Big Winners, Losers

Grading Every Deadline Trade

New York Yankees Prove Once Again They Run the Best Business in MLB

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New York Yankees Prove Once Again They Run the Best Business in MLB

Take away the pinstripes, the statues, the lore.

Get rid of the 27 rings, the 40 American League Championships, the Hall of Famers.

Strip it all away, and the New York Yankees still run their team better than any other ball club in baseball does. In fact, they run theirs better than any other team in the Western Hemisphere.

What Manchester United is to soccer, what the Green Bay Packers are to football, what the Lakers are to basketball pale in comparison to what the Yankees are to baseball.

They are Apple in a league full of IBMs. They are Goldman Sachs in a league full of Lehman Brothers. They are Walmart in a league full of K-Marts.

With their most recent baseball-related moves, the New York Yankees showed that they are rich in every sense of the word, able to control the balance of power in baseball with a simple phone call. Love them or hate them, you have to respect the power of the Evil Empire.

As the only free-market American sport, baseball lends itself to a lack of parity. Since the free agency era began, baseball has shifted more from a sport full of hometown heroes to a relentless business, a perfect example of survival of the fittest.

And that's exactly what the Yankees have been—the fittest. They signed Catfish Hunter. They traded for and signed Alex Rodriguez. They signed CC Sabathia, Mark Teixeira and A.J. Burnett in one offseason. They've traded their farm system for big-time talent, a practice other teams wouldn't dream of.

Mike Stobe/Getty Images
The Yankees' financial power allows them to have this scene on the mound.

Maybe they don't get the best return on investment, but the Yankees have always been profitable.

When a shipbuilder from Cleveland named George Steinbrenner took over the team, he instilled a businesslike demeanor throughout the organization. It was all about the bottom line—the wins, the championships and the profits.

There is no more powerful brand in sports than the mighty "NY" embroidered on jerseys, hats and t-shirts. No team's logo has more selling power. Not even close. When you throw in a television station and baseball's largest market, the Yankee dynasty refers more to business than baseball.

Everything about the Yankees' dominance was exhibited in the span of one evening. Last night, the Yankees, in two transactions, went from being doubted to win their own division to being the American League favorites.

First, they traded Jesus Montero, their top prospect, future superstar and best bargaining chip, to Seattle for Michael Pineda, a pitcher with just over 170 innings of major league experience. Why? Because they could. Why? Because the Yankees can afford to take risks like that.

Next, they bought their insurance policy. They signed Hiroki Kuroda, a proven commodity and workhorse pitcher, to a one-year deal. No other team in baseball showed much intent to pay $10 million for Kuroda. For the Yankees, he is an investment with almost zero risk. If he produces, $10 million might have been cheap. If he doesn't produce, well, $10 million is pocket change to the New York Yankees.

Dilip Vishwanat/Getty Images
Hiroki Kuroda, the Yankees' insurance policy for Michael Pineda.

Think about that for a second. The Yankees traded their best offensive prospect for what amounts to their second- or third-best pitcher. Then, they bought an insurance policy on that pitcher, who also happens to be a pretty good pitcher himself. It's baseball's equivalent to buying a Mercedes, then an Audi as a backup car. You can still drive the Audi, but if your Mercedes breaks down, you'll be happy using it as your first car.

The only reason the Yankees are able to do this is because of their bottom line. It's because their merchandise sales dwarf everyone else's. It's because their television revenues are astronomical. It's because they are absolutely unaffected by the luxury tax and revenue sharing.

Perhaps this is baseball's biggest flaw, or perhaps it is the Yankees' biggest strength. The Yankees control the business of baseball. They set the bar. The Rays can exploit undervalued players all they want, and the Rangers can make perfect trades all they desire, but at the end of the day, the Yankees are the ones who can do literally whatever they want.

Ask any businessperson on the planet—the ability to be completely financially flexible is the ultimate dream. At an organizational level, the Yankees have achieved that dream for many years now.

What they did Friday night is simply another lesson taught by the masters of the business of baseball. The New York Yankees are the business kings of sports.

Now it is time to see if they want to sign themselves a Prince.

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