The Yankees' Fiscal Restraint is a Good Thing

We have heard about the Yankees’ desire to get their payroll under $189M by 2014 for some time now. Personally, I love it. Don’t get me wrong though, if there is an absolute pressing matter at a certain position, then the Yankees should go out and acquire that player. Signing C.C. Sabathia is an example of a very expensive yet very smart signing during the winter of 2008.

Since the off season began, all I have heard from this fan base is consistent complaining about Free Agent after Free Agent getting passed over by the Yankees. There were a few impact players that could have been had, but their signing would not have made sense. Committing albatross contracts to Zack Greinke or Josh Hamilton would have been bad moves, and re-upping Nick Swisher for four years would have been as well. I love Swish, and besides his postseason performances, am glad he was a Yankee for four years, but it was time to move on. Soriano had an amazing season in 2012 but with Mo coming back and the Yankees’ plethora of high end relief prospects, giving him three or four years would have been a mistake.

The only complaint that had some merit was letting Russell Martin walk. Outside of September, he was a black hole in the lineup and his defense is overrated. I would have understood the reasons for signing him but I also understand the reasons for not doing so. Gary Sanchez is not close to being ready to take over the catching duties, Austin Romine cannot stay healthy, and J.R. Murphy still has to prove himself at AA. As it currently stands Chris Stewart and Francisco Cervelli are the catchers. I’m not thrilled with that duo but I’d prefer that they roll the dice with those two. People tend to forget that the catcher is not known for his offensive prowess. Jorge Posada’s presence in the lineup for so many years has clouded fans’ assessment of the position’s requirements.

Outside of the few impact players, this Free Agent class consists of mediocrity. Could guys like George Kottaras, Scott Hairston, Cody Ross, and Nate Schierholz have helped? Sure. Are they players worth getting upset about signing elsewhere though? No. So for the life of me, I cannot understand why so many fans are. I have heard fans questioning Cashman’s desire to win. I have even heard fans say that the Steinbrenner sons should sell the team. Seriously. Spending a ton of money is not always the answer. Sometimes standing pat is the right move to make. Knee-jerk reactionary spending is the reason that the Yankees are currently in this position.

Personally, I am looking forward to the 2013 season more than previous ones because there are question marks. For me, this makes the season more interesting because we have no idea what is going to happen. I know that no matter how stacked a team is, the unexpected can still happen, but you still have a pretty good idea what will. I hope the days of excessive spending are truly over & this is not just a short-term goal because over the past few years, it does not feel like I am watching baseball. It feels more like a corporation securing highly paid assets to further increase their own revenue stream.

With Greinke Signing Dodgers Will Outspend Yankees

From Joel Sherman:

If it needed any further punctuation, the Dodgers established that they — not the Yankees — are the financial heavyweights of baseball yesterday by reaching agreement with Zack Greinke on a six-year, $147 million contract.

Unless the Yankees come out of their economic cocoon, they will not have the largest payroll in the game for the first time since 1998. With Greinke’s signing, the Dodgers are up to about a $220 million outlay — and they do not appear finished yet.

The Dodgers have a 3 p.m. deadline today to finalize a deal with Hyn-Jim Ryu after winning a posting bid for the star Korean lefty 30 days ago. And there have been indications they also may go after a free-agent starter such as Anibal Sanchez.

This will be the first time since 1998 that the Yankees won't have the highest payroll in the sport. Of course, that would change if the Yankees decide to make a splash or two.

Yanks Blame StubHub For Attendance Drop

From Josh Kosman:

Yankee Stadium attendance is down 3.6 percent so far this year — greater than the 3 percent drop last season — and the team is blaming StubHub for its gate woes.

“We believe there are serious issues with the StubHub relationship,” team president Randy Levine told The Post yesterday. “We are actively reviewing more fan-friendly alternatives for next year.”

The Bronx Bombers and other Major League Baseball teams have bellyached about StubHub for a couple of years — as more fans turn to the low-priced online reseller for tickets instead of buying directly from the team.

The Yanks and other teams claim tickets are priced too low on StubHub.

...

Compared with last season’s total average attendance, the Yanks’ 25-game average is off 9 percent.

