The Super Yankees Theory

With another Yankees World Championship comes another round of salary cap debate. The Yankees have an infield that costs a gaudy amount and easily make the most revenue of any other team. The idea of implementing a cap limits how much they can spend on free agents or absorb via trades, which seems to make the playing field a bit more even. But there’s a forgotten aspect to all of this: If you limit the Yankees Major League payroll from $200M to $100M (or whatever) without imposing a cap on the amount of money a team can spend on amateur and baseball operations talent, then really you aren’t helping anyone but the Yankees.

Why? Because if you knock that $50M off the Yankees payroll, that doesn’t mean they cannot spend it; instead, it simply means they must reallocate it to another part of the game. Now they can really go over-slot on a consistent basis. Or, if a hard-slotting system is imposed, they can reap the international talent market like none other. Not to mention the amount of front office talent they can add to the fold — ranging from scouts to quantitative analysis guys to medical staff and so on.

Living off free agency is usually a poor habit to fall into, because when signing a 30 – 32-year-old player, teams are paying for his past performances more than his future performances. By eliminating that practice for the Yankees, they can quickly develop the best farm system, player development, and front office staffs around and still have money to burn. Then, when those young players turn into young stars under a cost efficient umbrella, the Yankees can go out and do their spending thing on the free agent market with a bunch of homegrown studs intact.

You could argue they could do this already, but won’t for whatever reason. Maybe they haven’t realized it, or they would rather bank off the big-time free agents. I don’t know. This may result in fewer wins in the short-run, but a healthier organization in the long-run. Baseball would actually be doing the Yankees a service by saving them from themselves.

Perhaps that’s a wee bit hyperbolic, but the answer to any question about baseball’s competitive nature and balance lies beyond a Major League roster salary cap.




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104 Responses to “The Super Yankees Theory”

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  1. Tom B says:

    i like this. combined with rev-to-payroll the next person that brings this up has no chance! :)

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  2. Fallacy of the slippery-slope…
    Besides that, agreed!

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  3. Sam says:

    The are in many ways doing this already. Compared to where it was four years ago, the Yankees farm system has improved ten fold. Though they may not have had stellar big league careers, Joba Chamberlain and Phil Hughes will soon be above average big league pitchers. Young Austin Jackson was voted the second best International League’s (AAA) most exciting outfield prospect this season behind Daniel Mccutchen who has already graduated to the big leagues. Brian Cashman has already seen the light. Not a single team in this day and age has any desire to live off free agency. And the Yankees have already felt the sting of trying too, as seen through the past years. This post is abut two years too late.

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    • Raf says:

      The thing is, the Yanks are doing the same thing they’ve always done. Instead of bringing in guys like Spike Owen, Danny Tartabull and Kenny Rogers, they brought in guys like Teixiera, Sabathia and Burnett.

      Instead of taking on salaries of guys like Reuben Sierra, Cecil Fielder, Tino Martinez/Jeff Nelson and David Cone, they take on salaries of Bobby Abreu, Kevin Brown, and Alex Rodriguez.

      Them being players in the Int’l market isn’t some recent phenomenon. Their Panama connection netted them guys like Roberto Kelly, Rafael Medina, Ramiro Mendoza, Mariano and Reuben Rivera. I remember them signing Kats Maeda out of Japan in the early 90’s, Hensley Meulens was signed out of Curacao in the 80’s. So on and so forth.

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  4. RKO36 says:

    You can implement a cap and a floor, but it doesn’t mean an inept front office like Pittsburgh will suddenly turn around and field a winning team.

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  5. HCrumb says:

    You could argue they could do this already, but won’t for whatever reason. Maybe they haven’t realized it, or they would rather bank off the big-time free agents.

    The yankees had roughly 12-14 homegrown players on their roster over at any one time throughout the majority of this past season. Up to 8 out of 12 of the pitchers on their roster were homegrown and that was with Wang hurt.

    That is one one of the highest number of internally developed players of any team in baseball.

    That is a much higher percentage of home grown players than either the Red Sox or the Rays played with this season.

    The yankees spend a oodles of money on players but the idea that they still don’t develop talent internally is a myth.

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    • MarkInDallas says:

      You are correct. They have developed some very good players – Jeter, Rivera, etc. But so have most teams. The difference between the Yanks and others is that when they get a great player, they are able to keep them no matter what the cost.

      How many of their actual regulars are in their first 6 years of service? Cano and Melky, right? That’s one above average and one average player.

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      • HCrumb says:

        You are making a point not related to the comment I was responding to.

        And most teams have never internally developed a core set of players at one point in time like that ones that have anchored the yankee teams since the 1990s. Not even close.

        Finally, you’re right on the position players (with Brett Gardner being the 4th outfielder as well). But you left out the pitching staff. As I said – up to 8 of the 12 pitchers this year were internally developed with two – Rivera and Pettitte being from the “old guard.” The yankees pitching staff had a huge number of internally developed pitchers with less than 6 years service time. Half the staff was made up of that kind of player for long stretches of time.

