While we all know the big signings of the Yankee off-season, it is somewhat shocking to many see the Yanks pouring hundreds of millions into player contracts during a global recession. Maury Brown, however, sees this as the perfect storm of Yankee spending. In a piece that summarizes the Yankee off-season, he explores how the non-trade for Santana, a bunch of contracts coming off the books and the tax shelter of the new stadium have put the Yankees in the free agent driver’s seat this winter. With Manny and Teixeira still out there, the team might not be done yet either.
Yanks upgrade car sponsorships
The beleaguered General Motors decided today that they will not be remaining as in-stadium sponsors of the Yanks next year. They’ve decided to maintain their New York baseball presence by sticker with the cheaper option in Queens. In response, the Yanks announced deals with Audi and Toyota as the car sponsors of the new Yankee Stadium. On the road or in the ballpark, that’s an upgrade.
Hal — not Hank — on SBJ’s most influential list
The sports industry’s trade publication Sports Business Journal has unveiled their list of the top 50 most influential people in sports business. As is only appropriate, a Steinbrenner occupies a prime spot on that list, but it’s not the one people might expect.
Hal, the younger of the Steinbrenner children and the team’s current head, earned himself the 28th spot on the list. SBJ writes rather glowingly of Hal, who is making his debut on this list:
Several years of gradual but historic change within the Yankees camp were codified last month when Hal Steinbrenner received official designation as the team’s controlling executive, trumping his older and louder brother, Hank, who will remain overall head of baseball operations.
Much more calm and measured when compared with Hank or their father, George, but still a firm negotiator, Hal provides a rather different face to the Yankees as they prepare to move into their new stadium in the spring. That ballpark, a $1.3 billion edifice packed with revenue-generating opportunities, gives Hal ample room to put his own stamp on the franchise.
We have covered this territory as well, but it’s clear that people inside the industry regard Hal as the real executive holding the reins of power inside the Yankee organization now. Hank may garner the back pages, but all he seems good for right now is a quote. He can talk and talk and talk, but when push comes to shove, the ultimate decision will be Hal’s. That should be very good for the Yanks indeed.
Must be the money
With this new stadium on tap, we hear a lot of talk about reduced revenue sharing and higher revenue streams, but a lot of people — including me — don’t quite understand how baseball’s complicated tax structure works. Enter Richard Sandomir. In a fairly comprehensive and comprehendable article earlier this week, The Times sports business writer explored the how’s and why’s of the Yanks’ revenue sources. Basically, the new stadium allows the team more opportunity to draw in more money while deducting from their revenue payments and the YES Network’s subscriber fees keeps the team relatively insulated from the projected decreases in advertising money due to the economy. Makes sense to me.
More on the Yanks and the economy
Picking up where I left off this morning is Ken Rosenthal. While I think the MLB-wide arbitration decisions portend tighter economic times throughout the sport, Rosenthal feels that, contrary to what many of us assumed, even the Yankees will suffer. Outside of a soft market for outfielders, Rosenthal expects the Yanks’ 2009 payroll to be significantly lower than their 2008 total and doesn’t believe the new stadium will be as lucrative in its first year as it would be had the economy been stronger. Of course, we’ve heard the payroll line before, and the Yanks still have a $140 million offer outstanding to CC Sabathia. The Yanks’ spending, though, may not be as all-encompassing as we once thought it would be.
Sports’ most recognized brand
Via The Biz of Baseball comes a short story sure to warm the heart of any Yankee fan. According to a recent sports branding study, the Yankees are the most popular out-of-market team in the U.S. They lead a pack of high-profile sports franchises atop the Packers, Red Sox, Cowboys and Lakers. This popularity certainly is just another sign that MLB needs the Yanks and that fans love to watch the team they love to hate.
Economic uncertainty shows in MLB-wide arbitration decisions
Baseball isn’t so recession-proof after all.
Until about an hour ago, no one really knew how the American economic slump would impact baseball. Now that the arbitration decisions are in, it’s clear that teams are being far more cautious than usual and that the free agent market for lesser players may not be as robust as those free agents had hoped.
To me, three players and their teams’ respective decisions highlight this economic issue. Bobby Abreu, Pat Burrell and Adam Dunn were not offered arbitration by, respectively, the Yankees, Phillies and Diamondbacks. In all three cases, the teams are not actively looking to retain their former players, and in any other year, these three players would have been offered arbitration. This year, though, the specter of an arbitration acceptance looms large.
Leaving aside Bobby Abreu for now — because we’ll get to him later today — the most glaring example is Pat Burrell. I don’t think the Phillies expect to re-sign Burrell, and entering the off-season, Burrell didn’t expect to re-sign with the Phillies. As the economy has tanked, though, mid-30s outfielders who aren’t Manny Ramirez must not be in high demand.
If the Phillies, Diamondbacks and Yankees all declined to offer arbitration to these players, the teams’ GMs must feel that there is a better-than-usual chance these players would accept binding arbitration. Either the market for corner outfielders isn’t there or it is not as strong as these players would hope. After all, it would behoove these three, expecting large contracts, to ride out the economic tide for one more year while playing at a salary equal to or exceeding their 2008 total.
So Brian Cashman said no. Ruben Amaro, Jr. said no. Josh Byrnes said no. It makes sense on the one hand, and it doesn’t on the other.
Of course, now, these three players are slightly more attractive targets and more so Dunn than the other two. Teams who sign them won’t have to surrender money and draft picks, and the three of them are now at the whim of market forces. Those forces, by the way, as the Cubs’ decision not to offer arbitration to Kerry Wood shows, don’t figure to be too strong. Teams just can’t run the risk of saddling themselves with last year’s merchandise and last year’s price in this year’s economy.
In the end, this won’t impact the deals that Mark Teixeira, CC Sabathia and Manny Ramirez get. Those guys have tens of millions of reasons to feel good, and the players at the top will get their deals. But everyone below them must looking at the arbitration carnage tonight in fear. Now we know, at least, why the Hot Stove has been so cool lately.
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