February 11, 2016

The Yankees and Money

Mike Axisa looks to the future to see how the Yankees might sign Bryce Harper, but in doing so quotes Jeff Passan on the state of the Yankees finances:

Now, we’ll get to that, though first it’s imperative to understand how and why the Yankees are looking years down the road when deciding to sit out this offseason. And it’s best to start with two numbers: $508 million and $8.1 million. The Yankees’ yearly revenues in the most recent franchise valuations by Forbes were $508 million, and their operation income – money in the black – was $8.1 million. That is not a lot, not when New York’s revenues exceed the second-place Dodgers’ by more than $100 million.

If reason No. 1 (to pass on free agents) was minimal profit, No. 2 is every bit as important: the fear of the unknown. And with baseball ready to begin negotiating a new collective-bargaining agreement soon, the unknown is palpable. New York has no idea what percentage of its revenue it will be sharing with lower-revenue teams. Currently, the tax rate assessed to every team is 34 percent of local revenue, and that pool is split evenly among the 30 teams. High-earning teams pay what amounts to another 14 percent on top of that. The Yankees give more in revenue-sharing dollars than every other team, and it’s not particularly close. With the gap between the richest and poorest teams as significant as ever, they could give even more, something they’ll surely resist.

Remember, much of the restrictions put on players ability to negotiate over the last 70 years (bonus babies, the draft, revenue sharing, free-agent compensation picks) were designed to limit the Yankees ability to dominate the league. They should be concerned about the next CBA, although the Tigers, Angels, and Dodgers are acting more like the stereotype of the Yankees than the actual team.

Leave a Reply

Your email address will not be published. Required fields are marked *