In the wake of the passing of George Steinbrenner, ESPN has repeatedly mentioned the massive revenue stream which his ownership helped build for the Yankees. Whatever one thinks of Mr. Steinbrenner’s legacy, he was a magnificent businessman and a fan’s dream owner.
Over the years–in the comment section here as elsewhere–we repeatedly hear people complain about the Wilpons, saying they wish Met ownership cared about winning as much as George Steinbrenner, how much they wish the Wilpons would spend as large a percentage of revenue on salaries as the Yanks, how the Mets’ revenue stream is just as large being in NY, etc., etc., etc.
Well, with the facts being trumpeted all over the place, the time could not be better to tell these Nattering Nabobs of Negativity how wrong they are–about all of this. Those of us who are fond of facts have always suspected that this may be the case, but with the numbers being bandied about, there could not be a more opportune time to set the record straight.
According to ESPN, Forbes, The Biz of Baseball, ItsAboutTheMoney.net, and other sources, the Mets spend a HIGHER percentage of their revenue on salaries than the Yanks do. Read that again and let it sink in.
From ItsAboutTheMoney.net, with assists from Forbes and elsewhere: “But here’s an odd fact: take the top 8 revenue-earning teams in baseball (Yanks, Red Sox, Cubs, Phils, Mets, Tigers, White Sox and Angels). Make a guess: which of these 8 teams spends the lowest percentage of revenues on player payroll? The lowest payroll among the top 8 revenue teams, measured in terms of percentage of total team revenues, belongs to the Yankees.”
The Yankees spent 46.8% of revenues on payroll last year, and the small market/don’t-want-to-win Coupons spent 50.2%.
Now, there are mitigating factors to be sure–there is the luxury tax issue, and there is the huge fact that MLB teams are private businesses which can be hard to scrutinize (often, as is the case with the Mets, the team’s finances are just a shadowy part of a larger overall corporation), and there is always the question of being able to trust today’s irresponsible media.
However, when looking at numbers provided for all of these teams, the message is quite clear—as is the case with almost every issue, the Nattering Nabobs of Negativity are dead wrong. The Wilpons DO spend a very reasonable share of their revenue on salaries. They just do not have the revenue the Yankees have. Nor does any other team. The Yankees were winning titles with internationally-known superstars in the 1920s and 1930s; the Mets played their first game in 1962.
The message? The reasonable, educated, realistic fan sure should be frustrated at one title since 1969. But to complain about the spending of the Wilpons and to suggest that they don’t care about winning and are cheap–this is just nonsense, no matter how one approaches it.
The Mets are on the right track to be sure, as their roster of young-to-very-young stars, rookies, and prospects clearly shows.
Despite the mind-numbing repetition of the Chorus of Complaint, the facts are that the Wilpons DO want to win and DO spend a very sizable portion of revenue on salaries.
39 comments
metsfan4decades
7/14/2010-10:20am at 10:20 am (UTC -4)
O.K., if it’s not a $$ issue, it must be a talent issue. As in hiring the best baseball people for the job whether it be the scouts, player development guys, GM, managers, etc.
See: worst team money can buy. LOL……
ceetar
7/14/2010-10:21am at 10:21 am (UTC -4)
The real bonus of Steinbrenner was not the spending money, it was pushing the boundaries and exploiting the flaws of the free agent system to capitalize and be first. By starting to pay guys more, and demand more, and forcefeed his brand down others throats, he got attention, focus, and fans, which led to revenue. Look no further than the new Yankee Stadium, where everything is a sales pitch and sponsored. It’s about making money.
But every time you complain that a baseball ticket at Citi Field (or elsewhere) is so expensive, you have Steinbrenner to blame.
Kingman 26
7/14/2010-10:30am at 10:30 am (UTC -4)
“Look no further than the new Yankee Stadium, where everything is a sales pitch and sponsored. It’s about making money.” Totally true. And 100% true about Citi Field as well.
I am not sure that the squares of toilet paper at Citi don’t have corporate logos on them. Citi is a monumental memorial to corporate America first and foremost. Less seats than Shea, ads and sponsorships on every square inch, and embarrassingly little Met history until the fans demanded it.