Overall, MLB attendance is up 7 percent. Much of that is due to the Miami Marlins moving into a new stadium.

Plus, the Yanks had been the first or second best-selling MLB team through their first three seasons in the new stadium. This year they are only the fifth best-selling team.

To me, having plenty of affordable tickets is as "fan-friendly" as it gets, but I guess "fan-friendly" was a euphemism for something else.

The Yankees shouldn't blame StubHub for their problems drawing fans and then take it out on those fans by ridding the market of those affordable tickets. There are reasons the fans no longer want to go to games, but StubHub is not one of them. Maybe knocking down a piece of American history to put up a billion-and-a-half dollar knock-off wasn't necessary. Maybe steadily pricing the average fan out of most of the good seats was also mistake. And maybe combining those things with a new penny-pinching approach to free agency was the worst move of all, if of course selling tickets was the goal.

Resigning Cano and Granderson Remains Part of Yanks Plans

From Jon Heyman:

Seeking to diffuse any notion that the Yankees won't be able to retain their buggest stars and perhaps suffer a major talent deficit in 2014 when a payroll cut is planned, team president Randy Levine said, "The plan contemplates (Robinson) Cano, (Curtis) Gransderson and a full championship team.''

The Yankees have said they plan to decrease their payroll from the low $200 millions to below $189 million to get below the luxury-tax threshhold for 2012, thus significantly reducing their tax rate in future years and saving themselces tens of millions. With that in mind, some folks are starting to do their own little math and wondering how many stars can be retained considering the Yankees will still have three $20-million-plus per-year players (Alex Rodriguez, Mark Teixeira and CC Sabathia) on gthe payroll in 2014, leaving themselves about $120 million to fill out the other 22 spots on the team.

With the contracts of Cano and Granderson up after 2013, folks specifically have wondered how the Yankees will squeeze those two big stars onto their payroll. But Yankees people remain confident publicly they can do that and remain a contender.

"We'll have a great team either way,'' GM Brian Cashman said. "At $189 million, we should,''

The Yankees say they will not entertain the idea of going above the $189-million threshhold and are committed to getting below that figure. "The new Basic Agreement has changed the landscape,'' Cashman said. "From a business perspective, we have no choice. Do you want to go over $1 million at the expense of an additional $50 million? We're going to be at or below that ($189 million) number. We will certainly find a way to do it.''

Personally, I have no idea how it'll be possible to retain those two and have a good roster around them. I guess we'll just have to take their word for it for now.

Hal: $189 Million is the Target

From Wallace Matthews:

Hal Steinbrenner got accosted on his way to the elevator by the Yankees' beat crew, and confirmed what GM Brian Cashman has been saying all winter:

The Yankees are in the process of "streamlining'' the payroll, and the magic number is $189 million, which will be the new luxury-tax threshold for the 2014 season as established by the recently ratified CBA.

"I'm looking at is as a goal," Steinbrenner said, "and my goals are normally considered a requirement.''

The only good that can come out of this, besides the Steinbrenner family saving some extra dough, is that fans around the country might slow down a bit with the whole "the Yankees buy their championships" thing. That said, I never cared about those fans or their opinions in the first place.

Harper on A-Rod's Terrible Terrible Contract

From John Harper:

In case you’d forgotten, A-Rod still has six years remaining on his contract, which means he’ll turn 42 in July of the final year of his deal, 2017, at which point he’ll still earn $20 million, down from the $31 million he made last year.

By then, well, the only question was supposed to be how many more home runs had Rodriguez hit than Barry Bonds in surpassing him to become baseball’s all-time home run leader. Now the question, after four straight injury-marred seasons, isn’t just whether A-Rod will get near Bonds’ record but whether he can play anywhere near his superstar level of old.

It’s not about his bat speed but simply his ability to stay healthy. He was an iron man for much of his career, averaging 158 games played from 2001 through 2007. Of course, we know that he had some help in at least some of those years, since A-Rod has admitted using steroids from 2001-03.

