Graph: The Yankees Are Underspending on Payroll

We like to complain a bit here at It’s About the Money about how the Yankees are taking in huge mountains of our money and not putting enough of it on the field. Obviously, baseball is a business (if a weird one that isn’t 100% about maximization of profits; many owners care more about winning than the bottom line), and the owners of baseball teams deserve to make money. That’s why teams that make less revenue spend less on payroll for the most part. Yankee fans don’t expect the Steinbrenners to go broke for the Yankees. I do think they expect to spend in proportion to the revenue the bring in.

Below is a scatter plot of post-luxury tax, post-revenue sharing 2015 MLB revenue (via Forbes) and 2015 MLB payrolls.

PayrollRevenue2015

Assuming a simple linear relationship between revenue and payroll (which is generous to the Yankees, who have similar fixed costs to the other teams, but I won’t get all economicsy right now), teams that are above the trend line are spending less money on payroll than the predicted value given their revenue.… Click here to read the rest

Ninja Cash Having A Monster Offseason

Ninja Cash moves in silence.

(The following is being syndicated from An A-Blog for A-Rod)

Say what you will about how he handles his marital business, but there’s no denying that Brian Cashman has been on a real hot streak over the last couple years as GM.  He has made moves that have made the Yankees better, younger, and deeper as a Major League team and an organization, and has kept them consistently balanced for the present and the future through a combination of aggressive big-dollar signings, smart low-dollar signings, and wise decision making in the trade market, for trades both made and not made.  He’s continued that hot streak this offseason, pulling of a collection of smart moves that few saw coming, and doing it under the first semblance of a real payroll budget.

It seems like it was ages ago now, but Cash’s best move this offseason might very well have been the his first one, the re-upping of CC Sabathia before he opted out and became a free agent. … Click here to read the rest

How The Cuddyer/Willingham Contracts Help Nick Swisher (And Potentially Hurt The Yankees)

(The following is being syndicated from An A-Blog for A-Rod)

Nick Swisher will head into the 2012 season on the last year of his current contract, one that has been incredibly friendly to the Yankees considering the production they have gotten since fleecing Kenny Williams trading for Swish prior to the 2009 season.  In typical Yankee fashion, they have not  discussed a new contract for Swish, instead choosing to pick up his 2011 option and then see where they are after the season.  That could end up working out well for Swish if he has a big year in 2012, but that won’t be known for months.  What is known is that two players comparable to Swish both signed new contracts this past week, essentially laying the groundwork for a starting point to Swish’s new contract.

Josh Willingham took a 3-year/$21 million deal from the Minnesota Twins to replace the departed Michael Cuddyer, who then signed a 3-year/$31.5 million deal with the Colorado Rockies. … Click here to read the rest

Ten Years of Spending | 1990s edition

Much to my delight, I recently stumbled onto an excellent article by THT’s Matt Binder contemplating league spending from 2001-2010. As you’re probably aware, the Yankees’ accomplishments over the past decade tend to reflect quite favorably when compared against the rest of Major League Baseball. After assessing the trends, Matt affirms:

“In each of the past 10 years, the teams that have spent the most on payroll in their division, or the second-most, have made the playoffs 49 times—27 times in the American League and 22 times in the National. During the same time, the bottom two teams in payroll spending have made the playoffs 16 times; 11 in the American and five in the National. … In conclusion, spending a lot of money is [generally] good for your team’s record.”

Given the polarizing nature of MLB’s drastic disparities in spending and the Yankees’ reputation of being the financial juggernaut that continues to exasperate the condition, I thought it’d be fun to repeat Matt’s exercise during the 1990s.

Click here to read the rest

Yankee and Sox Payrolls To Be Pretty Close On Opening Day

The Red Sox have acquired quite a few players this off season. They brought in Carl Crawford, Bobby Jenks and Adrian Gonzalez, and didn’t shed all that much in payroll. The Yankees, on the other hand, have both freed up some payroll space and declined to bring in any big name free agents.

According to WEEI,com, the Red Sox are looking at a payroll of about $155 million next year. However, their luxury tax hit is a lot higher, since the Carl Crawford, Josh Beckett, and other deals are backloaded, and the luxury tax is calculated based on AAV rather than yearly salary. According to that WEEI link, the Red Sox have wracked up an estimated (after arbitration) of $182.33 million. That number could climb to just about $200 million if they lock up Adrian Gonzalez to a big deal.