And George’s legacy is also being expanded and distorted by his shockingly less caring kids. As I have repeatedly pointed out, George NEVER outspent the league by anything remotely close to the 2009-2010 Yanks. He was always among the top spenders,
often number 1, but never ever with a disparity remotely like the joke of 2009-2010.
ceetar
7/14/2010-10:38am at 10:38 am (UTC -4)
Citi Field is a nice stadium, and it’s roughly on par, advertising-wise, with every other major league stadium.
The Yankees sponsor strike outs. they sponsor the lineups, twice. They seemingly have two sponsors for every between inning commercial on the board. They didn’t even bother with a full out of town scoreboard because they needed to fit the ads in.
rustyjr
7/14/2010-10:28am at 10:28 am (UTC -4)
Greet article kong – kinda disproved the myth of wilpon not spending -I still stick by my questioning his legacy in my column today
Kingman 26
7/14/2010-10:36am at 10:36 am (UTC -4)
Thank you sir!
I am not really lauding the Wilpons as great owners—they and their GMs have made some terrible moves, but the whining of people about the spending is just wrong to me when facts disprove it.
But you are right–as usual–to question Freddie’s overall legacy. Let’s hope Wright and Reyes and Johan and the Junior Core make that debate more fun with another 1-2 titles in the next 5 years.
Just commented on your piece—LOVE the pictures and captions of George and Fred!
Mr North Jersey
7/14/2010-10:37am at 10:37 am (UTC -4)
It’s a nice article. It would be nice if you linked to article to where you got your info but with a lil copy and paste of the quote in Google I was able to read the full article that also posted with the Forbes and Biz of baseball links.
In case anyone else is interested here is the link.
http://itsaboutthemoney.net/archives/2010/04/26/yankees-payroll-at-league-average-not-really/
I think many agreed the Yankees spent more because they had more to spend the question was should they spend more just because they can?
It is a question that will forever be debated I suppose.
As far as the Mets being cheap I think it is kind of hard to say that about them when they are usually one of the Top teams in payroll.
I think what bothers many Mets fans is the feeling that the Mets won’t go that extra mile to win where with the Yankees it’s seems they always do.
What is reality and what is fiction I can’t say?
Kingman 26
7/14/2010-10:50am at 10:50 am (UTC -4)
What’s going the “extra mile to win”??
Spending more than anyone else? Spending a higher percentage of revenues? Not being satisfied with Ollie and Slappy and also having deals like Pavano and Burnett and trading for Vasquez and Granderson and signing Winn and Park and throwing away countless tens of millions everywhere hoping 1-2 of these guys will become valuable?
No thanks.
If that’s “going the extra mile” I will wait 1-2 years for Ike, Tejada, FMart, Captain Kirk, Havens, Mejia, Niese, Parnell and more to develop into a team I can truly love and admire.
No thanks on winning by outspending everyone comically and rooting for a team of corporate mercenaries. George didn’t even do that.
And I am NOT jealous of the Yanks or ANYONE, in baseball or anywhere else, so please don’t say that again.
Mr North Jersey
7/14/2010-11:07am at 11:07 am (UTC -4)
I was scratching my head for a second trying to think why you said to not tell you again you are jealous.
I then realized your talking about my reply when you said “The Yanks are a joke” comment in the Nick Evans On His Way To NY post.
Look King, I know you get offended easily and I don’t wish to offend you ok. But with all due respect the same you can sit there and say the Yanks are a joke I can say it “Sounds like jealousy to me.”
As far as today’s post I still feel it is a nice post I just simply added my 2 cents as to what I think. What is the extra mile? Good question Maybe you can use that idea for your next post.
GravediggerHebner
7/14/2010-1:56pm at 1:56 pm (UTC -4)
I believe subjectively but certainly cannot prove definitively that “going the extra-mile” in this instance refers to something along the lines of “yes I know you have already spent among the highest of all baseball teams (thus gone ‘the mile’) but now that your team is contending you are not adding a high salary/big name/big talent to it to put it over the top mid-season (thus going the ‘extra-mile’).
That the Mets have contended in multiple years under Wilpon ownership is I believe undeniable. That the Mets have sought to “firm up” their contention mid-season by adding big pieces is at best debatable.
ceetar
7/14/2010-2:01pm at 2:01 pm (UTC -4)
Kei Igawa I think is the “extra mile” but it’s certainly looking like Perez is going to fit that bill for us this year.
njstuckintx
7/14/2010-10:37am at 10:37 am (UTC -4)
Beware of percentages. They are evil and can skew ones view. Case in point, Thole’s wonderful batting average yet limited number of at bats.
stickguy
7/14/2010-11:07am at 11:07 am (UTC -4)
nice piece.