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      • MarkInDallas says:

        How many of the new guard pitchers pitched in the World Series? I know Joba did, but I’m not thinking of another. Anyway, you just can’t compare those new Yankees to the old guard Yankees that you mentioned. The Yankee pitching staff was a huge weakness of the team that was hidden by the strong top 3 starters.

        Anyway, I’m not bashing the Yankees for not developing their own players. They trade away a good portion of their marginal talent that could end up blossoming (Ohlendorf and Tabata) for proven veterans.

        That’s OK. As a Pirate fan, I’m not complaining about it. I’m just pointing out that the Yankees are able to keep the cream of the crop that they developed over 15 years, whereas the majority of teams can only keep a Jeter or Rivera for 6 years.

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      • Tom B says:

        Mark you are confusing those teams willingness to keep franchise players with their ability to keep them.

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      • MarkInDallas says:

        All teams have the equal chance at will. Few teams have an equal chance at ability.

        Texas wanted to keep Teixeira. Seattle wanted to keep ARod. Cleveland wanted to keep Sabathia.

        None had the ability that the Yankees had to keep Jeter.

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      • delv says:

        Concerning the homegrown pitching of the Yankees:
        Phil Coke, Dave Robertson, Phil Hughes, Joba Chamberlain, Alfredo Aceves.

        …And Damaso Marte came in a trade, but was originally from the Yankee system.

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      • Tom B says:

        yes, but in the situation where there would be a floor/cap for all teams, those teams would STILL have to pony up the same amount of money to keep those players. and they STILL won’t. someone has to spend that money, and if the Yankee’s are spending it, what team’s are picking up the extra $100mil in payroll that the players will be demanding?

        i really can’t feel sorry for any team that spends less than 55-60% of its revenue on their payroll. take the brewers last year. if they increased their payroll % to the same % of the yankees last offseason, they could have paid CC $5mil more than the Yankees are.

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      • MarkInDallas says:

        Tom, as I recall, the Yankees have a total revenue of $500M. Their payroll is 40% of that.

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      • Tom B says:

        It was 327 last year, you can check forbes.

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      • Tom B says:

        and it looks like early reports are 375 this year

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      • The Typical Idiot Fan says:

        Tom,

        I’d be very suspicious of those numbers.

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      • Robbie says:

        Tom, you think if Mark Teixiera wants X million, and the Yankees don’t have the cap room for it, and no one else will pay it, then he’ll just not play?

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      • Tom B says:

        OK, my original % guess was off. Instead of speculate, i took about 15 minutes towork this up. I apologize if this is huge and annoying to everyone.

        I built this off of old data as obviously the 2009 season rev$’s are not public knowledge. This is based on Revenue data from Forbes and the very publicly available Payroll data from MLB for 2008.
        The columns are Team, Revenue in $millions, Payroll in $millions, and the % of Revenue spent on payroll.

        Team Rev(in $mil) Payroll(in $mil) % of Rev to Payroll
        NYY $375 $209 55.73%
        BOS $269 $133 49.44%
        NYM $261 $137 52.49%
        LAD $241 $118 48.96%
        CHC $239 $118 49.37%
        PHI $216 $98 45.37%
        LAA $212 $119 56.13%
        CHW $196 $121 61.73%
        SF $196 $76 38.78%
        STL $195 $99 50.77%
        HOU $194 $88 45.36%
        SEA $189 $117 61.90%
        DET $186 $137 73.66%
        ATL $186 $102 54.84%
        WAS $184 $54 29.35%
        CLE $181 $78 43.09%
        COL $178 $68 38.20%
        ARI $177 $66 37.29%
        TEX $176 $67 38.07%
        SD $174 $73 41.95%
        BAL $174 $67 38.51%
        MIL $173 $80 46.24%
        TOR $172 $97 56.40%
        CIN $171 $74 43.27%
        OAK $160 $47 29.38%
        TAM $160 $43 26.88%
        MIN $158 $56 35.44%
        PIT $144 $48 33.33%
        KC $143 $58 40.56%
        FLA $139 $21 15.11%

        This doesn’t count revenue sharing dollars that the bottom teams receive, or the dollars that the top teams spend on it to my knowledge. Even if the numbers aren’t 100% accurate they are enough to prove a point.

        Some teams are just way, way below a level that I would consider appropriate for a Major league franchise to attempt to compete.

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      • hateraid says:

        Tom you also dont take into account the luxury tax i forget which teams pay it this year

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  6. tyrone says:

    “You could argue they could do this already, but won’t for whatever reason.”

    My impression (up until now, anyway) is that they do. Or at least they have done it more often and/or better than the rest of MLB. Rivera, Cano, Melky Cabrera, Matsui, Wang, Contreras, El Duque…these guys were all signed as undrafted international free agents. I don’t know much about the international scouting networks each team has, or how much they cost to maintain, and I don’t know how much money each team spends on international scouting and signings, but I’ve thought for a while now that the Yankees have done quite well using their financial advantage internationally. That impression is not really based on anything solid though. Are there figures on this somewhere?