The Yankees entered the off season with $144 million under contract. I’m not too sure what it is in terms of AAV, but I don’t think there is much of a difference, as Arod, CC, and Teixeira are a the peak of their contracts.… Click here to read the rest

Hal: Payroll To Stay At Same Level

Hal Steinbrenner was just on the radio with Michael Kay, and Marc Carig tweeted an interesting quote from the interview:

Hal on payroll: “I can safely say we’re going to stay at the same level.”

This is important information, as it allows us to gauge how the Yankees will approach the offseason. They started 2010 with a payroll of 213 million, and currently have about 145 million tied up in 16 players. That leaves 68 million available for the club to spend in order to stay at the same level. Assuming Derek Jeter gets about 20M, Mariano Rivera gets 15M, and Andy Pettitte returns at about 10M, that leaves 23 million to fill out the roster, with the only real hole remaining being in the rotation.

This means that while the Yankees will target Cliff Lee, they are unlikely to sign any other big name free agents if they can snag the star lefty. Jayson Werth and Carl Crawford are not going to be Yankees, unless Brian Cashman pulls a “Teixeira” and asks for an expanded payroll due to special circumstances.… Click here to read the rest

Boston's Payroll Inching Upwards

[image title=”153036_brewers_cardinals_baseball” size=”full” id=”15410″ align=”center” alt=”Julio Lugo scores for the Cardinals while being paid by the destitute Red Sox” linkto=”full” ]
NoMaas did a post this morning about Boston’s “little engine that could” attitude and their 2010 payroll, which is slated to be about 170 million dollars. When I first saw that number, I thought that it was mistaken, and that it was simply the luxury tax number, which is based upon average annual value rather than actual salaries. However, Mike Axisa of RAB pointed me towards a Cot’s Contracts spreadsheet that puts Boston at about 166 million before pre-arb contracts are set, meaning they should finish at about 170M. They will almost certainly be paying the luxury tax, and will be forced to consider that when making moves during the season.

With the Yankees coming in at 212M at this point, that makes for a fairly sizable gap of 46 million dollars. However, the Red Sox have closed on the Yankees significantly this offseason, as the 2009 difference was 85 million (207 vs.… Click here to read the rest

Yanks went after Curtis Granderson at the right time

Recently, many have wondered why the Detroit Tigers would spend money on Johnny Damon after they traded Curtis Granderson due to supposed salary concerns. It makes you question whether or not Granderson was, in fact, sent to New York for that reason (maybe there was another issue that forced Detroit’s hand). However, from Lynn Henning of the Detroit News we learn that Detroit likely did trade Granderson mainly for payroll reasons, as the organization had hoped to alter its spending this winter. Henning writes that owner Mike Ilitch, going into 2010, had planned to employ greater budgetary discipline so as to “prune” payroll. The Granderson trade, as well as the decision to not offer arbitration to Placido Polanco, who later signed with Philly, were indications of this strategy. But, as Henning notes, Ilitch has since grown “nervous” regarding the offensive capabilities of his team, and this has led to a “revised” line of thinking. As seen by their interest in Johnny Damon, the club’s stance from December to February has “softened.”

Now that Detroit is seemingly prepared to spend more than they had originally hoped to spend this season, it makes you wonder whether or not the Yankees “got away with one” with the Curtis Granderson acquisition.… Click here to read the rest

Mike Lupica's Failure In Logic Regarding The Budget

I had promised a few readers an article on the PECOTA projections this morning, but will push that until next week because SG over at RLYW has suggested that their math is a bit off, and Colin Wyers has responded that they are looking into it. I will wait until there is more news on that before I discuss it.

Anyhow, Mike Lupica wrote a column this morning so ridiculously devoid of logic that it needed to be addressed. I am going to go at it FJM-style, addressing the most egregious suggestions made by the once-great writer whose opinions have, for the most part, jumped the shark.

The headline is that the Yankees have a budget. We are supposed to believe that this budget is the reason that Johnny Damon goes now. Sure it is.

Now you can take the Yankees at their word, buy this notion that they can’t spend $200 million on baseball players anymore. But if you do, you sort of have to wonder if the team really is rolling in dough, the way we’re constantly told.

Click here to read the rest