, will make a little more. Most teams, including the Yankees, have a sliding pay scale based on service time.

(Betances actually refused to sign his 2016 contract because he felt he deserved more than the team’s sliding service time scale, so the Yankees renewed him at the league minimum. That rarely happens though, and if the Yankees renew all their players at the minimum to create more payroll flexibility, it would also create a lot of bad blood. The easiest way to turn players against you is by screwing with their salary.)

Anyway, we’re going to stick with that $4.815M figure for the other nine roster spots for the time being. The other 15 40-man roster spots, the guys who are in the minors, also count against the payroll. They all have split contracts though — one salary in the big leagues, another in the minors. I’ve seen those other 15 spots estimated at anywhere from $2M to $5M over the years. I’ll go with $2M for the time.

Okay, so after all of that, our hypothetical 40-man roster is full and accounted for. Add it all together and the Yankees are at $202.2M. Argh! Over the threshold! But wait! It gets worse. Each team’s contribution to player benefits counts against the luxury payroll. Womp womp. That figure was $12M two years ago. I have no idea what it is now, but chances are it’s gone up at least somewhat.

Even if the benefits package is still valued at $12M, the Yankees are over the luxury tax threshold at $214.2M. And that’s assuming a) nine dudes on the 25-man roster are making exactly the league minimum, b) the other 15 guys on the 40-man are making only $2M total, and c) the Yankees make no in-season moves. Every call-up from Triple-A adds to the luxury tax payroll. In reality, the team’s payroll for luxury tax purposes is higher than that $214.2M number.

* * *

Based on everything that’s been reported this offseason, the Yankees are trying to unload Gardner and Headley in trades, which would free up cash. Dumping both would clear $24.72M in luxury tax hits, which gets them under the threshold with very little breathing room. Not enough to account for the fact players will be called up during the season and most of those nine league minimum guys will actually make something slightly more than the league minimum.

The chances of the Yankees getting under the luxury tax threshold next season were very small as it was. The Chapman deal effective ends any chance of it happening. Barring a Gardner trade, the Yankees are likely to open the 2017 season with a payroll in the $220M range, which is right where they’ve been the last two years. Next season, when Sabathia and A-Rod and Holliday and Clippard are gone, the Yankees should finally be able to get under the threshold, reset their tax rate, and create the payroll flexibility ownership so clearly desires.

Thursday Links: Severino, Wearable Technology, Payroll

Sevy. (Presswire)
Sevy. (Presswire)

The Yankees and Blue Jays wrap up their three-game series with the rubber game in Toronto tonight. After that, the Yankees return home for a nine-game homestand against the Mariners, Athletics, and Rays. They’re seeing the M’s and A’s early this year, huh? Well, anyway, here are some stray links and notes.

Severino changes agents

According to Jerry Crasnick, young right-hander Luis Severino recently switched agents. He left the Beverly Hills Sports Council and is now represented by Paul Kinzer of REP1 Baseball. Kinzer is no small time agent. He represents Starlin Castro, Edwin Encarnacion, Geovany Soto, and Jhoulys Chacin, among others. Aramis Ramirez and Rafael Furcal were Kinzer clients during their playing days as well.

For what it’s worth, Kinzer clients do have a history of signing long-term extensions before reaching free agency. Both Castro and Encarnacion jumped at the security of a long-term deal early in their careers, for example. Severino did not receive a big signing bonus as an amateur ($225,000), so he could be open to signing an extension and locking in that big payday. What kind of contract would it take? That’s a topic worth it’s own post.

MLB approves “wearable technology”

The rules committee has approved two forms of “wearable technology” for this season, reports Ronald Blum. Players are now allowed to wear the Motus Baseball Sleeve, which measures the stress on elbows, and the Zephyr Bioharness, which measures heart and breathing rates. Here’s more from Blum:

Data from the devices cannot be transmitted during games but must been downloaded afterward … Clubs may use the data only for internal purposes, and it will be shared with the player. It cannot be provided to broadcasters or used for commercial purposes. Players can decide whether or not to use the technology and determine who can receive the data.

MLB and the MLBPA still haven’t made an official announcement for whatever reason. The MLBPA has some concerns about privacy — “The next thing you know, the pitcher’s going to have a phone in his pocket taking selfies,” said Brett Gardner to Blum — and wearable technology will again be reviewed as part of the upcoming Collective Bargaining Agreement talks.