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  7. MarkInDallas says:

    I think one solution to the power of the Yankees is to place at least one more AL East team in New York. Like in Brooklyn.

    That way you can dilute the dollars spent around New York and increase baseball interest in New York at the same time.

    The problem with the free market argument in favor of allowing the Yankees so much power is that a sports league is a semi-monopoly that caps competition. New York is actually under-represented with baseball product and that’s why the Yankees can make so much money in the first place.

    New York could probably support 4 teams with a 20 M market population.

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    • Tom B says:

      or they could just stop putting teams in markets with less than 5million people! Then the talent wouldn’t be so diluted.

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      • MarkInDallas says:

        That’s a good idea. That would only leave 13 teams and about 10 cities in the league and that would definitely improve the quality of play.

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      • Tom B says:

        this is a worse idea than 4 teams in one city?

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      • MarkInDallas says:

        New York had 3 teams for years. Did it kill baseball because Brooklyn had a team?

        What I’m saying is that if you left it to the free market, New York probably would have 4 teams. And New York for sure could support 3 teams. It did for years and the only reason they left was because Robert Moses did not allow them to have the real estate they wanted to build a new stadium. It had nothing to do with New York not being able to support the Giants and Dodgers.

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      • Tom B says:

        yeah but re-introducing a team back into that would be a mess. where are the fans coming from? do you think that there are that many people in NY that don’t like the Yankees or the Mets, but still want to watch baseball games?

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      • wally says:

        So, in say, 10 years time, a 3rd team in NY (or LA for that matter) would be worse off than the Marlins, Pirates or Royals? I doubt it. It would be a rough transition sure, but it would be in the best long term interests of the league.

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      • Raf says:

        That was the case with the Dodgers, the Giants were already looking to move to MN as they were doing poorly @ the gate.

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    • Met fan says:

      Yeah, I’ve always thought that, too. NY had 3 teams when there were only 16, and they were arguably the best 3 teams at winning their leagues (though the Yankees cleaned up most of the WS). Putting the Rays in northern NJ would help. Those Yankee fans might not switch immediately, for obvious reasons, but they would build a fan base eventually, and hopefully the payrolls of the three teams would even out eventually. This is why, even though I am disgusted with the Yankees’ spending, I do see some value in not having a salary cap– because the teams with higher payrolls have them because they have more fans (and therefore more joy is created when they win). But they Yankees are the anomaly and the obvious answer would be to chop off a big chunk of their fanbase somehow.

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      • MarkInDallas says:

        Moving the Rays isn’t really an option now because they are building a new stadium. I think every city that has a team right now has the ability to support a team.

        I also am not for a salary cap, because it’s inevitable that there are going to be inequities and when you have a small market team, sometimes you are going to have to rebuild for whatever reason. Many times you just didn’t draft well, like the Pirates. That has nothing to do with not having the money. Look at the Mets. They are a disaster and they got tons of money.

        But I’ve got no doubt that Brooklyn would support a team and that it would be pretty popular. Brooklyn has the baseball history and its own flavor apart from the image that the Yankees have.

        A team in Brooklyn would actually grow baseball interest in New York and putting them in the AL East would be awesome because they would play each other in New York many times a year.

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      • Tom B says:

        I know it seems easy to say that from outside of new york, but dodgers fans are all in retirement homes. i can see some mets fans switching over, but yankee fans? we already root for the greatest franchise in the history of sports, why would you leave that? :)

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      • Met fan says:

        Well, to reply to you too–and this is basically just chit chat at this point– I guess you’re right about the Rays (I just said Rays hypothetically; it could be whatever team wants to move next, and of course it’ll happen again).

        Northern New Jersey would be a much better location than Brooklyn. Having a team west of the Hudson would make it easier to claw away fans than it would be on Long Island, where Brooklyn and Queens are. It’s more of an untapped market at this point– but of course it would be hard because all of those people already have chosen a team.

        Basically, moving the Giants and Dodgers was a disaster, and we’re still feeling the consequences (in the Yankees’ payroll).

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      • Raf says:

        Moving the Dodgers certainly wasn’t a disaster for the O’Malleys

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      • Anthony says:

        The Yankees wouldn’t lose fans though if you insert a new team in Brooklyn, I think the Mets would lose fans. It would take an extended period of not making the playoffs for the Yankees to lose fans. I have already heard many Mets fans who are ready to give up on their team. They have been waiting a long time and spending so much on a team that just never seems to have it. So there you take away mostly Met money and instantly undercut one of the only teams that can come close to the Yankees in spending currently.

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  8. brian recca says:

    how about a slotting system and an international draft? that covers those two problems. I would rather have the Yankees spend tons of money on their scouting department then the actual product on the field.

    I am a major promoter of a salary cap and a salary floor to help balance the playing field. Not only will it help balance the rich teams but it would either make the lower spending teams actually spend their money or get out of the league.

