Is Yankees' New Spending Cap Going to Alienate an Already Overcharged Fanbase?
The New York Yankees aren't in uncharted waters just yet, but they're getting there. The organization will soon look less like the Yankees and more like, well, everyone else.
The big question: When the Yankees get to where they want to be, will people still want what they're selling?
By now, everyone should know what the Yankees are planning for the 2014 season. A new luxury tax threshold of $189 million is going to kick in, and Hal Steinbrenner would rather not subject the team to its penalties and save a few bucks.
OK, fine, "a few bucks" is putting it lightly. The new CBA calls for repeat offenders of the luxury tax to pay a higher tax rate, including a 50 percent tax for clubs that exceed it for the fourth time or more. That would be the Yankees, and a 50 percent tax for a payroll near or over $200 million is no joke.
Nonetheless, Joel Sherman of the New York Post raised a few good points in a recent column. He expressed concern over the willingness of Yankees fans to stay loyal to a decidedly cheaper version of their favorite team, and went so far as to ponder whether Hal Steinbrenner is risking the ruin of a franchise with his desire to cut spending.
"Is Hal risking a brand worth billions to recoup the millions that would come from being under $189 million in 2014?" Sherman asks.
This might actually be the case, as the warning signs are already there that Yankees fans are on the fence about their team at the moment. If a lower payroll ultimately results in a lower win total, more and more fans could abandon the team and make its cost-cutting measures a moot point.
How do we know that fans may be losing interest? There's evidence in the attendance totals, for one. According to Baseball-Reference.com, the Yanks drew 1,374 fewer fans per game this year, versus 2011. All told, they finished second in the majors in overall attendance to the Philadelphia Phillies (despite the smaller-capacity Citizens Bank Park).
Most concerning of all, though, is the fact that the Yankees' attendance woes didn't end with the postseason. There were a lot of empty seats at Yankee Stadium both in the American League Division Series and the American League Championship Series, and the fans who did show up weren't exactly boisterous.
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Things were actually so bad that the Yankees were forced to tell ushers to take fans from some areas and move them to better seats.
"I don't know what it's about," said one usher, also via Yahoo! Sports. "I guess they want to make it look better on TV."
Numerous explanations for the lacking attendance totals were bandied about. Some blamed Yankees fans for being indifferent. Some blamed the scheduling of the games. Others blamed the pricing.
Those who blamed the pricing had a leg to stand on. As Ken Belson of the The New York Times pointed out, the Yankees were charging over $100 for the "cheap" seats in the playoffs, forcing fans to go online to find deals and leaving many tickets offered directly by the Yankees unsold.
The notion that the new Yankee Stadium is too expensive is by no means a new complaint. People have been griping about the prices ever since it opened in 2009, and it's hard to take issue with all the grumbles given the state of the economy. If you're going to charge that much, you had better be worth the price of admission.
Evidently, the 2012 Yankees weren't. Fans voted with their feet on that one.
The good news for Yankees fans, such as it is, is that taking in a game at Yankee Stadium is adjusting to the market conditions. According to FanCostExperience.com, the average ticket price did decrease from 2011. And the same goes for the cost of a day at the ballpark in general (ticket plus parking, hot dog, etc.). Whereas the Yankees used to be right there with the Boston Red Sox in terms of pricing, they trended more toward the rest of the pack in 2012.
...Huzzah...? Not so much. While prices at the ballpark may be getting cheaper, it may soon get a little more expensive just to watch the Yankees from the comfort of one's own home. According to reports, News Corp is expected to announce this week that it has acquired a 49 percent stake in the YES Network from the Yankees and its partners in a deal that would value the network at $3 billion.
Then follows a bunch of mumbo jumbo that eventually leads to this:
The deal would allow YES to raise the $2.99 monthly fee per subscriber it currently charges cable and satellite operators to carry the channel, said the person. News Corp would negotiate on its behalf with the operators as part of a larger package of sports channels.
The timing of the announcement conjures a message that Yankees fans don't want to hear right now. It's something along the lines of, "Hey there, friends! Our costs may be going down, but yours are going up! Thanks for tuning in! Go Yankees!"
Now, the Yankees most certainly could get away with this little maneuver. They're lucky to have a huge fanbase to rely on no matter how steadily its ranks may be dwindling at the moment. If the ranks are dwindling, the Yankees can rest easy knowing that one thing will bring everyone back: winning.
But to this end, the question isn't so much how the 2014 Yankees are shaping up; it's how the 2013 Yankees are shaping up, as they'll need to keep on winning to make sure that a sizable chunk of the team's fanbase survives (psychologically speaking) the transition to the low-cost Yankees of 2014.
Here's where Joel Sherman pointed out a potential pitfall: What if the Bombers don't make the playoffs in 2013?
That is a realistic possibility. The Red Sox fell off the face of the earth in 2012, but the Baltimore Orioles gave the Yankees a scare and the Tampa Bay Rays won 90 games again. Both of them are likely to be back in 2013, and the Toronto Blue Jays are poised to make some noise after totally revamping their team over the past week.