If anything though, like MF piotned out above, the issue isn’t payroll (where the Mets spend a lot, maybe too much?) It is the other places they have to spend money. front office talent, minors, draft, and other infrastructure.
I was always under the impression that the Yankees really flexed their financial muscle in those areas, which fans don’t really see (or care about).
sure, you can say the Mets are spending less than the phils in payroll, but I have no idea if they are spending more or less on other player development areas.
trs86
7/14/2010-11:12am at 11:12 am (UTC -4)
Which is why in my opinion a salary cap in baseball will not help. You can’t go as deep as those things you listed. The Yanks will always have an advantage because they make more money.
stickguy
7/14/2010-11:16am at 11:16 am (UTC -4)
It works the same way in football. A much evener playing filed of course, but the richer franchises will always find a way to use that advantage.
The real purpose of a salary cap is not parity. It is allowing owners to keep more $ in their pockets. In essences, they all get to act like the Marlins!
ceetar
7/14/2010-11:17am at 11:17 am (UTC -4)
A salary cap/range would definitely help. It’d need to be done correctly though.
trs86
7/14/2010-11:33am at 11:33 am (UTC -4)
I am still not so sure. The salary cap has actually ruined the NBA.
trs86
7/14/2010-11:37am at 11:37 am (UTC -4)
Just to state my opinion, I am just not sure there’s a need. If anything there should be a salary minimum but if a max then you set it at some unlikely reached number. Baseball already has the most diversity by far among WS winners in the last 30 years compared to football and basketball.
ceetar
7/14/2010-11:41am at 11:41 am (UTC -4)
My biggest issue is when just about every big free agent jumps ship the first time. out of Montreal, out of Florida, etc. It does seem to b e getting a little better, guys like Braun signing longer term deals, Mauer staying put. etc.
I’d like to see the league at a point where if Pujols _did_ become a free agent, there would be a chance, however small, that any team could actually sign him, instead of like 3.
DNDJohan aka kistics
7/14/2010-12:05pm at 12:05 pm (UTC -4)
Perhaps having a max contract $$ like NBA has, but no cap.
So say Pujols can only get $20M/year for 5 years. So the bigger market teams cannot outbid other teams, and that the players’ priority is not money, but something else.
ceetar
7/14/2010-11:38am at 11:38 am (UTC -4)
the NBAs cap se ems to be a joke. I’m looking at more of an extremely loose one. Raise the floor, make it easier/more neccessary for smaller taems to keep/sign a big star. lessens the C.C/Burnett/Texiera at once factor.
Maybe a hometown discount thing too wouldn’t hurt. 10% of a players contract that was already on your team is not counted towards the cap or something.
trs86
7/14/2010-11:11am at 11:11 am (UTC -4)
What I can say is the Yanks should spend the money they do. It’s not their fault that the rules are deemed “unfair” by some. They bring in the money and under the current system they are allowed to spend it. I have never seen a problem with it. If you have a problem with it then you have a problem with the MLB and the MLBPA not the Yankees.
Mr North Jersey
7/14/2010-11:12am at 11:12 am (UTC -4)
Agreed
trs86
7/14/2010-11:13am at 11:13 am (UTC -4)
Oh wow!!!!
You made my day.
stickguy
7/14/2010-11:20am at 11:20 am (UTC -4)
people also forget that the Yankees make more money for EVERYBODY. Much of the merchandising goes into a central pool that players share, right? They also help drive TV ratings, and again, that is shared money.
Plus, they have traditionally been one of the big road draws, and that extra money geos straight into the home teams pockets.
so yeah, MLB is not quite as interested in reigning in the yankees as many fans are.
at least we can hope for a rough patch soon. That team has a ton of age on it, and a lot of LT guaranteed deals (with more about to come most likely). At some point, they won’t even be able to dig their way out of it!
Phils and Yanks having a couple of rough rebuilding/retooling years would eb nice to see!
Mr North Jersey
7/14/2010-11:29am at 11:29 am (UTC -4)
What is funny about the whole spending the most money argument is that it has been proven that just because you spend the most money doesn’t mean you will win.
The Mets have been one of the top spenders in the NL and all they have to show for it is 2006.
