Wednesday, November 17, 2010

The Money and the Coming Yankee Youth Movement

Last week, I wrote about how, due to age and financial considerations, this could be Jorge Posada's last year as a Yankee. Let's take this thought line—specifically future Yankee financial considerations a bit further. What have the Yankees set themselves up, re. the future?

Now everyone thinks the Yankees have a limitless bankroll, and yes, they have more than their fair share. But its not bottomless wallet. For a while now, there have been rumblings about Cashman refusing to go after a player, even though the Yankees could have used him, due to a budget (for instance, Johnny Damon or picking up Kerry Wood's option). Most people laugh it off. But what if its serious? What if the current economic crisis is affecting the Yankees and affecting their...gulp...budget.

Well, since significantly increasing their budget from the early 2000s to about 200 million of late, the Yankees have leveled off ( giving themselves a soft cushion to go after mid-season free agents who will leave at the end of the year, such as Lance Berkman). Hal Steinbrenner has said recently, that the Yankees will stay at the same level. So about 200 million.

OK, let's assume that the Yankees sign Derek Jeter to a 3-year, 20 million dollar contract, which will bring us to 2013. In 2013, the Yankees would owe 110 million to 5 guys. Sabathia, Burnett, Teixiera, Rodriguez and Jeter. The Yankees would have to have the rest of their roster under contract for about 90 million. And what if Cliff Lee signs with the Yankees? That would take about another 25 million, so, 6 guys would account for 135 million. Throw in a club option for Robinson Cano, and now the number is 150 million. This also assumes the Yankees don't pick up Curtis Granderson's option. This also assumes Mariano Rivera retires, the Yankees don't resign Nick Swisher, and the raises the Yankees would have to pay Phil Hughes, Brett Gardner, whoever takes over shortstop (Nunez, perhaps) assumes the Yankees don't sign another significant free agent (who takes over for Rivera if Chamberlain bombs?)

Well, Cashman has been rumbling about going to the farm system more and more, and maybe, in the near future, he'll live by his own words. Odds are, he'll have to. With three quarters of his budget going to a handful of guys and a number of holes on the team, the Yankees would have to resort to their minor leaguers. Starting with Jesus Montero, the Yankees will need their farm system to produce at a high level, especially considering that the guys pulling down the 150 million will be again and most likely, seeing their level of play diminishing. Just check it out on Alex Rodriguez will be 37 in 2013; Jeter will be 39; A.J Burnett will be 36; Teixiera will be 33; Cliff Lee, should he sign would turn 35 in 2013; and Sabathia, luckily will still be the baby at only 32.

So, it would appear the Yankees have no choice but to turn to the minors to fill in the hole at left field, right field, ace reliever, shortstop (Jeter would move to third), a couple of starters and the rest of their bench and bullpen. Some of those holes could of course be filled with free agents, but not the type of free agent the Yankees are used to. Consider, that 50 million or so has to get divied up by the younger players who should be expecting raises by that time (Phil Hughes, Brett Gardner, Joba Chamberlain, if he is still around, David Roberton, etc. In other words, it's doubtful that the Yankees would be entering the Prince Fielder or Albert Pujols sweepstakes. Could they afford say, a Wandy Rodriguez? Not without some belt-tightening.

So expect to see more young Yankees than we are used to seeing. Expect maybe an Andrew Brackman reliving where it used to be Mariano Rivera. Or Slade Heathcott where Paul O'Neill and Nick Swisher player. Or Austin Romine where Posada was. The real 200 million dollar question is this: Is the Yankee farm system ready to play at the New York Yankee level of quality? With the high expectations from fans and the media and the world watching? With TV ratings in the balance?

Who knows? All this is speculative—Who knows what will by 2013? Granted, no one. But it is likely. The Yankees owe a great deal of money to aging players. They also have a budget.

They also have a lot to think about.


Pete S said...

Terrifying article, because it's all true.

blmeanie said...

follow this math if you dare:

2010 Yankee Stadium capacity 50,086

2010 avg ticket : $51.83
2010 avg attendance : 46,491
2010 avg unused : 3,595

2010 capacity*avg ticket*81 games = $210.3m
2010 ticket revenue: $195.2m
2010 revenue gap: $15.1m

what-if ticket prices were lowered strategically to get the house full, an extra 3595 people in seats every single game on average?

To break even with the gate revenue of $195.2m tickets for all 50,086 people would average $48.11 or down 7.2% from real/current prices.

Assuming it was done and people responded, why do it? You come out to the same $? Did you see the empty seats on tv all the time? Besides that, what do people do at games? Besides chucking batteries, they eat and drink and park cars.

What if the average additional person (3595) :

ate 1 hotdog ($4)
ate some fries ($3)
drank a soda ($3)
ate popcorn ($5)
drank another soda ($3)
paid for half of parking ($12)

This would be $30 per person x 3595 x 81 games would equal additional revenue stream of $8.7m

Not a bad idea for just lowering prices and filling fannies in the seats. Of course, would even be better if you can fill them without lowering prices...might make the pauper outlook for the Yankees seem like old news. An extra $8m would buy an additional player...