• Are The Yankees For Sale?

    Posted by on May 24th, 2012 · Comments (22)

    Via the Daily News -

    Rumors are flying in Major League Baseball and New York banking circles that the family that has owned Major League Baseball’s premiere franchise since Cleveland shipbuilder George Steinbrenner purchased the club for $8.8 million in 1973 is exploring the possibility of selling the Yankees.

    Multiple baseball and finance sources told the Daily News they are hearing that the team the Steinbrenner family has led to seven World Series titles could be put on the block in the wake of the record sale price of $2.175 billion the Los Angeles Dodgers went for in April.

    “There has been chatter all around the banking and financial industries in the city for a couple of weeks now,” one high-level baseball source told The News.

    Yankee president Randy Levine adamantly denied the rumors: “I can say to you there is absolutely, positively nothing to this. The Steinbrenners are not selling the team.”

    Sure, and, back in the ’50′s, the Dodgers and Giants said they were not moving to the West Coast…

    Seriously, now is the time to sell for the Steinbrenners. The Dodgers sale set the market price. And, the Yankees know that their team is getting old and average…and the pipeline is not full of legit prospects. Factor in the changes in the draft and payroll taxes – and the Yankees product on the field is going to get worse in the future. Then attendance and TV ratings go down. That’s not going to help the value of the team. Better to sell now, and cash out, while the value is still high.

    Comments on Are The Yankees For Sale?

    1. Pat F
      May 24th, 2012 | 8:58 am

      “And, the Yankees know that their team is getting old and average…and the pipeline is not full of legit prospects. Factor in the changes in the draft and payroll taxes – and the Yankees product on the field is going to get worse in the future. Then attendance and TV ratings go down. That’s not going to help the value of the team. Better to sell now, and cash out, while the value is still high.”

      100% accurate and critically supported by the historical context of the last 17 years. The Yankees have proven themselves unable to overcome and rejuvinate aging rosters and a shallow farm system (assuming for the sake of argument the farm is indeed shallow at an extremely hypothetical point in time). In addition they have not been trend-setters nor innovators in the marketplace in terms of creatively augmenting revenue streams despite a difficult economic climate and/or other obstacles. Mark 2012 down in your books, it’s all downhill from here :)

    2. sicilianlou
      May 24th, 2012 | 9:51 am

      Not a snow balls chance in Hell will they sell. I refuse to believe that the Steins would sell the MONA LISA of Baseball to some one for a quick buck… Also, YES network generates over $500 million dollars a year for the Steins. Why sell when it took them a log time to build this NET Work which permits them to pay for all the players salary and still show a profit each year?. Merchandise sales world wide topped over 2 billion dollars in 2010, not to mention ticket sales, parking and concession money. Also, the NY Yankees are privately owned by the YANKEE HOLDING LLC which includes a 40% stake held by private investors. Since its a private company, its nearly impossible to tell who actually owns that 40%. It would take an IPO of about 15 to 20 billions for this to make any sense. Thats 10 times more than what the Ddgers sale just went for..

      Also, I respectfully disagree with the condition of the minor league system .. The Charleston Riverdogs and Tampa Yankees are stocked with plenty of talent. Damon Oppenhiemer and Mark Newman over the past 5 years have done a better job of selecting the needs for the future of this Great Fanchise. Rome wasn’t built in a day, but I think they finally figured things out in Yankeeland when it comes to drafting. But I can be wrong too..

      My opinion, if they sell, this might be the biggest mistake since Roy Raymond sold Victoria Secerts for 4mm and today is a 6 BILLION dollar company.. By the way, Roy Raymond committed suicide after he sold VS. I hope the Steins jump off the George Washington Bridge if they pull off this bone head move! Makes good conversation and sells papers but that’s all this is Steve, RUMORS….

    3. May 24th, 2012 | 10:33 am

      @ sicilianlou:

      Regarding the Charleston Riverdogs and Tampa Yankees – Low A and A-Ball are a million miles from the major leagues. Anyone who gets excited about prospects at that level is fooling themselves. Maybe 1 in 10 of those players get a sniff of big league play.