But in any case, injuries have prevented him from playing more than 138 games in any of the last four seasons. Because he needed arthroscopic knee surgery last summer and then dealt with a thumb injury upon his return, A-Rod last season played in only 99 games, a career-low, while hitting only 16 home runs.

The drop-off in power last year was clearly linked to his knee injury. Rodriguez, remember, had a spectacular spring training last March, hitting with an explosiveness in his swing that had been absent since hip surgery in the spring of 2009. Hitting coach Kevin Long was so wowed that he was predicting a return to 2007-like numbers; A-Rod hit 54 home runs that year in winning his third MVP award.

So you could make a case that Rodriguez should return to form. He insisted the knee surgery, which repaired torn cartilage, wasn’t anything serious enough to limit him in the years to come, and indeed, it’s the most common of surgeries for pro athletes.

Only now you have to wonder. If it was still enough of an issue for him to seek radical treatment earlier this month, following Kobe Bryant’s advice in getting Orthokine treatment on his right knee — and left shoulder — then it can hardly be dismissed as something that won’t bother him in the future.

We can clearly see the side-effects of A-Rod's contract with the way the Yankees have handled this offseason, and I suspect that won't change for the life of the deal.

It's a deal that, in my opinion, will go down as the worst contract ever handed out in baseball, if not all of sports. I had hoped the Yankees wouldn't let it change the way they do business, but obviously it has.

Yanks Hit With $13.9M Luxury Tax

From The AP:

The New York Yankees were hit with a $13.9 million luxury tax bill Thursday, their lowest since 2003.

The fee, assessed by Major League Baseball under its labor contract, is down from $18 million last year and $25.7 million in 2009, when the Yankees won the World Series.

Boston, which missed the playoffs for the second straight season, is the only other team that will have to pay a tax. The Red Sox received a bill for $3.4 million, up from last year's $1.5 million.

Season-ending payroll information and the tax was sent to teams and obtained by The Associated Press.

Looks like the Yankees are getting closer to where they want to be financially, which is good, I guess.

YES Networks Deal With DIRECTV Ends Today

If you watched the game yesterday, I'm sure you noticing one of the many commercials about this. If not, here is some info from Direct TV:

You may have heard that our current contract with YES Network expires April 1. We wanted you to know that DIRECTV is still negotiating with YES Network. Their threats to take down the channel are nothing more than gamesmanship to try and gain leverage in the talks. Obviously their goal is to get DIRECTV customers to pay as much as possible for their network, so these are the games that they play in negotiations. This will get resolved if YES agrees that DIRECTV should pay the same amount as the other three dominant TV providers in the market (Comcast, Time Warner & Cablevision). DIRECTV customers should not be forced to pay a penny more for YES Network.

DIRECTV plans to keep the channel up while we conclude these negotiations. However, if the channel should go dark for any reason, make no mistake that it was solely the decision of YES Network to take the channel away from DIRECTV customers.

If YES Network goes dark, MLB Extra Innings and NBA League Pass customers will continue to see Yankees and Nets games but will not have access to the YES Network feed. In most instances DIRECTV will provide the opposing team's feed for these packages. If you receive YES Network as your local RSN unfortunately these games will not be available.

It's time like these that make me happy I have Time Warner.

Good luck to all you DIRECTV subscribers out there, I hope, for your sake, that this gets worked out quickly.

All MLB Teams Rose in Value Except For Padres, Indians, and of course, the Mets

From Forbes:

The average MLB franchise is now worth $523 million, an all-time high and 7% more than last year. All of the league’s teams rose in value except for three: the New York Mets, San Diego Padres and Cleveland Indians. The increase in team values is the result of greater revenue for teams playing in new stadiums, like the New York Yankees (up 6% in value to $1.7 billion) and Minnesota Twins (up 21% to $491 million) as well as the Florida Marlins (up 13% to $360 million), who are scheduled to move into their new stadium in 2012.

Strong attendance and local television ratings boosted the values for teams like the Philadelphia Phillies (up 13% to $609 million) and Cincinnati Reds (up 13% to $375 million). The Yankees are baseball’s most valuable team for the 14th straight year (since Forbes began valuing franchises in 1998). The gap between the Yankees and No. 2 Baltimore in 1998 was 12%. Today the Yankees are 86% more valuable than No. 2 Boston.