If the Yankees are forced to pursue a wild-card berth in 2013, they'll likely have a couple teams from the AL East and the AL Central to beat out, and it became clear in 2012 that the AL West can be expected to have three legit contenders in it.
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The Yankees had better be strong if they want to do their usual thing (95-plus wins and a postseason berth) in 2013. Unfortunately, they don't look all that strong as things stand right now. Their rotation will be in shambles as long as Andy Pettitte and Hiroki Kuroda remain free agents, and they have several major holes to fill elsewhere as long as Nick Swisher, Rafael Soriano and Russell Martin are free agents. Swisher and Soriano, of course, probably aren't (see "definitely aren't") coming back.
In years past, any relatively weak Yankees roster would have gotten a few high-priced upgrades. That won't be the case with these Yankees, as they already have over $130 million in salaries committed for the 2013 season, according to Cot's Baseball Contracts, and every indication is that they're eyeing one-year deals only. They don't want to put too many contracts on the books for 2014.
It doesn't help that they have a ton of money invested in an aging Alex Rodriguez, a declining Mark Teixeira and a pitcher in CC Sabathia who finally broke down and started experiencing some injury trouble in 2012. They have $17 million more invested in Derek Jeter, who may not be ready for Opening Day after breaking his ankle in the ALCS.
One's first instinct is to assume that the Yankees will be fine. But with this group, I'd recommend not placing any bets. You don't need to be a Yankee hater to have doubts. Indeed, you get the sense that plenty of Yankees fans have doubts.
If the Yankees miss the postseason in 2013, they're going to have a very hard time convincing their fans that a lower-priced version of the team in 2014 is going to be worth their hard-earned dollars. Judging from the negative atmosphere surrounding the Yankees at the end of the 2012 season, they may be in that same boat if they even fail to win the World Series in 2013.
If the fans stop showing up at Yankee Stadium and stop watching at home in 2014, the world's greatest sports franchise will suddenly find itself with a low payroll, high operating costs and fewer fans to keep the revenue flowing.
And that would be...well, that would just be weird, wouldn't it?
Granted, it's not all doom and gloom. While disaster could be awaiting the Yankees and their spending plan, let's be fair here. It's also very much possible that they'll prove something to all their fans and skeptics.
What if they actually manage to prove that they can win with a lower payroll?
Thearon W. Henderson/Getty Images
It obviously bodes well that the San Francisco Giants won with a payroll under $100 million in 2010, and a payroll just over $130 million this year. The St. Louis Cardinals won in 2011 with a payroll just north of $110 million. The Philadelphia Phillies had a payroll under $100 million when they won in 2008.
This is to say nothing of dirt-cheap contenders like the Rays and the Oakland A's. They've been able to win by mixing and matching and always assuming that there's always more cheap talent to be found if you look hard enough.
That's a game the Bombers should be able to play. They just have to stop asking themselves who's good and start asking themselves who's good and cheap. They need to look for players who can potentially outperform their contracts.
The problem facing the Yankees is not so much that they don't have great talent evaluators, but that they have to look at things as if they have a cap on their payroll at around $115 million. Give or take, that's how much payroll wiggle room they're going to have so long as A-Rod, Teixeira and Sabathia are under contract.
That's not a ton of money in Yankee-land, but recent history tells us that a championship team can certainly be constructed for $115 million. All it will require is a shift from big spending to smart spending, which the Yankees can already claim they're doing with their preparations for 2014.
The other reason it's not all doom and gloom is that the Yankees don't necessarily have to keep their payroll under $189 million on an annual basis after the 2014 season is over. As Sherman pointed out, the luxury tax will reset to 17.5 percent in 2015 if the Yankees are over again, meaning they won't be taxed to death if they go out and sign some free agents following the 2014 season.
It just so happens that Justin Verlander, Clayton Kershaw and Felix Hernandez are all set to hit the market after the 2014 season, and so is Elvis Andrus. A cheap season in 2014 could precede a free-agent spending spree involving one or more of these stars.
How are you Yankees fans feeling about the team's plans?
It's very much possible that the Yankees' desire to cut their spending could just be a means to an end, not to mention a ruse for all the other teams in baseball to fall for. It's also possible that Brian Cashman or whoever's running the show a few years from now will prove capable of succeeding with a payroll weighed down by three massive contracts.
The Yankees are going to need their fans to bear with them. The team's prospects for 2013 aren't looking so hot and the club's desire to get payroll down is an alien concept, but it certainly shouldn't be taken for granted that the team itself is going to become a depressing mess not worth paying to watch.
Though fatalism may not be the way to go here, I'd still say there's more than enough cause for some finger-crossing. We know from their rich history that the Yankees know how to make it rain and win games. We don't know if they can pinch their pennies and still win games.
The Yankees are, in essence, an old dog trying to learn a new trick. If they take too long in learning, their fans will have every excuse to go do something else with their time.
For example, I hear the Knicks are pretty good these days. For once.
Note: Salary figures courtesy of Cot's Baseball Contracts.
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