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  9. Jacob Jackson says:

    I think the solution is a “super tax,” similar to what the NBA is considering in their next upcoming CBA. The current 25/40% tax penalty remains in place for team payroll above, say, $130 million. But at $150M, the tax becomes a “dollar for dollar,” 100% super tax.

    The Yankees would have to give great pause for every dollar spent over $150M. Carrying a $210M payroll, as they do currently, would cost them over $300M dollars.

    Obviously the exact figures are fungible but the super tax is the most logical, least invasive approach IMO.

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  10. Dan says:

    I love this website, but this post is not right.

    First, there just aren’t good major league players in any draft for the Yankees to do anything but waste money giving millions of dollars to the 30th and 60th and 90th etc. player in the draft.

    Second, the Yankees, at least under Brian Cashman, are not that good at player development. While they may have a number of home grown players, only two starters (Cano and Cabrera) were developed under Cashman. And their farm system is middling at best.

    After the first half dozen to a dozen draft picks, there just isn’t enough obvious talent left to gain a significant advantage doing this. The Red Sox, whose management strength in fact does lie in the drafting and developing of players, and who are aggressive at signing picks in later rounds haven’t been able to use this strategy to do any more than give themselves a competitive farm system. There is more value in having one of the first five to ten picks than what can be achieved drafting after that no matter how many resources you have.

    I support greater revenue sharing and efforts to fix disparity, but the draft is not the source of disparity. Good, rich teams are not having the opportunity to draft the top talents (bad, rich teams do). Hard slotting will only hurt teams that are smart, not teams that are rich.

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    • Tom B says:

      if the yankee farm system is so “middling” why do they so consistently win AA and AAA titles?

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      • Paul Thomas says:

        You can’t be serious.

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      • quincy0191 says:

        I…what…wow. My Giants have the best winning percentage among their minor league affiliates out of all MLB teams and our farm system isn’t great. It’s pretty much Posey+Bumgarner+a bunch of totally average prospects.

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      • pounded clown says:

        “if the yankee farm system is so “middling” why do they so consistently win AA and AAA titles?”

        i tried to come up with something snarky for this but I couldn’t do a better job than the quote itself

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      • Tom B says:

        i guess it’s better to learn to play ball by losing then…

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      • pounded clown says:

        “i guess it’s better to learn to play ball by losing then…”

        look he’s at it again….

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  11. Dan says:

    Oops,

    I meant not ENOUGH good players . . .

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  12. R M says:

    They have so much money it really doesn’t matter. It’s not like they skimp on minor league scouting to begin with. Plus, how many prospects pan out? Especially 16 year old Latin Americans? There’s no way the Yankees would be able to replace a Mark Teixiera or a CC Sabathia with the extra money they would have to spend on scouting.

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  13. Logan says:

    This was an interesting article, but not really thorough enough.

    “Perhaps that’s a wee bit hyperbolic”

    I’d say so. More than a wee bit.

    “the answer to any question about baseball’s competitive nature and balance lies beyond a Major League roster salary cap.”

    Great. Like…

    Can we get Dave Cameron on this issue? Stat!

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  14. Robbie says:

    Maybe I’m silly, but I just assume that most people don’t think baseball should just put in a simple cap and call it a day.

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  15. shiloh says:

    “Middling” farm system?

    Wait until 2011 (2012 at the latest) when Jesus Montero is the new Yankee DH. How often does any franchise develop a young power hitter? That’s the rarest of minor league talents, to hit for power and average. Montero has shown every indication he can do both, and he has done it at every level so far. And he turns 20 years old next year.

    By 2012, Austin Romine should also be sharing the starting catching job with Frankie Cervelli. Romine was Player of the Year in the Florida State League in 2009. He’s a strong defensive catcher who hits enough, and has power.

    Posada has two seasons left, and will do a lot of DH work as his defensive skills have fallen apart of late. The timing is just about perfect for these three young players to fill a huge hole for the current Yankees. Cervelli helped the big club enough this year to earn a ring. The others are on their way.

    As a Yankee fan of 55 years standing, watching the young kids come up is still the most fun. Screw the FA signings. 13 of 27 key players this year were homegrown. And more are on the way.

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    • Kevin S. says:

      Romine OPSed .763 in high A-ball as a twenty y.o. There’s nothing wrong with that for a strong defensive catcher, but he’s playing at the appropriate level for his age and is still quite some ways away. He certainly doesn’t have any of the air of inevitability that surrounds Montero.

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  16. ryan says:

    The other factor when discussing salary caps is that the market will drive salaries down across the board. So maybe A-Rod doesn’t make $30 million or whatever, but the Yankees are still one of the only teams that will pay the max salary to elite FAs, even under a salary-cap system. The elite teams, generally, will stay good.

    NBA has a salary cap, and, lo and behold, the Lakers are still elite.

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    • Paul Thomas says:

      … and the Knicks?

      Yes, there are some good teams in good markets in capped leagues. There are also bad teams in good markets, good teams in bad markets, and bad teams in bad markets.