Yankee Global Enterprises is a three-engine money-making machine. The baseball team generated $325 million in revenue from regular-season tickets and luxury suites in 2010. Sponsorship revenue at the stadium is $85 million annually thanks to deals with PepsiCo, Bank of America, MasterCard, Delta Air Lines and others.

The YES Network, the team’s 34%-owned regional sports channel, is the most profitable RSN in the country and had over $400 million in revenue last year. The Yankees own a stake in Legends Hospitality Management, which manages stadiums, and generates $25 million in operating income. The enterprise value for the Yankees, YES and Legends is $5.1 billion.

Yanks Offered $54 Million For Chapman? (Updated)

(Updated: 11:44 AM)

We know Cashman will lie to the media so I'm not so sure I believe him on this one.

The lawsuit mentioned in the tweet refers to a Florida lawsuit against the Fernandez and Hendricks Sports Management, Chapman's representatives, that alleges "tortuous interference" and "unjust enrichment" in signing Aroldis Chapman as a client.

 Regardless of the suit itself, I guess I should get off the Yanks case for not signing the guy because it appears like they certainly tried their best. I'm pretty shocked that he would pass up an extra $24MM to play in Cincy, but I guess he wasn't ready for the bright lights of The Big Apple.

Cano Says He Won't Ask Yanks For An Extension

From Marc Carig:

Cano, who enters the season as arguably the best second baseman in baseball, said he will not ask the Yankees for a contract extension before his current deal expires.

"I would never do that," Cano said.

Over the winter, Cano switched agents and hired Scott Boras. But he is under club control through the 2013 season. The Yankees owe Cano $10 million this season and have club options for 2012 ($14 million) and 2013 ($15 million), with a $2 million buyout on each.

He says that now, which is exactly what you want him to say, but be wary of Boras, you know he's going to try to change his mind.

Salary Commitments for 2011 and Beyond

I'm not quite sure why I felt that this exercise would be interesting - to myself or our fine readership - but it seemed better than sorting through the inconsequential rumors and musings that fill-up baseball news this time of the year. While the Yankees do not have the sort of salary constrictions that most everyone else in professional sports must deal with, it does seem clear that they are scraping the ceiling of some self-imposed cap (as high as it may be). With that in mind, I was curious to see how things would shake-out as this decade progresses - which may be particularly intriguing, as Cashman's contract is up at the end of this coming season.

These numbers are courtesy of Cot's Baseball Contracts - an indispensable resource for all things related to player contracts, arbitration figures, and free agency.

2011 - $191.45 MM
2012 - $171.5 MM
2013 - $149 MM
2014 - $73.5 MM
2015 - $66.5 MM
2016 - $42.5 MM
2017 - $20 MM

A few notes:

1. Sabathia may opt-out after this year - if he does, $23 MM would be subtracted from 2012 - 2015.


2. Soriano may opt-out after this year, in which case $11 MM would be subtracted from 2012 and $14 MM from 2013. He may also opt-out after 2012, in which case the $14 MM would be subtracted from 2013. If he opts out, the Yankees would owe him a $1.5 MM buy-out.


3. I included the club options for Swisher (2012) and Cano and Granderson, which run through 2013. I simply cannot see the Yankees letting them go at what appear to be relatively team-friendly salaries.


4. I did not include the options for Jeter, Marte, and Feliciano. I expect Jeter to decline his option for $8 MM and seek a raise, and I doubt that Marte and Feliciano are in the team's long-term plans.


5. I did not include the salaries of Gardner, Pena, Nunez, Robertson, and the other league-minimum players - I can't imagine those numbers bringing the payroll up much more than a couple million dollars.

For comparison's sake, you can take a gander at the Blue Rays salary obligations at MLB Trade Rumors - suffice it to say that the 2015 Yankees will likely be paying more for three mid-to-late 30s players than the Blue Jays will pay their entire roster this season.

