• Has The Evil Empire Become A White Elephant?

    Posted by on December 6th, 2012 · Comments (12)

    Yeah, I hate to get all Larry Lucchino and John McGraw here. But, have the Yankees, as we expect them to be, become an expensive and unprofitable dignity to support under the current rules of Major League Baseball because of baggage on their present roster? What do you think?

    Comments on Has The Evil Empire Become A White Elephant?

    1. MJ Recanati
      December 6th, 2012 | 1:19 pm

      Unprofitable? Really?

    2. G.I. Joey
      December 6th, 2012 | 1:36 pm

      @ MJ Recanati:

      Steve must be “unskewing” the Yankees income statement which shows that they are actually in the red? LOL

    3. December 6th, 2012 | 1:58 pm

      Unprofitable in the sense that, under the new rules, they cannot operate with a $200 million payroll like they used to…

    4. MJ Recanati
      December 6th, 2012 | 2:12 pm

      Steve L. wrote:

      Unprofitable in the sense that, under the new rules, they cannot operate with a $200 million payroll like they used to…

      Unprofitable is not the correct term. The Yankees will continue to make a profit even if their payroll is upwards of $300M per season.

      The new rules place a clear incentive to repeat luxury tax payors such as the Yankees to get under the $189M tax threshold in order to effectively “reset” their tax rate in the 2015 season. Thereafter they can go back to a $200M+ payroll if they choose to do so, because the luxury tax burden will have been reduced from 50% to 17.5%. Whether they will return to $200M+ payrolls in 2015 is not something any of us can predict or presume to know. But the notion that the Yankees are operating under a permanent “salary cap” (as many have written) is simply not factually accurate.

    5. Raf
      December 6th, 2012 | 2:56 pm

      MJ Recanati wrote:

      Unprofitable is not the correct term. The Yankees will continue to make a profit even if their payroll is upwards of $300M per season.
      The new rules place a clear incentive to repeat luxury tax payors such as the Yankees to get under the $189M tax threshold in order to effectively “reset” their tax rate in the 2015 season. Thereafter they can go back to a $200M+ payroll if they choose to do so, because the luxury tax burden will have been reduced from 50% to 17.5%. Whether they will return to $200M+ payrolls in 2015 is not something any of us can predict or presume to know. But the notion that the Yankees are operating under a permanent “salary cap” (as many have written) is simply not factually accurate.

      Exactly. With that said, the Yanks can still run a 200M payroll, and take the luxury tax hit and STILL make a profit if they chose to. Just like they can still make a ton of $$ if they reduced ticket prices to pre 2008 levels. But they choose to go in their current direction for any number of reasons.

    6. December 6th, 2012 | 3:05 pm

      Still make a profit, but, not as much of a profit…at all.

    7. Raf
      December 6th, 2012 | 3:12 pm

      Steve L. wrote:

      Still make a profit, but, not as much of a profit…at all.

      They just made a buttload of money from Fox, they still have YES, MLB has also signed a huge money deal with Fox, Turner and ESPN of which the Yankees will get their cut.

      They’ll be fine :)

    8. #15
      December 6th, 2012 | 3:55 pm

      I need a summary at this point, and someone to tell me what I’ve got wrong.

      Trying to get to 189 Mil for 2014.

      Big salaries coming off after 2013:

      Mo ~ 15 Mil
      Andy ~ 11 Mil
      Granderson ~ 13 Mil
      Burnett ~ 10 Mil(?)
      Kuroda ~ 12 Mil

      Call it ~ 60 Mil to play with.

      Jeter’s 2014 is at ~ 9 Mil (very reasonable – they’d probably pay a lot more if he were a free agent with last year’s stats), A-Rod’s is ~ 25 (gughh), Tex ~ 22(?)(too much), CC ~ 22 (I’ll let you know in a few months). And they’ll probably be paying Robbie ~ 17-18 (?)…. Call it 100 Mil tied up in these 5 players. So ~ 90 Mil for the other 20.

      For 2014…. Let’s be optimists and say, Nova, Pineda and Phelps (or some other low cost combination) all round out. Hughes will either cost more than today or be gone. In addition to CC and the guys that play around the horn….Probably going to need a closer, a starter, a catcher, and two outfielders, and likely a very reliable set of back-ups at short and 3rd.

      Seems like 2013 is up in the air. 2014 will be a bad year. 2015 and beyond… The Empire strikes back.

    9. December 6th, 2012 | 3:59 pm

      It is going to be VERY INTERESTING to see what the Yankees roster will look like, and how good the team will be, in 2016.

    10. MJ Recanati
      December 6th, 2012 | 4:58 pm

      @ #15:
      @ Steve L.:
      No point wondering what the 2014, 2015 or 2016 teams will look like because there are so many variables between now and then.

    11. Raf
      December 6th, 2012 | 7:19 pm

      MJ Recanati wrote:

      @ #15:
      @ Steve L.:
      No point wondering what the 2014, 2015 or 2016 teams will look like because there are so many variables between now and then.

      Yep. We’ve been down this road before… It’s like “Groundhog’s Day” here sometimes :P

    12. December 6th, 2012 | 9:05 pm

      I think the Yankees are making money hand over fist. The problem here is strictly a problem for the fans. A long difficult journey has begun, the Steinbrenners are looking to get out and selling the cash cow that is the Yankees is going to be a long drawn-out affair. There are four children, grandchildren and George’s wife. There are the many different pieces that make up the Yankee universe, and there is the need to get top dollar. The kind of money it’s going to take to put this deal together doesn’t grow on trees, and the interests of all the parties are I’m sure more complex than any of us can imagine. While all this is going on the on the field fortunes of the club will take a backseat. A media giant (Fox) buys into the Yankee universe while a family looks to get out (Steinbrenners), where have we seen this before, (think CBS and Dan Topping). Straight ahead I fear, 40 miles of very bad road, buckle up.

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