This all sounds pretty great to me, especially the sleeve that measures all the different stresses on a player’s elbow. Anything that can help detect and possibly prevent injuries is a-okay in my book. Then again, I’m not the one wearing this stuff, so what do I know. By the way, the rules committee also approved a pair of bat sensors that can be used during batting practice, but not games. They record bat speed, swing paths, all that good stuff.

Yankees have MLB’s top payroll*

The Yankees opened this season with baseball’s largest payroll at $223M, reports Bob Nightengale. The Dodgers are right behind them at $222M. There’s a catch though. This only covers the salaries of players on the active Opening Day roster. It doesn’t include money paid to players on other teams, of which the Yankees have very little. They’re paying $3M to Martin Prado. That’s it.

The Dodgers, meanwhile, are paying $18M to players not on their roster this season, including Matt Kemp, Mike Morse, and Hector Olivera. All things considered, Los Angeles still has baseball’s highest total payroll at roughly $254M. That’s down about $50M from last season. ($50M!) The Yankees are a distant second at $228M, and the Tigers an even distanter third at $200M. New York’s payroll is up $5M from last season and $10M from five years ago, give or take.

MLBTR’s Offseason in Review

I forgot to link to this earlier, but better late than never, I guess. MLBTR covered the Yankees as part of their annual Offseason In Review series two weeks ago. It’s exactly what it sounds like: a comprehensive review of the club’s offseason activity, as well as a look at the questions they still have a roster. Make sure you check it out. Tons of great information in there.

Hal Steinbrenner: “I’m not comfortable with the payroll being too much higher than it is now”

(Mike Stobe/Getty)
(Mike Stobe/Getty)

Today, at the quarterly owners’ meetings in Coral Gables, Hal Steinbrenner told reporters he doesn’t want payroll to climb much higher than it is right now. “I’m not comfortable with the payroll being too much higher than it is now,” he said to Jon Heyman and Bob Nightengale. “(But) we’ve surprised people in the past.”

This isn’t a surprise, right? Payroll has held relatively steady for a decade now even though the new Yankee Stadium opened in 2009 and MLB signed ginormous new national television deals two years ago. To be fair, the Yankees do pay a ton in luxury tax and revenue sharing each year. But still, payrolls around the league are going up while New York’s remain static.

Back of the envelope calculation: the Yankees currently have $223.6M on the books for next season per Cot’s, assuming Aroldis Chapman and Ivan Nova win their arbitration cases. Add in the rest of the 40-man roster and the $12M or so each team has to contribute towards player benefits, and the payroll for luxury tax purposes is around $240M right now.

The Yankees finished last season with a $241.15M payroll for luxury tax purposes and are again right at that number. The salary they took on in the Chapman and Starlin Castro trades replaces what they shed in Chris Capuano, Stephen Drew, Chris Young, and Garrett Jones after the season. Also, the Yankees still haven’t signed an MLB free agent this winter.

You don’t have to look any further than the Yankees roster to understand why spending huge on free agents all the time isn’t a great idea. That said, I think it’s fair to say the team is not leveraging its financial might as well as they should. The rest of the league is catching up financially, so the market advantages of being a New York team are going to waste.

Hal has maintained his plan is to get under the luxury tax threshold in the near future, which would save the team tens of millions of dollars in luxury tax and revenue sharing. The Collective Bargaining Agreement expires in December, and I assume the $189M threshold will go up with the next CBA. After getting under in 2017, the team could increase payroll substantially. We’ll see.

After ten years, Yankees’ stagnant payroll is an issue that can no longer be ignored

This place is only six years old. (Presswire)
Oh what a lovely new ballpark you have. (Presswire)

Over the last 15 years, baseball has experienced incredible growth as an industry, with MLB revenue climbing from $3.4 billion in 2000 to north of $8 billion in 2015. They might even be over $9 billion at this point. Attendance is as good as it’s ever been, television contracts are enormous (at least for teams that don’t own their own network), and MLBAM is a media juggernaut.

Baseball is extremely healthy right now and, as a result, teams are spending more than ever on players. According to the USA Today salary database, the average MLB payroll has gone from $52.8M in 2000 to $65.8M in 2005 to $83.7M in 2010 to $114.8M in 2015. The average payrolls have more than doubled over the last 15 years. That’s incredible! The Yankees specifically have gone from a $92.8M payroll in 2000 to a $213.4M payroll in 2015.