      In baseball, you basically have good teams in good markets and bad teams in bad markets, with occasional flukes one way or the other when a good-market GM’s moves turn out especially badly or when a bad-market team amasses enough talent for a brief stab at contention. There are no consistently good teams in bad markets– nothing remotely comparable to the Spurs or the Colts.

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      • Kevin S. says:

        I’d argue Oakland’s eight-year run reasonably approximates what the Colts did. The As went 5th, T-2nd, 2nd, T-1st, 2nd, 5th, 6th, 4th. All would be playoff finishes in the NFL. Furthermore, one could argue that the Colts’ sustained success is as much about Peyton Manning as it is the smart organization. There just isn’t an analog in baseball to the star quarterback in terms of one player being able to keep a team a contender. Not even Pujols can do it by himself.

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      • Mike K says:

        I’d say the Twins have done fairly well for themselves, being in the playoffs 5 of the last 8 years, and having a winning record in 8 of 9.

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      • Tom B says:

        winning the central is not generally much of an accomplishment… it’s more like “who ended up winning”…

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  17. Paul Thomas says:

    I’m not sure why an entire post needed to be expended taking down such an idiotic straw man as “let’s cap MLB payroll while fixing nothing else.”

    Yes, competitive reforms need to impact amateur acquisition as well. Ya think?

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  18. Davor says:

    Salary Cap is [b]never[/b] about balance, it’s about cost control and cost certainty. Owners can cap their expenses on players, and the teams are worth more, because of cost certainty. All the talk about balance is just to get fans on their side and to put pressure on the Union. Real Cap would require certain set percentage of revenues, and Union would need access to MLB books, to see if all the revenues are properly accounted for. I doubt MLB owners are ready to open their books to the Union, even if it gets them salary cap.
    As for third NY team, the big question is: where would it play? There is no chance NY would pay even one dollar to get the team or to build the stadium. There would be no tax exemptions, no subsidies, nothing. And I’m not sure MLB could sell the idea to NJ either. That means that the owners would need to put at least $500M into the stadium for a team without any fan-base. Who would be stupid enough to do that? And that money would need to be borrowed under commercial conditions, not like money for Yankee Stadium.

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  19. MarkS says:

    People bag on the NBA, but they at least have this aspect of the system working well. Yes, smart management can overcome payroll inequities, but at the end of the day in MLB, the teams with the highest payrolls tend to enjoy the most success. In the NBA, with payrolls roughly even, it’s not a matter of IF a team can resign a start player, it’s a matter of if the player wants to stay with the team. Look at this coming offseason. Lebron, Dwayne Wade, and Chris Bosh are all potentially free agents. Their teams aren’t faced with losing them because they can’t afford to pay them enough money, on the contrary, their current teams can give them MORE than anyone else. It’s about what the player wants to do. If one of them wants to play in a bigger market to get more endorsements, they can do it. If Lebron wants to remain in Cleveland, he can and the Cavs will pay him accordingly.

    The point is that if the Yankees couldn’t overpay for CC, AJ,Tex, etc to convince them to come to NY, then it would be based on players going to teams without having to worry about how much they might make. Yes, you would see some free agents jump to teams that could pay them more, but if the Twins could afford to pay their stars and retain them at the same amount that other teams could, then it balances out the roster talent among teams for the most part. This is where being able to create your own cheap talent to replace players who are moving on comes in to play. It no longer is about who has the biggest wallet (and can use it to fill holes), but who has the best front office for IDing and developing talent.

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    • Raf says:

      But did they really overpay Teix, CC & AJ? The “life of the deal” series pretty much had them pegged @ their salaries.

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      • MarkS says:

        Have not read that series, but from what I understand, none of the other competing offers for their services were near those dollar amounts/years. I also recall reading somewhere that Cashman had to overpay to “convince” CC to become a Yankee as CC wasn’t totally sold on the idea.

        And anyone paying AJ “3rd starter” Burnett $15+ M a year is overpaying.

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      • Raf says:

        CC was the only pitcher that Cashman “overpaid” (for lack of a better word). His deal far surpassed what Milwaukee was offering him. However, the Braves were in on Burnett, and the Nationals, Angels and Red Sox were in on Teixeira.

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  20. John Q. says:

    People often bring up a salary cap as a way to solve baseball problems but I think what really has to be done in sharing the local t.v. revenue. The major problem is that the distribution of local t.v. revenues were agreed to distributed the way they are today back in the 50’s-60’s when local t.v. money was a much smaller piece of a team’s overall gross revenue.

    Bill James propossed this in his “Historical Abstract”: 1/2 of the a team’s local t.v. revenue should go into a pool split up between the 30 clubs, the other 1/2 can be kept by the team itself.

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    • Tom B says:

      still doesn’t help us if the owners aren’t forced to spend it on payroll. they already get free money that they are pocketing, more isn’t gonna help.

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      • Paul Thomas says:

        I know there’s a solution here, but it’s momentarily escaping me… what is it… it’s on the tip of my tongue…

        Oh, right, now I remember. They could be forced to spend it on payroll!

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      • Tom B says:

        ok fine, but how about we make them spend the money they are already getting before we determine that they need more?