The Yankees are not winning simply because they are spending the most money. They are winning because they also are spending it on the right players.
They also have produced key talent from their farm system.
Players like Jeter, Petite, Posada, Rivera, Cano, Chamberlain, Hughes, and Gardner. Those 8 players make up about 1/3 of their roster.
trs86
7/14/2010-11:35am at 11:35 am (UTC -4)
Yeah there is a little strategy in it. It’s also true though that you can afford to take risk on big contracts knowing that you can spend your way out of it.
My thing is that we say that the Yanks should not spend what they do and it’s unfair. Yet we are also saying that they don’t spend anymore percentage wise of revenue than 8 other teams. So what are we asking their owners to do? Pocket more money and give their team less chance to win?
stickguy
7/14/2010-12:02pm at 12:02 pm (UTC -4)
Probably shouldn’t revisit this rant again, but I still have a problem with people giving credit for the yankees having jeter, etc. as “home grown” players after all this time. They all reached FA mutliple times, and were resigned by the Yankees (heck, petite even left a couple of times).
If anything, it points out one of the major advantages (or inequities, if you look at it that way) of the financial landscape. The yankees can also overpay to keep what good talent they do develop, even if a bunch hit FA in the same year.
More “revenue challenged” teams just can’t do that.
ANd if Petite is a home grown yankee, than so is Bay, since he started out with the mets!
Mr North Jersey
7/14/2010-12:19pm at 12:19 pm (UTC -4)
LoL you really want to suggest that because of Petite’s years in Houston he is no longer considered a home grown yankee?
That would be like saying Seaver wans’t a home grown Met when he returned to the Mets in 1983.
Also Petite actually played on the Major League team and won a W.S. where Bay never played on the Mets Major League team.
stickguy
7/14/2010-12:40pm at 12:40 pm (UTC -4)
I knew that someone would miss the point.
These guys came up in 1995 or so. they are not the same as a team like the rays, that has young recent home grown players.
They all have hit FA (or got bought out of it) a couple of tiems. So at this point, they are no different than any other huge $$ FA “mercenary” type (C.C., Burnett, A Roid, etc.).
to me, the team that drafted them 15-20 years ago is irrelevant.
The yankee $$s do, however, allow them to act like the Mob, and make players “an offer they can’t refuse!” Plus, they know they can resign for Yankee tradition, AKA they will sign enough other FAs to always be in the playoff hunt.
Cano, Hughes, Joba, yes, they are home grown talent guys, and certainly the Yankees get credit for finding that talent, but even there, smart use of the extra money comes into play (signing a big $ IFA and a couple of overslot guys).
Mr North Jersey
7/14/2010-1:42pm at 1:42 pm (UTC -4)
I get it so once the Mets signed Wright to that
6 years/$55M contract and Reyes to that
4 years/$23.25M contract they were no longer home grown talent.
I think your getting too hung up on the term Home grown talent but if to you signing a major league contract means your no longer home grown I will respect your opinion. When I say they “have produced key talent from their farm system” I mean just that that they developed players that have helped them win and other than Petite have only been with 1 organization helping them win a title.
ceetar
7/14/2010-1:50pm at 1:50 pm (UTC -4)
When (And they better) Wright and Reyes resign with the Mets, then yes, the argument will be the same.
For now though, they’re here because they traded a year or two of free agency for money earlier.
Some teams are doing this too, in a way to help curb the Yankees advantage. Ryan Braun for instance.
Look at the rumors that even the Cardinals, when they resigned Holliday, were going to be financially unable to keep Pujols too.
DNDJohan aka kistics
7/14/2010-11:59am at 11:59 am (UTC -4)
We also have to remember that this “unfair” signing of FAs is also a byproduct of cheap owners (Pirates, Royals, Marlins, etc) as well. They certainly have the money to spend, but are more interested in making money.
Do I get frustrated when I see the Yankees signing every possible FAs out there? Sure. But I also question ownership of above mentioned clubs of not caring about how the team does.
rustyjr
7/14/2010-12:08pm at 12:08 pm (UTC -4)
Well this is interesting – as per mlbtr. The Blue Jays acquired shortstop Yunel Escobar and pitcher Jo-Jo Reyes from the Braves for shortstop Alex Gonzalez and minor leaguers Tim Collins and Tyler Pastronicky, according to a team press release. The Jays designated Ronald Uviedo for assignment to make room on the 40-man roster.
