Recently, I wrote about the Philadelphia Phillies starting pitcher Cole Hamels and his plunking of Washington Nationals outfielder Bryce Harper. In that piece I also noted that we haven't heard from Hal Steinbrenner regarding the Yankees pedestrian 16-13 start to the season.
As a matter of fact, have fans heard anything significant from Hal Steinbrenner since his declaration this past spring that the Yankees payroll was bloated and would be cut to $189 million by 2014 regardless of who needed to be resigned?
The New York Yankees payroll at the start of the 2012 season was approximately $196 million according to ESPN. Robinson Cano (club option with buyout), Curtis Granderson (club option with buyout), Nick Swisher, and Mariano Rivera among others are free agents after this year. Complicating matters is the issue involving 'average annual contract values' (AAV as the CBA refers to it has significant tax implications starting 2014) which is designed to prevent shenanigans such as front-loading or back-loading contracts.
It doesn't take a math genius to conclude that the Yankees must become incredibly creative or ignore the luxury tax if they are to keep the current roster in tact.
Yet why is the $189 million number so important to reach (as a salary limit) with the given value of the Yankees franchise? Earlier this year, Forbes concluded the franchise to be worth nearly $1.85 billion. An increase of approximately $150 million from 2011.
It's not my money, but common sense seems to dictate that winning, regardless of spending an extra $50 million of so, would inflate the value of the franchise. Is finishing first in the division and winning a World Series worth $50 million as compared to a third place finish?
Granted, I could very well be nearsighted in my assessment, however, wouldn't it be more prudent to see exactly where this team stands prior to the 2014 season before making payroll declarations? If the injury to Mariano Rivera (whose comeback itself may complicate matters heading into 2013) taught us anything its that flexibility in roster and payroll is paramount.
Then there is pride. Hal Steinbrenner is a self-described "finance geek." George Steinbrenner was a bull in a china shop during his heyday. There are many who will point to Andy Hawkins, Steve Kemp, and Terry Mulholland as examples of awful signings during the Steinbrenner Era. However he also gave us Reggie, Tino Martinez, and David Cone. For every mercenary like Cecil Fielder or Jose Conseco there was a Paul O'Neill.
More importantly, he ensured the legacies of Derek Jeter, Don Mattingly, Ron Guidry, Jorge Posada, and Mariano Rivera. He kept all those players and others in New York where they belonged.
George wasn't going to let a luxury tax effect his audacity when it came to chasing and keeping the best players in New York. Sure, it took him a while to perfect the art after a stagnant run in the early nineties, but his last 15 years of Yankees ownership was pure brilliance.
George measured success with pennants and world championships. How does Hal Steinbrenner measure success?
Sources: Yahoo! Sports
espn.com
Robert Watkins is former investment professional and partner. A native New Yorker until 9/11, he considers Pa. his adoptive home. A passionate Yankees fan and Pennsylvania sports enthusiast, Robert is a frequent contributor to Yahoo! Sports and News.