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  21. The Nicker says:

    “winning the central is not generally much of an accomplishment… it’s more like “who ended up winning”…”

    Granted the Central was bad this year, but let’s stack them up against, oh, I don’t know, the entire National League (AL Central record in interleague play):

    2009: 47-43
    2008: 58-32
    2007: 48-42
    2006: 63-27
    2005: 53-37

    In those 5 years, a Central team took the wild card once, and represented the AL in the Series twice (AL West is rocking a fat 0 in both of those categories). Not bad for playing in the league with the two payroll behemoths.

    So I’d say using the Twins as an example is actually pretty good, despite the “beleaguered” status of their division.

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  22. FanSince'48 says:

    As Tom implies, IMO the biggest problem with a cap is the salary floor which must accompany it. Some owners (Marlins? Pirates?) would be quite unhappy being forced to spend money on payroll that they would have been able to pocket without a cap/floor.
    EXAMPLE; An $80,000,000 20% cap means a payroll range of $96,000,000 to $64,000,000, and you just know that the owners more interested in lining their pockets would not stand for that.
    One thing the Yankees (and Red Sox, Mets, etc.) do is attempt to put out a good product for the fans.

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    • The Typical Idiot Fan says:

      The other part of this is “spend it on what”? There are teams that are, right now, mostly young players who are within the 6 year time frame before free agency. They’re not going to get paid more than minimum wage for those first three years. Even the arbitration eligible players may not get much, especially if they’re not that good. So are teams going to be forced to spend 12 million again on Jarrod Washburn just to fill their needs to meet the minimum cap requirement?

      Obviously the next evolution of this process is to either raise the minimum salary significantly and / or eliminate the 6 year requirement to free agency, instead allowing players to negotiate major league deals immediately after draft.

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    • MarkInDallas says:

      This is not true. The Pirates’ Frank Coonelly has come out saying the Pirates would support a cap/floor.

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  23. B says:

    Like someone else mentioned earlier, I’m all for a really strong luxury tax that kicks in at outrageously high levels so almost no team is affected. Dollar for dollar starting at $140M+ or something along those lines, and all those dollars in luxury tax go back into the revenue sharing pool so other teams actually get more money to spend out of this, improving the competitive balance some. I don’t see any real downside here – I don’t see this suppressing players salaries in any meaningful way, most teams are unaffected (actually positively affected), it might cut the Yankees payroll some but not a huge amount – just bring them a bit closer to everyone else.

    Also, I think there needs to be a salary floor in place along with this. I don’t see how any team that loses money in revenue sharing is ok with teams like the Marlins just pocketing the money the teams like the Yankees earned – put a floor at something like 10% above income from revenue sharing, or even at revenue sharing, just to make sure they at least spend as much money as they get in freebie handouts…

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    • Ben F says:

      A tactic to go along with your proposal would be to tie revenue-sharing dollars to payroll. If a team take revenue-sharing money, it has to be spent specifically on payroll in addition to the salary floor.

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    • Jeremiah says:

      This is my preferred option as well. The luxury tax is already in place, so there wouldn’t have to be a big showdown. I also think there should be some penalty for teams like the Marlins, Rays, and Natinals who pocket substantial portions of the funds they receive in revenue sharing. Perhaps if they do not spend a certain fraction of the money they receive in revenue sharing, they would forfeit some of the revenue sharing funds the following year.

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  24. paris7 says:

    The numbers posted by Tom B. above are striking. what I find much more striking than the Payroll numbers is the variance in payroll as a percentage of total revenue.

    As an Oaklander, I see: OAK $160 $47 29.38%
    Compare this with Detroit, e.g.: DET $186 $137 73.66%

    Based on these numbers alone, it is not a salary cap that’s relevant, but organizational costs.

    7 teams spend over $200M, 3 under $150M, and all of the rest are clustered quite closely. But the payrolls show far more diversity. I can’t understand how Detroit runs an organization on $50M, but Oakland requires $115M!

    Anyone who can explain this to me will have my thanks in advance.

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    • B says:

      Some owners are in it for the profits. Some owners are not. Also, I’m pretty sure Forbes numbers are pretty rough estimates since these are private organizatinos and they don’t share their actual figures…

      You are on to something, though, a lot of our complaints about payroll are baseless – the actual problem for many organizations is their owners choose not to spend.

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    • Jeremiah says:

      Looking at the numbers posted by Tom B above, the average difference between revenue and payroll is $105M. If you ignore the Yankees, it’s $103M. The biggest deficits between payroll and revenue are the Yankees at $166M, the Red Sox at $136M, and the Natinals at $130M. The Marlins, who have the lowest payroll, revenue, and percentage of revenue spent on payroll, have a difference of $118M. So even if they were at the $103M average, their payroll would only be $36M, still the lowest in the majors. They can’t compete with the Yankees at that rate even if they had Steinbrenner rather than Loria for an owner. Imagine if the Marlins had been able to keep Josh Becket and Miguel Cabrera to go along with Josh Johnson and Hanley Ramirez.