    4. May 24th, 2012 | 10:42 am

      The most interesting things about this report to me:

      That closing line about Hal hating the players and the media. If true, that tell you the difference between him and Big Stein. The Boss loved players. He considered himself an ex-jock and a coach. He loved having players. Also, as we know, George loved the media and the spotlight. This is why the son is not his father.

      I heard that Hal went on CNN this AM to deny the story. And, I know that Lon Trost was on WFAN saying that it was not true.

      Me? I figure it’s in their interest to say the story is not true. The minute that people know that you want to sell, you loose leverage and the price goes down. Better to have people think you don’t want to sell and that they will have to knock your socks off to part with something – if you want to get the best price.

      Also, remember, back when all the rumors were out about Cashman having an affair? Of course, when the rumors started, all parties concerned had a no comment or a denial. And, fans of Cashman said that it was all BS rumors. But, then, it time, the rumors were proven to be true.

      Hey, the Daily News would not make something up from zero. There has to be SOMETHING out there on which they are hanging their hat. Maybe it’s thin – but, it’s something. And, let’s give this time…maybe there is something in this rumor? Maybe it just needs time to come to the surface?

      Does anyone know the skinny on the estate tax issue? Is it true when Mrs. Stein dies, the kids are going to get hit with a big bill from Uncle Sam? (I have no idea – that’s why I am asking.) Maybe that’s another reason for the kids to sell?

    5. MJ Recanati
      May 24th, 2012 | 1:09 pm

      Steve L. wrote:

      That closing line about Hal hating the players and the media.

      I just read the article three times and didn’t see the part about Hal hating the players and the media. Can you show me where the article said that because I swear I didn’t see anything that said that. My eyesight might be going into the crapper, it’s certainly possible, but I just didn’t see that.

      Steve L. wrote:

      Also, remember, back when all the rumors were out about Cashman having an affair? Of course, when the rumors started, all parties concerned had a no comment or a denial. And, fans of Cashman said that it was all BS rumors. But, then, it time, the rumors were proven to be true.

      I don’t see the relevance here, unless your point is that all rumors eventually end up being true. If so, there was a rumor in the 60′s that Paul McCartney was dead. Unless I was completely duped, I saw him in concert at Yankee Stadium last July so I’m pretty sure not all rumors are true just because some rumors are true.

      Steve L. wrote:

      Hey, the Daily News would not make something up from zero.

      They wouldn’t? Why wouldn’t they? Stories have certainly been fabricated in the past.

      Steve L. wrote:

      There has to be SOMETHING out there on which they are hanging their hat.

      I imagine that several bankers and MLB executives might’ve had a theoretical conversation about what the Yankees would sell for in light of what Magic Johnson’s group paid for the Dodgers. I imagine that a Daily News reporter decided to take a theoretical discussion of a sale of the Yankees and turn it into an actual, concrete discussion as if it were discussed in all earnestness.

    6. May 24th, 2012 | 1:34 pm

      @ MJ Recanati:Interesting – the line about Hal is gone. I wonder if the DN took it out?

    7. May 24th, 2012 | 1:37 pm

      Yup.
      I just looked at the article.

      Published: Wednesday, May 23, 2012, 10:29 PM
      Updated: Thursday, May 24, 2012, 9:49 AM

      And, I read it at 7 AM when I saw the line about Hal

      I wonder if the Steins made them take it out?

      It quoted a source who said “Hal hates the players and the media.”

    8. May 24th, 2012 | 1:39 pm

      This link still has the quote: http://sportsmediamasters.com/report-steinbrenner-family-looking-to-sell-the-ny-yankees/

      As one of the sources put it, there’s no reason for Hal, Hank, Jessica, the GM of the family’s stable in Ocala, Fla., and Jennifer to hang on to the team other than the prestige of owning the New York Yankees.

      “Hal hates the players,” the source said, “and he hates the media.”

    9. MJ Recanati
      May 24th, 2012 | 1:43 pm

      @ Steve L.:
      OK, at least I know I’m neither going crazy nor going blind!

