The Curse of Jerry Hairston, Jr./Eric Hinske:
 

Wednesday, January 23, 2013

Foxsports: Rosenthal: A Flaw in the Yankees’ Plan?

The Yankees’ benefits for reducing their payroll below the $189 million luxury-tax threshold in 2014 might not be as lucrative as they originally envisioned.

The team would realize one financial incentive by meeting its payroll target — a rollback in its luxury-tax rate from a potential 50 percent to 17.5 percent if it again exceeded the threshold.

But the second anticipated benefit — a rebate in the new market-disqualification revenue-sharing program — might fall well below the Yankees’ expectations.

Under the labor agreement, the 15 clubs in the largest markets will forfeit an increasing percentage of their revenue-sharing proceeds starting in 2013, and become ineligible for any such money by ‘16.

The revenue-sharing funds that would have gone to those clubs then would be redistributed to payors such as the Yankees. The idea is to motivate certain big-market clubs — the Toronto Blue Jays, for example — to increase their revenues, knowing that they no longer would qualify for revenue-sharing money.

From that perspective, the plan appears to be working — the Blue Jays, Washington Nationals and Atlanta Braves are among the big-market clubs that anticipate higher revenues next season, according to major league sources.

Such developments would reduce the size of the market-disqualification pot — and in turn reduce the percentage of that pot the Yankees would receive.

The Yankees anticipated $10 million from the market-disqualification program if they got below the luxury-tax threshold one time and $40 million if they stayed under it from 2014 to ‘16, according to Joel Sherman of the New York Post.

If those figures turn out to be less than the Yankees projected, it would raise the question of why the team acted so diligently to get under $189 million by 2014.

Yankees officials, however, maintain that the team’s offseason strategy has not been influenced by future luxury-tax considerations. They say the front office simply is not enamored with the players on the market.

I might feel better about ‘the plan’ if it didn’t seem to be so poorly, well, planned.  And claiming that their offseason strategy has not been influenced by future luxury-tax considerations seems to fly in the face of all the statements about getting their payroll down to $189M, from Hal Steinbrenner to Randy Levine to Brian Cashman. 

--Posted at 11:20 am by SG / 42 Comments | - (0)

Comments

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Well the rollback in rate only saves them around $10M a year (assuming a $220M payroll which they’ve never gone as high as), and this savings doesn’t seem significant either.

I don’t know why but I always thought the big money was in the deducting stadium payments from revenue.  I don’t know if that is tied to payroll, but I always thought it was and that it was by far the biggest contributor to the savings they would get by dropping to $189.

I’ve been wondering for a while if $189 is being used as an excuse to make the team more profitable, letting the Steinbrenners pocket a lot of extra money. Now I’m starting to believe it. I had assumed the revenue rebate would be much larger than even $10 million per year.

To be fair, most reports have been that the family has been pretty close to breaking even on the Yankees for a long time now and that they way they have been making money has been by increasing the value of the franchise, which isn’t liquid.  Now that is just the Yankees, that doesn’t include things like all the vending/concession money, the percentage profit they get from the YES network, so it isn’t like they are cash poor, but they have been putting pretty much every penny back into the team.  Scaling that back a touch and still having the largest payroll (except for now the Dodgers) isn’t unreasonable.  I know we’ve become a little spoiled, but the attitude that they owe us every last dime is kind of an unfair expectation. 

They should still be able to put a championship team on the field with $189.  Maybe not in 2014, but at some point.

I think it’s possible that Hal Steinbrenner is feeling the sting of the ARod contract, is looking to take a more efficient and conservative approach to player contracts, and is using the new luxury tax threshold as a line in the sand to force the change.  That getting under the new threshold would happen to save them some undetermined amount of money is just a bonus, an added motivation, but ultimately the austerity is part of a long-term strategy to make the team on the field better, by forcing the team to focus on player development and the like.

Of course it’s possible that this is just a greedy money grab for a team that may not “owe us every last dime,” but given the cost of tickets, the tax breaks in building the stadium, etc., the Steinbrenners do owe the people something.

If those figures turn out to be less than the Yankees projected, it would raise the question of why the team acted so diligently to get under $189 million by 2014.

Well, they’re being so diligent because they’re projecting X, and X is a big number.  If Y (actual) comes in well below X they need to go back and evaluate why they projected wrong.  But wouldn’t it have been worse if they projected X (big number), weren’t diligent about getting under the payroll (if it’s less than X may not be worth it), and then have Y ending up being twice X?  Especially if Y is now much larger since Yankees aren’t getting rebates…and Red Sox are getting more?

[4] Well, none of us really have any idea why the Yankees are doing what they’re doing.  Or if they even mean to stick with it in 2014 or beyond.  Bob Watson - I think a NY Post article - said that while he doesn’t know Hal well, he doesn’t believe for a minute that if Boston and Toronto are well ahead of the Yankees come 2014 deadline, that Hal will tell Cashman he can’t go over $189M to acquire players to change the outcome.  Who knows?