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    • Paul Thomas says:

      I can explain it to you– the Forbes numbers are bunkum.

      The Yankees number doesn’t include the vast sums they get out of YES network, which is “technically” an independent entity. That list massively understates the revenues of teams with their own networks.

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  25. r.w.g. says:

    Haven’t gone through all the comments.. but I just need to say to those who have advocated putting a third team in the market, whether it be Brooklyn or New Jersey.. do you live in the area?

    I live in New Jersey, central New Jersey, and nobody wants a Jersey baseball team. Nobody. It wouldn’t work. It wouldn’t work. It wouldn’t work.

    We are all Yankee fans. There are some Mets fans. Once you start hitting Trenton it becomes Phillies territory.

    I don’t know if you’re sitting out in a cave in Pennsylvania, or in some field in Iowa, when you’re coming up with these ideas, but they are crackpot.

    And I have to also second what another poster said regarding Brooklyn.. Dodgers fans in this area are DYING. Literally, they are dying because they are all 80 something years old and nobody cares about those bums anymore. Just look at what’s going in with the whole Brooklyn Nets deal.. does anybody care.. I mean, at all?

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    • dprat says:

      I think that’s a bit short-sighted of a response. In the first years of a new Brooklyn or NJ franchise, yes, most people at the games would not be fans of the new team. But they’d come because they are baseball fans, and because, presumably in building a franchise base, the tix were cheaper and easier to get. Plus there would be some forward-thinking folks grabbing season tickets thinking that they are grabbing a once-in-a-lifetime opportunity to have a legacy to hand on to their children. And, presumably the new franchise would have, fairly early on, one or two or more good talents that would make that franchise start to attract a following. At first fans would be Yankees (or Mets) fans first, but this team would pretty quickly become alot of fans second favorite team. (Alot of us are familiar with that.) It would happen, really, I think it would with that huge population to draw from – and in much less time than you might think.

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      • r.w.g. says:

        Do you live in the area?

        I really think that’s a very, very optimistic view you have. Maybe I can budge the slightest bit on a Brooklyn team poaching off some of the half-hearted scrubs that make up some the Metropolitans’ fan base, but no way a New Jersey team would ever work unless it was the New York Yankees keeping the name New York Yankees and moving their stadium just over the Hudson because they couldn’t convince City Hall to bankroll a sweetheart property deal. We know how that turned out.

        Seriously.. the train system in New Jersey is not great for getting around NJ unless your destinations happen to be on the particular transit line you are currently on. However, the train system is great at doing two things: Getting you to New York City and getting you to Philadelphia.

        I can walk from my apartment in New Brunswick to the train station and be at Yankee Stadium in like an hour and a half. For people in the post-industrial wasteland that is NNJ (JC, Newark, Elizabeth, Paterson, Hoboken [which is actually a nice city]) that ride is down to minutes.

        Major league baseball is not really a worthwhile venture in New Jersey. It just isn’t.

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      • dprat says:

        You may be right; I’m 3000 miles away. But I’m skeptical that a metro area of 19 million can’t support a third team, especially when they did so when the metro area was roughly half the population it is now. And when Milwaukee manages.

        Heck, when you think of it that way, if a new team could build up to drawing the loyalty of even 8% of the metro area, they’d have a larger fan base than the Brewers. And if after a few years, they got to a 15% share, that’d be larger than the local fan bases of the Indians, Reds, Pirates, Rockies, Orioles, Rays, and even the Cardinals! (based on metro areas populations – I know that’s oversimplified, but at least provides some data points)

        And transportation can be built, either rehabbing older lines or building a new spur (part of the plan when the A’s were discussing a ballpark in Fremont involved building a BART spur).

        Of course, this ignores the larger problem of Yankees/Mets/Phillies territorial rights. I used to think (pre-financial implosion, anyway) that expansion to 32 teams made sense in alot of ways, and that the two most viable locations were:
        1) somewhere in the NY metro area, and,
        2) Portland
        And the 1st seemed a far surer bet than the 2nd – admittedly from a distance, anyway.

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  26. Bigguy says:

    AJ Burnett was getting just over $12 million with the Blue Jays and the Atlanta Braves and Baltimore Orioles were both in the mix for him. The Braves offered him a 4 year deal for 68 million and then adjusted to 5 for $75 million. The Yanks kept their offer at 5 for $82.5 so Burnett went to the Yanks. CC is making $1.5 million more on average than Johan Santana and Tex was offered an 8 yr $172 million deal from the Red Sox, the Yanks countered with an 8 yr $180 million deal. In all these cases other teams had made offers and the Yanks just raised the stakes enough. The fact that Braves signed Lowe for 4 yrs at the age of 36 but wouldn’t fork over $7 million more to Burnett tells you why they stink. CC deserves $1 million more than Santana and both of their contracts are elevated cause the Giants gave Zito $18 million a year!

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    • Tom B says:

      Yes, let’s not forget that these pitchers salaries are all SF’s fault, and those losers don’t even spend 40% of their rev.

