• Yanks Spend With The Hope To Make More $

    Posted by on December 5th, 2013 · Comments (4)

    Via Brian Costa

    When the Yankees announced their $85 million signing of catcher Brian McCann earlier this week, owner Hal Steinbrenner cited the team’s “singular and unwavering desire” to play deep into October. That desire likely will be mentioned again when the Yankees announce their seven-year, $153 million deal with ex-Red Sox outfielder Jacoby Ellsbury in the coming days.

    But a look at the Yankees’ finances reveals that a lust for trophies isn’t the only thing fueling this free-agent splurge. When the Yankees fail to make the playoffs, as they did in 2013, their revenues plummet.

    Proceeds from ticket sales and stadium suite licenses alone totaled $295 million through Sept. 30 this year, according to public records reviewed by The Wall Street Journal. That is down from $353 million in 2012, $377 million in 2011 and $384 million in 2010, the records show.

    The figures appeared on financial statements the Yankees are required to file with the city to demonstrate their ability to make payments on the bonds used in the construction of Yankee Stadium. Attendance represents just one of the Yankees’ revenue streams, but it highlights the enormity of the financial incentives for the team to make the playoffs.

    People with knowledge of the team’s finances said the drop-off from 2012 is almost entirely a result of the fact that they missed the playoffs for the first time since 2008.

    Had the Yankees failed to reach the playoffs in 2012, their ticket and suite revenues would have been closer to $300 million rather than $353 million, the people said. Similarly, in 2010 and 2011, postseason games accounted for $59 million and $58 million of all such revenues, respectively.

    In other words, a Yankees team that wins 93 games and makes the playoffs brings in about 15% more ticket and suite revenue than a Yankees team that wins 88 games and misses the playoffs. And that is to say nothing of the boost in merchandise and concession sales and next-year ticket sales.

    “What this clearly shows is that the Yankees’ whole financial equation is built around winning,” said Vince Gennaro, author of “Diamond Dollars: The Economics of Winning in Baseball” and a consultant to major-league teams. “If you take that away, they become mere mortals from a financial standpoint.”

    And, what happens if the Yankees win <88 games for two years in a row?

    Comments on Yanks Spend With The Hope To Make More $

    1. #15
      December 5th, 2013 | 5:31 pm

      “And, what happens if the Yankees win <88 games for two years in a row?"

      Well then the Cashman situation should finally clear itself up.

      If Cano signs (and I think he will) and if Kuroda signs (not sure, but hopeful), with McCann, Tex, and Ellsbury in the line up, and Jeter likely an upgrade at the plate over the 2013 SS's… I think we are easily 5 games better. Another way of saying it… What Yankees are going to have worse years than 2013? Kuroda could be a hole, Cano too, and Mo and Andy are gone (but then so are Hughes and Joba!). We are starting the season better in the outfield, much better at first base, and much better behind the plate… Is Pineda at least as good as Hughes? Sure. Maybe a lot better. I think there are several guys that can meet that low bar. We'll have more Soriano and less Vernon Wells, another plus. CC circa 2013 is not that hard to improve over, even without being the old CC. A great team? No. Playoff contender… Likely.

    2. Greg H.
      December 5th, 2013 | 6:38 pm

      @ #15:
      It was a good article and this is an accurate post. The pitching could get dicey if the breaks fall the wrong way, but if they get Kuroda back, it’s a good beginning. I would add that no matter what we couldn’t get much worse at 3rd than last year. Even Nunez all year would probably be an upgrade. Cano will be interesting. I’d like to see him back, but at the Yanks’ price, not his. If he can stand Seattle for ten years and tons of money, bless him and don’t let the door hit his ass.

    3. redbug
      December 5th, 2013 | 7:26 pm

      To me, it’s not whether the Yanks make the playoffs or not. It’s whether I like the players and want to root for them or not. They’ve lost a lot of my favorites during the last few years. I like some of the current staff, am really glad Jeter will be back. But, I’ll have a very tough time rooting for them if Arod returns.

    4. Kamieniecki
      December 5th, 2013 | 10:01 pm

      #15 wrote:

      I think we are easily 5 games better. Another way of saying it… What Yankees are going to have worse years than 2013?

      This pitching staff, in its entirety, is a huge question mark to say the least. Who will be the closer? The primary set-up man? Where will Logan be pitching? The closer, primary set-up man, and primary left-handed relief specialist all might have worse years than 2013.

      And then there’s the starting rotation: Sabathia is in decline, Tanaka might not even be posted this year, and Kuroda, if he is signed, will be 39. So the nos. 1-3 starters might have worse years than 2013. Garza will be very expensive.

      And if Cano accepts a $210-30 million offer from Seattle, forget it. Cano’s departure negates McCann’s production, and Jiminy Ellsbury is a 30-day D.L. stint waiting to happen.

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