What should you take away from this? To be honest, I'm not quite sure. The Yankees finances do seem to negate some of the worries of overpaying players, but I'm not sure that I'm comfortable with Teixeira and Rodriguez earning a combined $42.5 MM in 2016 - particularly when both players are expected to be firmly in their decline phases at that point. As it stands, the Red Sox are the only other team with a player locked-up through 2017 in Carl Crawford. At this juncture, they don't approach the Yankees mid-decade commitments, though that is likely to change with an extension for Adrian Gonzalez.

One Year Deals For Hughes, Joba, and Logan

From Brian Costello:

Hughes was signed for $2.7 million. The 24-year-old pitcher was in his first year of arbitration eligibility...

Chamberlain snagged a $1.4 million deal. The reliever also was in his first year of eligibility...

The Yankees gave Logan $1.2 million. This is Logan’s second year of eligibility.

With these three deals the Yankees avoid going to arbitration with all three.

Yanks Willing to Give Andy $12-$13M

That sounds fair to me. I still don't think he's coming back, though.

Yanks Luxury Tax Down $7.7 Million

From Mark Feinsand:

Major League Baseball issued its annual invoices for the luxury tax, showing that the Bombers slashed their league-leading tax for 2010 by more than $7 million.

According to figures obtained by The Associated Press, the Yankees were hit with an $18 million luxury-tax bill, their lowest since 2003. For the '09 season, the Bombers shelled out $25.7 million.

"Atta baby," general manager Brian Cashman told The AP. "And right now we're in the $170s."

...

The Red Sox were the only other team hit with a luxury-tax bill, as Boston will pay out $1.49 million, the first time since 2007 that the Sox have exceeded the payroll threshold.

Still, with a payroll of $170.7 million, the Red Sox were a whopping $44.4 million behind the Yankees - more than the entire payrolls of the Padres ($43.7 million) and Pirates ($44.1 million). Both teams must send their checks to the league by the end of January.

Saving money, not landing any players that will improve the team, and they appear happy about it. If 2011 isn't being looked at as a transitional year than I don't know what is.

I wonder what George would be saying about all this if he were still around.

Details on Jeter's New Deal

From Jayson Stark:

If Derek Jeter is going to be a $17 million man in 2014, he's going to need a new trophy case -- because the only way he can earn that salary is to collect a lot of trophies over the next three years.

...

Jeter is guaranteed salaries of $15 million next year, $16 million in 2012 and $17 million in 2013, with $2 million of that money deferred without interest in each of those seasons.

He then goes on to explain the creative 2014 player option:

The player option for 2014 starts at $8 million. It then can go up by:

• $4 million if he wins an MVP award in 2012, '13 or '14.
• $2 million if he finishes second through sixth in any of those years.
• $1.5 million if he wins a Silver Slugger in any of those years.
• $500,000 if he wins a Gold Glove in any of those years.
• $500,0000 if he wins an LCS MVP award in any of those years.
• $500,000 if he wins a World Series MVP award in any of those years.

There is no limit to how many times he can earn any of those escalator payouts. However, the most he can get paid in 2014 is $17 million, meaning he can earn no more than $9 million in increases. If the option is picked up for any amount less than $17 million, he can also earn any of those amounts in 2014 -- up to a max of $17 million earned.

There is also the $3 million buyout if they option isn't picked up.

What are your early predictions? How much will Derek Jeter make in 2014?

Jeter's Agent Calls Yanks Negotiating Strategy "Baffling"

From Mike Lupica:

This is what Casey Close said Saturday night, after a week of reading what the Yankees have to say about everything:

"There's a reason the Yankees themselves have stated Derek Jeter is their modern-day Babe Ruth. Derek's significance to the team is much more than just stats. And yet, the Yankees' negotiating strategy remains baffling."

Then Close said: "They continue to argue their points in the press and refuse to acknowledge Derek's total contribution to their franchise."

The Yankees should respond to this by telling Close to go out and see if he can get a better deal than the 3-year $45 million deal they offered this week. See what other teams are willing to pay for Jeter and his intangibles. The reality is that no team will come close to that offer.

It's pretty unfair for anyone to blame the Yankees for how they're handling these negotiations. What are they supposed to do, just hand him the 6-year $120 million deal he probably wants because he's DEREK JETER?

I don't think so.