      Definitely interesting that the article was re-edited to remove that part about Hal. Either it was unattributable and the Yankees raised hell behind the scenes this morning or DN just pulled it because they don’t want to put their beat guys at risk of losing access.

    10. MJ Recanati
      May 24th, 2012 | 1:45 pm

      @ Steve L.:
      OK, in looking at the quote that was pulled, that’s something DN never should’ve run in any credible article. A source that says Hal hates the players and media isn’t good enough. If you can’t substantiate the claim with an actual name then you can’t print something as inflammatory as that.

    11. #15
      May 24th, 2012 | 2:45 pm

      I know some long term NYY org guys. One in particular that I befriended was a long term insider with George. He’d angered a bunch of people over the years because George would go ask this guy what he thought of some highly touted prospect and he would give George his unvarnished opinion, even when it contradicted the org-speak. Although George was largely out of it by then, Montero was one of the guys he didn’t much care for, for example. This guy, who was pushed out late last year, had told me for years that he didn’t see the Stein-kids keeping the team for the long haul. It wasn’t that they didn’t like owning the team, but rather they had other interest that they liked better… hotels, horses, etc… and prefered life in Florida and their other homes, compared to to part time in NYC. He had been around long enough to watch the kids grow up and knows ‘em pretty well. I hope my friend was wrong, and that the win in ’09 left ‘em wanting more. I hope they don’t sell the team. The money involved would be immense, but I think the family instinct to want to win is still there. They may not be as erratic/visible as George in their pursuit of winning, but they want to win. Also, the way they have doubled down on their father’s image, renaming the Tampa facility after George, the life-size plus statue of George outside the field in Tampa, the road into the park is named after George, the enormous bronze in Monument Park, etc… would suggest to me that they have embraced the legacy now that they are responsible for it. On the other hand, everything is for sale at the right price.

      As to picking a time to sell the Yankees if they choose to go that way…. I think macro-economic conditions are a much bigger factor than how many good shortstops they have in the minors. They aren’t selling, and they buyers aren’t buying, particular players. Rather, they are selling/buying a financial machine, founded on generational passions (thanks in no small part to George grasping the value of what he owned… i.e., not just the team at any given moment, but the leagacy of the Yankees), in the heart of the largest market in the country. A printing press to make money when it’s going good and an ego builder when you can win. If they do sell, I hope they sell to an individual (okay, not a Russian oligarch, hopefully), rather than a large public corporation (like, shudder, GE). That would be the quickest way to kill the passion to win.

    12. MJ Recanati
      May 24th, 2012 | 3:18 pm

      #15 wrote:

      As to picking a time to sell the Yankees if they choose to go that way…I think macro-economic conditions are a much bigger factor than how many good shortstops they have in the minors.

      Absolutely correct. Which is why DN’s references to aging players, Rivera’s injury, etc. is absurd.

      #15 wrote:

      I hope they sell to an individual (okay, not a Russian oligarch, hopefully), rather than a large public corporation (like, shudder, GE).

      The Dodgers were sold to a privately-held company (a hedge fund) so I imagine the Yankees, if they are sold, will go to a similar buyer. There aren’t too many people that can pony up $3B to buy the Yankees. I personally don’t think too highly of corporate or non-individual ownership but it’s inevitable that this is where we’re going when you factor in the astronomical leap in baseball valuations over the past two years (starting with the Cubs’ sale for $900M).

    13. sicilianlou
      May 24th, 2012 | 3:39 pm

      @ Steve L.:
      Hmm dont look now Steve, but Austin Romie and Jesus Montero were once Riverdogs!.. I guess 1 millions miles isnt as far away as it once was!

    14. May 24th, 2012 | 4:32 pm

      sicilianlou wrote:

      Hmm dont look now Steve, but Austin Romie and Jesus Montero were once Riverdogs!.. I guess 1 millions miles isnt as far away as it once was!

      Tim Battle, Estee Harris and C.J. Henry played there too.

    15. May 24th, 2012 | 4:36 pm

      MJ Recanati wrote:

      The Dodgers were sold to a privately-held company (a hedge fund) so I imagine the Yankees, if they are sold, will go to a similar buyer. There aren’t too many people that can pony up $3B to buy the Yankees. .