But I do know that the Yankees spent a lot of money acquiring a lot of big names in the late-80’s/early-90’s, and for the most part got nothing to show for it.  They got successfull and truly started rewarding the fans by sucking for several years, not trading away youth, and building a solid core of young players (with lots of others who could fill utility roles or be traded) to add players through trade/FA.  Now, I’m not advocating they finish at/near the bottom of the division for a few years.  But if they play a 23 year old who projects to be 1 WAR in year one (hope to grow to 3-4 WAR in year 3) instead of giving a veteran a 3/30 deal who projects to 2 WAR…well, I’d rather they do that for a few years.

You were singing a different tune when they cut Chris Dickerson and gave Ichiro, who has averaged 1.5 WAR the past couple years, $13 million over two years.

[7] Zing.

It’s interesting, isn’t it, that for some fans of any franchise, part of their fandom is maintaining a public stance that the team’s management makes smart and strategic decisions, even if it means inconsistent standards.  Meanwhile other fans root for the team even while thinking the front office can’t get out of its own way. 

Well, I find it interesting.

My famdom has no dependency on management’s actions.

But I would like to see them assign Joba and Puke as roomies.

What team are we switching allegiance to again?  Sorry Pin, it just can’t be Seattle, Jack Z is too damn dumb and the team is going to stink.  Nats?  How about Toronto, they should be good and it’s a fun town.

I think it was the Dodgers. Like flies to a payroll.

It’d be a good April Fool’s prank…give us all Dodger logos.

Conveniently, April Fool’s is Opening Day.

Dodgers have the Mattingly connection too.  The only problem is that whole pitchers hitting thing, and the West Coast time slot.  And just because they are spending the most money, they are spending it stupidly and they may not even be all that good.

Maybe we should just root for the team that projects to win the most games every year.  We’d have been 2011 Red Sox fans…

I’m not sure we are allowed to complain about spending stupidly until A-rod comes off the books at the end of the century.

[14] I’m OK with being a Nats fan this year.

Too many RS players on the Dodgers to root for them.

I couldn’t root for a team with Josh Beckett on it.  Maybe not even the Yankees.  Did I actually just write that? 

I still like Carl Crawfish.  During his brief tenure in Boston he seemed to be overwhelmed by the malignancy of the environment. 

I could go for the Nats too.  They have a lot of young dynamic talent.

The Yankees apparently considered Delmon Young.  I doubt the vocal antisemite would have fared too well in the Bronx.

Mel, did you ever read “The Jew-Bird” by Bernard Malamud?

‘“Who did it to you, Mr. Schwartz?” Maurie wept.

“Anti-Semeets,” Edie said later.’

[19] Someone in Amaro’s family is Jewish, so Delmon Young is good to go. Plus, he consulted a few rabbis just to be certain. I’m sure there are some Jewish people in the Yankees management structure that would have him a pass. As long as one person is okay with it, the whole community follows. Isn’t that how these things work?

The old “I have a ____ friend, so I can’t be racist” argument..

So….the team that taught me how to think fiscally, may not be very fiscal?  Ive known some girls like that

Is fiscal an adjective?

[21]  Yes, this is why I’ve been careful to make one friend from each racial and ethnic group.

Yes I have read The Jewbird.  Read quite a bit of Malamud.

colin is totally meshugenah.  Plus he’s my doctor.

Looking like Justin Upyours may be headed to the Braves.

I hope you guys like radiologists.

No Kottaras.

We may have to settle for Telly Savalas.

[28]  What’s not to like?

[29]  Where’d you see that?

Yeah, it’s going up on the various Yankee news blogs that the Yankees are not interested. Not even that he wants to go somewhere else, but that they’re not interested. Kind of odd.

Maybe he has catarrh or can’t play guitar.

Kottaras is a bridge too far for us.

With the lack of interest the Yanks have shown in the catcher position this offseason, I’m beginning to think their plan is to let the ball roll to the backstop and then go pick it up, this freeing up payroll because it will allow them to carry only 23 players on the roster.

[36] And it will encourage Yankee hurlers to pitch to contact.

Ugh.  I even feel crazy.

Another advantage of robot umpires: they won’t need a catcher to stand behind when no one is on base.

[31] Hell if I know, I don’t know any.

Edit: I know one and shes pretty chill.

I’m beginning to think their plan is to let the ball roll to the backstop and then go pick it up, this freeing up payroll because it will allow them to carry only 23 players on the roster.

That’s crazy.  They just need to set up a piece of plywood behind home plate.  That’s what we used to do when we played pickup games.

[41]  This just in: Yanks offer piece of plywood 3 years, $27 million, including opt-out clause after year 1.

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