They traded good pitcher for a decent SS ?
njstuckintx
7/14/2010-12:12pm at 12:12 pm (UTC -4)
I’m not sure what to make of it. I do know I’m going to enjoy not seeing the smiling Yunel multiple times each year. I hated that smug smile. But then again, I didn’t like Franchy’s when he was in Hotlanta. Must be an anti-braves thing.
DNDJohan aka kistics
7/14/2010-12:14pm at 12:14 pm (UTC -4)
Escobar’s defense was spectacular for the Mets though…
metsfan4decades
7/14/2010-12:21pm at 12:21 pm (UTC -4)
Oh yeah…
From what I’ve been reading, I think the Braves were tired of Escobar not keeping his head in the game with his numerous base running and defensive mistakes.
Good thing Chicago gave up on Pagan…..
DNDJohan aka kistics
7/14/2010-12:12pm at 12:12 pm (UTC -4)
Yunel Escobar dealt to the BJays for Alex Gonzalez… couple minor leaguers are involved as well.
http://www.mlbtraderumors.com/2010/07/blue-jays-acquire-yunel-escobar.html
I’m not sure what this trade means to the Mets, but I believe Gonzalez’ bat should help the Bravos. From what I saw last week, it was a matter of time before Escobar got dealt. But he does have talent though.
gategem
7/15/2010-1:09am at 1:09 am (UTC -4)
The Yankees in the late 1960’s and until Steinbrenner purchased them in 1973, were a pathetic to mediocre team and their attendance was poor. Their attendance was also weak during the 1980’s when Steinbrenner threatened to move the team to New Jersey. Indeed their legacy did not put people in the seats when the team played poor baseball. The following article from Newsday, which I post because many of you don’t subscribe to the website, explains how Steinbrenner’s sports entertainment business acumen made the club what it is today, a revenue generating machine. In the sports entertainment business Steinbrenner put the other owners to shame.
Originally published: July 13, 2010 10:55 PM
By ANDREW SMITH andrew.smith@newsday.com
“As anyone who’s seen the iconic New York Yankees hat on the streets of Paris or Sydney knows, the franchise under George Steinbrenner was a success far beyond the corner of East 161st Street and River Avenue in the Bronx.
“He bought the team for $10 million” in 1973, said Bruce Johnson, a sports economist at Centre College in Kentucky. “Now they’re probably the most valuable franchise in professional sports in the country, if not the world.”
In its annual assessment of baseball franchises, Forbes magazine calculated that the Yankees are worth $1.6 billion, almost as much as the second- and third-most valuable teams – the Boston Red Sox and the Mets – put together.
Despite often being ridiculed for his spendthrift ways when it came to acquiring high-priced free agents, economists said it paid off for Steinbrenner. It led to victories, which led to championships – which led to strengthening the Yankees brand and increased income.
“George Steinbrenner spent a lot of money – but he got it all back,” said economist Andrew Zimbalist of Smith College in Massachusetts. “He gets rewarded for spending money. It was spending for the sake of winning.”
Particularly after free agency, Steinbrenner recognized that simply by being in New York, he was sitting “on top of the richest entertainment market in the world,” Zimbalist said. He showed other sports teams how to go after commercial opportunities.
Johnson said Steinbrenner was a master at exploiting the value of cable television. “When he recognized the advantage of having his own network, that’s when the value really took off,” Johnson said.
Steinbrenner first struck gold with a 12-year, $486-million deal with the Madison Square Garden Network in 1988. Then in 2002, the Yankees started the YES Network with other investors. That deal has been worth hundreds of millions of dollars.
As a result of the team’s success, it squeezes far more from the same market than the Mets do, Forbes reported.
The Yankees bring in $55 per fan, compared with $32 for the Mets. The Yankees get $839 million of its value from the New York market, and the Mets get just $380 million from the same market. And the Yankees brand management is worth $328 million, compared with $158 million for the Mets.
Steinbrenner’s savvy capitalization of Yankees success boosted all of baseball, Zimbalist said. “It had been a sleepy sport until George Steinbrenner came along,” he said.
Economists said there has been no evidence that Steinbrenner’s health-related absence from the team or his death will have an effect on the team’s fortunes. “They’re still the Yankees,” Johnson said. “They’re still in New York.”"