It's not their fault that Jeter--at 36--just happens to be coming off his worst season ever. Maybe if he hit .320 last year the Yankees negotiating wouldn't have to be so baffling.

ESPN: Yanks Will Overpay Jeter

From Wallace Matthews:

Derek Jeter is going to be paid Ryan Howard money for putting up Marco Scutaro numbers.

"The Yankees are going to overpay him," said a source with intimate knowledge of the discussions between the team and Casey Close, Jeter's agent. "The question is, how much are they going to overpay him?"

Several sources told ESPNNewYork.com on Monday that while the Yankees have yet to make a formal offer to Jeter -- or to Mariano Rivera, their other high-profile free agent, not to mention Cliff Lee, their primary target in the free-agent market -- offers are currently being prepared for all three.

...

From conversations with two sources, both of whom requested anonymity due to the sensitive nature of the talks, Jeter's offer is expected to be for three years at somewhere between $15 million and $20 million per season.

...

"Some people will think the number is unfair," said one source, "And some are going to think it is way too much."

Wow, that's really a lot of money for a 36-year-old SS coming off the worst season of his career.

Going to the game tonight? Don't drive.

If you are going to drive, things just got a litte more expensive for you:

Welcome back to the playoffs, Yankees fans - and make sure you bring some extra cash for parking.

Pinstriped boosters were outraged by word that Yankee Stadium garages will jack up prices from $23 to $40 starting with Saturday night's game against the Twins.

"It's really crap," die-hard Thomas Parker, 52, of Queens, griped about the 74% increase from regular season costs.

...

The just-boosted prices are likely a warm-up for next season, when parking fees are expected to rise sharply.

There is a cheaper option: the six-level garage at the nearby Gateway Center Mall is offering $30 parking for fans willing to make the five-block walk to the ballpark.

During the regular season, the price was as low as $10 and the garage's 2,600 spaces were about two-thirds filled by fans.

Harper: Jeter May Expect A-Rod Money

From John Harper:

Jeter may be the ultimate team guy, but two former teammates believe that when it comes to getting paid, his pride will demand that he get something approaching A-Rod money, regardless of what he hits this season.

"It's up to (the Yankees)," one former player said. "Knowing Jeet, he's not going to let an off-year, if it turns out to be an off-year, play a role in what he thinks he should get paid. He just doesn't think like that. He'll be more convinced than ever that he'll come back and hit .330 next year."

The second former teammate essentially agreed.

"The question is whether (Brian) Cashman and the others think this is the start of a decline," he said. "And if so, are they going to factor it into the negotiations or just pay him for being the face of the franchise all these years? Knowing Derek, he'll say all the right things, but he won't give an inch based on his numbers this season."

Obviously the Yankees won't want to go to war with Jeter, knowing it likely would be a PR nightmare.

"They're in a tough spot," one prominent agent said Tuesday. "Because the way he's hitting, the gap between his true value as an old shortstop without power and his Yankee-legend value is so enormous, I'm not sure how you bridge that gap without causing some hard feelings."

I think the Yankees and Jeter will end up agreeing to a 4-year deal worth anywhere from $80-$100. Hopefully, much closer to $80. A $20 million dollar a year contract is pretty good for a guy that only deserves $10.

But wouldn't it be refreshing to see an athlete who has made hundreds of millions of dollars over the course of his career leave money on the table for the betterment of the only team he's ever played for? I mean if winning truly is the only thing that matters, that's the thing to do, right?

This reminds me of a story about Ted Williams: After the 1959 season, the first sub-.300 season of Williams' career, GM Bucky Harris (or owner Tom Yawkey) offered him a deal for $125K for the 1960 season. It was the same as he made in 1959, and by all accounts a fair deal. But Williams wouldn't sign it and insisted that the his salary be cut from $125,000 to $90,000. That was the only way he'd sign because he felt he didn't play up to his contract the year before.

If Jeter did the same thing, or something even more significant, I'm sure Brian Cashman could figure out a few good ways to use the extra scratch.

Sadly, that's not the world we live in and even a guy as respected as Jeter won't make that kind of concession. His ego is far too big for that.