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  27. brian recca says:

    hey calm down with the Giants bashing there, although I do agree they should be spending more money on players. No reason why the Giants can’t be in the 100MM-110MM range.

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  28. R M says:

    Teams need to have a minimum percentage of revenue that the owners have to spend on payroll….this business of Loria spending 15% of revenue on payroll is absolutely absurd. He should never be allowed to do that.

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    • The Typical Idiot Fan says:

      Been allowed to do it twice now.

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    • MarkInDallas says:

      The less revenue you have, the less of a percentage you can spend on payroll. The whole minor league system and scouting departments are not dependent on the percentage of total revenue. Only marketing costs are.

      – Marketing costs will be more or less a fixed percent of market size.

      – Scouting and minor league costs will be a smaller percent for high revenue teams and larger percent for low revenue teams.

      – Conversely team payroll will be a smaller percent for low revenue teams and larger percent for large market teams.

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  29. 28 next year says:

    By the way, by trying to cap payroll, you are taking away revenue sharing money that funds teams like the Marlins and Rays and keeps them alive. Should there be a cap, revenue sharing is obsolete so the Rays and Marlins and other small market teams would struggle to reach a floor which is the only way you could allow a cap. Otherwise, the Union would never agree because that would severely drop salaries by taking away more than half teh payroll money. Almost every owner makes enough to put a better product, but most don’t choose too. The Yankees took losses at first to build up such a franchise.

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  30. Tommy says:

    This is an interesting take, and I think it’s very thoughtful.

    By the way, this is possibly the most pleasant thing I’ve read (including comments) on here, being a Yankee fan. Mostly everyone else on Fangraphs seems to hate the Yankees (or their players).

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  31. Skiz says:

    I think it’s a bit absurd to think that there is no possible way for a Yankee fan to convert and begin to support another team… Believe me, I’ve done it. Being born and raised in Northern NJ, I was an enormous Yankee fan… However, over time that has changed and I now throw my support in another direction, wholeheartedly, to the point where I enthusiastically rooted against the Yankees in the world series. Whether A Northern NJ or Brooklyn team would work, I have no idea, but it’s certainly plausible that if a competing product (in this case baseball team) were available, people would make the switch. I did.

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  32. JK says:

    Baseball is a business. Businesses need to make money. The Yankees make a ton more money when they are good. Small market teams, not so much. Tie revenue sharing to winning. This should give every team the same financial incentive to win. A system that evens out the win/revenue curves would be ideal.

    We use 4.5M/win as short hand in the free agent market. While this may reflect the truth for high revenue teams, it is not economic reality for low revenue teams. In truth the Yankees can “overpay” because the financial rewards of winning encourage them to do so. The Twins are “cheap” because adding those extra wins does not increase their revenue enough to cover the added costs.

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  33. joser says:

    The reason WWII is widely considered to be the last “Good War” is because (a) there was no doubt who the enemy was, and (b) there was no doubt of their complete and essential evil. This is the role of the Yankees, and to fullfill that role they have to win periodically; otherwise, their downfall at the hands of the Good Guys is never so satisfying or sweet. Of course that just leaves us facing down the next fortress of evil in the form of the Red (Army) Sox.

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  34. Rob in CT says:

    You have to tackle this from multiple directions:

    1) Expansion and realignment. 2 new teams in the AL, one of which goes in the NY metro area. Hell, you could argue for 2 new NY teams, one put in the NL and then moving one NL team over to the AL to balance it back out. You go to 4 divisions.

    2) More revenue sharing. TV money is key. I don’t know how you get at the money from the YES network, NESN, etc., but the effort must be made.

    3) Some sort of spending floor – this should be a “baseball operations” spending floor, not just the player salaries for the big club. Forcing teams in a rebuilding phase to spend a few more million on ML free agents is dumb. If you include all baseball spending, they can spend extra on draft picks, international signings, etc. Less dumb (though still possibly dumb).

    4) This is cosmetic, but… drop the stupid slot “recommendations” in the draft. Teams don’t follow them anyway. You could say make them hard slots, but then you’re screwing the players and that’s a fight I don’t think baseball needs (aside from just being wrong, IMO).

    That’s my back-of-a-napkin proposal.

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    • Tom B says:

      1) Adding teams, and thinning the talent(specifically pitching which is already too thin), is a terrible idea.
      2) Good luck. heh.
      3) Yes, all they have to do is require that you spend your revenue sharing dollars on payroll, and if you don’t you lose it. A floor isn’t necessary if they don’t get to pocket an additional #15-$20 mil each season.
      4) Hard slot, screw the players. Getting drafted in baseball is different than every other sport, and twice as irrelevant. Make it, then you get paid.

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  35. Vito Gobbo says:

    Hello People! Just wanted to tell you that I got tickets to the Jersey Boys concert on Aug 27th. In this webpage you can find tickets for other dates too. It’s wonderful their performance on stage, this is my fourth time and I’m still so excited about listening them live! On this page you can see the section where you’re buying the ticket, so it’s very recommended!

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