      IIRC, the Steins “only” own about 35-40% of the Yankees. So, the person taking the team over from them would “only have to spend about 35% of three billion – and then make sure that the rest of their partners are “limited” to shares under that percentage (to maintain control).

      Yes, it’s still a billion dollar pricetag – but, at least it’s not the full three.

    16. May 24th, 2012 | 4:37 pm

      I just hope, if they do sell, that the person buying the team understands the Yankees tradition and doesn’t start messing around with stuff like Old Timers Day and their uniforms.

    17. #15
      May 24th, 2012 | 5:37 pm

      @ Steve L.:
      Yikes…. The uniform. How would it look with a big Nike swoosh over the right breast or a Facebook logo on the side of the hat? Start looking like soccer jerseys.

      Interesting point btw, I was talking to an Irish friend… Seems some of the elite euro-soccer teams are also valued in the billions because they own the rights to their own merchandise, rather than pooling it ala MLB. Imagine what the Yankees would be worth if they owned the rights to their own merchandise. I was in Istanbul on business last month and saw a shop with Yankee hats for sale. They might have been bootleg, but there is a market for the logo 1/2 way around the planet and in a culture that doesn’t know a fungo from a fungi.

    18. Raf
      May 24th, 2012 | 6:03 pm

      $3,000,000,000

      That’s $3B written out. The Steins would be dumb not to consider an offer, especially if they’re not really into the day to day operations of the team. And it’s not like they’re dying to sell, either.

      If the Yankees do sell, it won’t be because of the age of the ML team, nor the prospects in the minors. It will be because someone showed up with a suitcase of money. Again, $3,000,000,000 is a lot of coin.

    19. May 24th, 2012 | 7:08 pm

      What took them so long? I expected the family to sell by the end of 2011, posted it here a while back. There is just too much money on the table, and while the individual family members are rich this would make them all individually wealthy. There is a difference.

      Raf is right, it has nothing to do with the talent in the minors and everything to do with the money.

    20. May 24th, 2012 | 10:04 pm

      @ MJ Recanati & Steve:

      That is a brilliant catch finding that. Whatever happened to “we stand by our story?” If the source was so non-credible that they wouldn’t stand by it, then that tells you a lot about the rest of the anonymous sources, doesn’t it?

    21. MJ Recanati
      May 25th, 2012 | 10:31 am

      lisaswan wrote:

      If the source was so non-credible that they wouldn’t stand by it, then that tells you a lot about the rest of the anonymous sources, doesn’t it?

      Couldn’t agree more, Lisa.

      Perhaps in hard news there is value to anonymous sources (like Deep Throat, in the Watergate example, for instance). In sports, especially in today’s 24-hour news cycle where, if you’re not making headlines then you’re not doing your job, I really think anonymous sources are either the writer himself, a buddy of the writer that is just spit-balling, or the bartender serving the writer. Most of these anonymous sources in sports don’t ring true to me.

    22. sicilianlou
      May 25th, 2012 | 10:59 am

      Maybe this really has nothing to do with them selling the club but they are looking at the Tax liability if Mrs. Stein passes?.. Isn’t she the majority holder of the company?. In the state of Flordia, once the husband passes away the estate is passed onto the wife. With a one time tax exemption under Fed tax guidlelines, Mrs. Stein didn’t have to pay Uncle Sam Georges tax bill after he passed away. If Mrs. Stein, passes away the kids are now responsible for the Fed tax left in the trust of the estate. Since Flordia has only Federal income tax and no state or local income tax the Steins are facing a possible tax bill of over 40% of the value of their share of the Yankee Holdings LLC. Maybe all of this was to see exactly what the Yankees are worth just in case this happens? Or maybe they are looking for a minority buyer to help offset the tax cost that will soon be coming their way? On paper the Yankees have to be worth over $3.5 billion. With roughly 55% controling interest held by the Steni’s,

      The Stein kids might have a tax bill come due of 500mm!. IMO, before the Tax man COMETH, better set up the parent company overseas to aviod this payment.. Worked for GE, worked for Facebook and a few other companies why not them?

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