That only tells part of the story, however. New York’s payroll increased $23.1M on average each year from 2000-05. They went from that $92.8M payroll in 2000 to a $208.3M payroll in 2005. That’s insane. The team’s payroll has held fairly steady over the last ten years though. It was $208.3M in 2005 and $213.4M in 2015 according to USA Today’s numbers, which I’m certain are not 100% accurate, but are good enough for our purposes. Here’s a graph:

2000-15 MLB Payrolls

The Yankees have added some significant revenue streams over the last ten years. First and foremost, the new Yankee Stadium opened in 2009. That’s kind of a big deal. Then, in November 2012, a significant percentage of the YES Network was sold to News Corp. for hundreds of millions of dollars over a span of several years. And finally, MLB recently signed new national television contracts with FOX and TBS, more than doubling each team’s take. All of that additional revenue has not led to a payroll increase.

Of course, the Yankees have some significant expenses as well, including revenue sharing and the luxury tax. (They’re also paying off the new ballpark.) They’ve paid something along the lines of $20M annually in luxury tax for a few years now, and who knows how much they’re playing in revenue sharing. A Forbes article says the Yankees paid $95M (!) in revenue sharing in 2013. That’s ridiculous. Then again, the same article says the team led MLB with $461M in revenue that year. (That’s after revenue sharing and bond payments on the ballpark.) Forbes had the team’s revenue at $277M in 2005.

Revenue is up and expenses are up, but payroll has held steady for a decade now. To be fair, the Yankees have spent a lot of money on things not directly related to the roster the last few years. The team beefed up their pro scouting and statistical analysis departments, the Himes complex in Tampa was upgraded with major renovations a few years ago, and of course there was the unprecedented international spending spree a few years ago. Who knows what else has gone on behind the scenes?

But still, something isn’t adding up here. Annual revenue increased nearly $200M from 2005-13 according to Forbes — their numbers are estimations, it should be noted — yet payroll has not changed. Has all the extra revenue gone to increased expenses and behind-the-scenes stuff? I suppose it’s possible, but man, that’s really hard to believe. Especially when Hal Steinbrenner has been wearing out that “you don’t need a $200M payroll to win the World Series” line. He’s made it very clear he doesn’t want to spend more money.

The Yankees are in the game’s largest market and they are the biggest brand in the sport — if not all sports — and that comes with its advantages, specifically money. Lots and lots of money. Look at that graph above. From 2003 to 2011 or so the Yankees blew the rest of the league out of the water with their payroll. That isn’t the case anymore. The rest of the league is catching up, so the Yankees are not taking advantage of their market. They’ve done the rest of the league a favor and leveled the playing field, and it’s showing in the standings. The Yankees haven’t finishing closer than six games back of the AL East winner since 2012.

That is the intention of the luxury tax and revenue sharing system, of course. After all, the luxury tax is officially called the Competitive Balance Tax. It’s meant to level the playing field and as far as the Yankees are concerned, it appears to be working beautifully. Hal doesn’t want to pay the tax. He’s made that abundantly clear. And I get that. The luxury tax is dead money. The Yankees have been writing an eight-figure check for a few years now for … nothing. The money does nothing. It goes into MLB’s Central Fund and that’s it. It’s an investment with no return.

It’s one thing to pass on some free agents because of the luxury tax. Over the last few offseasons the Yankees have only spent whatever has come off the books, little if anything more. But now the Yankees have apparently reached the point where Brett Gardner and Andrew Miller — two of their very best players — are reportedly being made available. There are baseball reasons to trade them, but it’s also financially motivated too. The Yankees didn’t shed much money this year, so they can’t afford any significant free agents, meaning the best way to add talent is by trading some of their best players.

That is screwed up, man. The thought of trading players as good as Gardner and Miller because spending money on free agents is not permitted is screwed up. It’s one thing when you can’t sign a free agent because payroll won’t increase, but once you start trading away good players to make things work financially, then it’s really a problem. Shouldn’t this concern the MLBPA? The Yankees haven’t increased payroll in ten years. I feel like the union should consider that a problem.

The Steinbrenners own the Yankees and they’re free to do whatever they want with the team, the same way I own this stupid blog and am free to do whatever I want with it. And fans are free to disagree with the team’s direction. When payroll stands still for a decade even though a new ballpark opened (!) and the News Corp. deal happened and the league itself keeps setting revenue records, it’s not hard to understand why fans might be unhappy. Now there’s talk about trading good players because signing expensive free agents is not an option? Holy mackerel.

The Yankees don’t have to go out and sign the biggest free agents. You needn’t look beyond their roster to see why that can be a really bad strategy. There’s a point of diminishing returns too, where every dollar you spend brings fewer and fewer wins to the roster. I thought the Yankees were beyond that point a few years ago, but with payroll holding steady and the team winnings 84-87 games the last three years, they’re not there any more. There are some obvious ways the Yankees could spent money this winter and add a lot of wins to the roster.

For a few years in the mid-to-late-2000s it was difficult to see how a static payroll was hurting the Yankees. The rest of the league was still so far behind it didn’t matter. Now though, in 2015 heading into 2016, it couldn’t be any more obvious the league is getting more competitive and the Yankees are no longer in a class of their own. They were kings of the sport and now they’re much closer to everyone else.

The Steinbrenners don’t have to up payroll. It’s their team and they can do what they want. But they also can’t ignore how failing to keep up with league-wide inflation — a modest goal, I’d say — is hurting their chances to field one of those “championship caliber teams” Hal is always talking about. The longer the Yankees’ payroll remains stagnant, the better it is for the rest of MLB.

Business Notes: Payroll, In-Market Streaming, Yankee Stadium Letters

(Presswire)
(Presswire)

I wasn’t quite sure what to do with all of these spare business-related links I had lying around, so I might as lump them into one post. Here are some miscellaneous links worth passing along.

Yankees open season with $219M payroll

According to numbers compiled by the Associated Press, the Yankees opened the 2015 regular season with a $219,282,196 payroll, second highest in baseball behind the Dodgers ($272,789,040!). That is the team’s second highest Opening Day payroll in history, behind the $228,106,900 payroll they had at the start of 2013. The Yankees added about $10.5M in payroll during the season from 2010-14 according to the numbers at Cot’s, so while the Yankees are starting the season at $219.3M, recent history suggests they’ll end the year at $230M or so.

Average salary climbs to $4.25M

The average player salary in MLB climbed to $4.25M this season, so says the Associated Press. That is up from $3.95M last year and $3.65M the season before. “MLB’s revenues have grown in recent years, with the increase in national and local broadcast rights fees being a primary contributor. It is expected that player compensation will increase as club revenues increase,” said MLB’s chief legal officer Dan Halem to the Associated Press, stating the obvious.

This is the first time the average player salary has topped $4M. The average salary first broke $1M in 1992, $2M in 2001, and $3M in 2008. Clayton Kershaw is the game’s highest paid player this season at $31M, with Justin Verlander ($28M) and Zack Greinke ($28M) placing second and third. Also, Robert Raiola says the per diem for road days is $100.50 this season, up from $99 last year. That’s a nice little allowance but it’s actually not wildly out of line with what many folks with normal jobs receive during business trips. Either way, yeah, it’s good to be a baseball player.

Manfred hopes to have in-market streaming this year

Two weeks ago we heard MLB will soon announce a deal allowing fans to stream in-market games online. That report was a bit premature — no such deal is imminent — but new commissioner Rob Manfred did confirm to Brian Costa and Matthew Futterman that they are working on an in-market streaming service and hope to have it in place this year. From Costa and Futterman:

WSJ: You’ve discussed how important technology is to reach young fans. When will a 15-year-old in New York be able to watch a Yankees game on his phone?

Manfred: The best way to answer that question is to say the better part of my workday today was consumed by the topic of in-market streaming. It is particularly complicated in the context of a media market that is changing so quickly, but I do believe we will get a solution on in-market streaming in the relatively near future.

WSJ: Sometime this year?

Manfred: I hope so. I’d like to believe there will be games streamed at some point this year.

It’s unclear how such an agreement would work, though I’m guessing Yankees fans would have to subscribe to YES through their cable provider, then pay an additional fee to be able to stream online. YES did have an in-market streaming service a few years back that was totally awesome — if I remember correctly, you needed both a YES subscription and an MLB.tv subscription, and then had to pay an extra $50 — but it was discontinued for whatever reason.

Hopefully MLB gets this in-market streaming thing figured out and soon. It’s 2015. I’m very willing to spend my hard-earned American dollars for the right to watch the Yankees on my phone while standing on a subway platform.

No bids for YANKEE STADIUM letters

And finally, remember the giant old YANKEE STADIUM letters Reggie Jackson put up for auction? Darren Rovell says no one bid on ’em. The only bid placed at least week’s auction was a phony $280,000 bid an auction house employee placed on Jackson’s behalf in an attempt to spur on other bidders. Reggie was hoping to get $300,000 to $600,000 total for the 13 giant letters. Practicality 1, nostalgia 0.