by Paul Semendinger
December 11, 2023
(Quick Side Note - Many people know the book Eats, Shoots & Leaves which, primarily, is a book about punctuation. The title of this piece is similar to that. The title of this article is not missing a comma. The title of this article is Baseball Money (noting that baseball money is a thing in and of itself, and different from money as we, as fans, understand it) and the Yankees. The title is not: Baseball, Money, and the Yankees (although, I guess that works as well. Still, I prefer it the way I wrote it with "Baseball Money" being an accurate description of what follows.)
The Yankees still have more moves to make. This might be the week they sign Yoshinobu Yamamoto. In an upcoming article later this week, I'll explain why the Yankees should acquire Cody Bellinger. At the end of the 2024 season, Juan Soto will be a free agent. The Yankees will need to sign him too. All of this is going to be costly.
But, the Yankees can afford all of that and more. Lots more.
Let me explain...
1.) First, we, as fans, do not truly understand, in any way, shape, or form, the finances in Major League Baseball. Baseball Money is something that is quite different from the money that we, as fans, are used to. Baseball money is very different. And I do not believe that we understand "Baseball Money." Not by a long shot. Not in any way. At all. We might think we do, but we don't. A few months ago, "experts" were wondering if Shohei Ohtani might be a $400 or $500 million dollar player. And that was seen as crazy. No one, at all, anywhere, imagined, in their wildest dreams, that his contract would be for $700 million.
2) Some people might comment on my first point and say, "Yes, but some of that $700 million is deferred and..." at that point, I don't think they would say much more than that. I woud venture, very confidently, that no one knows quite what that means in regard to the Dodgers' payroll, their tax implications, Ohtani's actual income, his own tax responsibilities, and lot more which further proves my point that we, as fans, do not understand, in any way, shape, or form, the finances in Major League Baseball. Not by a long shot. Not in any way. At all. We might think we do, but we don't.
3) There is more money in the game than any of us realize or understand. I don't think we can even truly conceptulatize it. We are not talking tens of millions of dollars. We are not talking hundreds of millions of dollars. We're not even talking a billion dollars. We're talking billions and billions and billions. That money, in the end, will either go (primarily) to the owners and investors or (primarily) to the ball players. I am in the camp that the players should get whatever they can. The players are the stars of this show. They are who we root for.
4) If an owner is willing to pay a player a salary, by and large, that owner knows that that player will generate the revenue needed to offset his salary (probably in many ways and many times over). The owners and executives of the teams are smart business people. They know what they're doing. They're all making tons of money - even the small market guys. Let's not fool ourselves. If they offer a salary, they know they can afford to pay that salary. Again, these owners are not dumb - they are all very very wealthy - beyond our wildest dreams. They've made their fortunes being very smart financially. They don't forget all of their business sense when they're signing baseball players. They know exactly wehat they're doing. They know they're making wise and sound business decisions.
5) Every owner wants to make money, but not every owner wants to spend that money to win. In fact, most do not. But the fact that some owners are not willing to spend, does not (in any way) mean that they aren't making money.
6) The Yankees have more money than most realize. The Yankees are baseball's most valuable franchise - and it isn't even close. At all. Before the 2023 season, Forbes valued the Yankees at 7.1 BILLION dollars.
With that 7.1 billion dollar figure, the Yankees are worth:
$2.3 billion more than the second place Dodgers
$2.6 billion more than the third place Red Sox
$3.0 billion more than the fourth place Cubs
And, f you take the fifth place Giants ($3.7 B) and the sixth place Mets ($2.9 B) and combine them ($6.6 B), they are not as valuable as the Yankees.
Suffice this to say, as I have said on these pages many times before, that the Yankees are not just the most valuable franchise, they are light years ahead of the rest of the league.
7) In 2022, the Yankees' revenue was $657 million dollars. The numbers for 2023 will come out in March 2024, but I have to assume that that number will increase. The stadium was packed in 2023. It seems also that every time I see Yankee Stadium on TV or in person, there are more and more ads on the walls. In so many ways, the Yankees seem to print money. The Yankees' player expenses in 2022 were $262 million. Some quick math shows that the revenues exceed player costs by $395 million. (That's about equal Aaron Judge's annual salary ten more times.)
8) Let's remember that in addition to the money generated above, the Yankees now take in an additional $20 million annually from the Starr Insurance patch alone.
9) The Yankees, if they so desire, have the revenue to get and keep whatever players they want. That isn't even a question. It is not up for debate. They can pay Juan Soto a gazillion dollars. There is no reason why Juan Soto needs to be a one-year rental. The only way Juan Soto will be a one-year rental is if the Yankees determine that they'd rather not pay his market value after the 2024 season. It's not like the Yankees can't afford to pay him.
10) Yoshinobu Yamamoto is going to cost some baseball team a whole lot of money. It might as well be the Yankees. They can afford to pay him. Remember, after Ohtani's signing, what we as fans perceive as huge dollars are not seen in the same way by the owners. The owners know what they can afford when they really want a player. Last year all were amazed when the Mets were paying Max Scherzer and Justin Verlander $40 million dollars. Those salaries were so big and so prohibitave that... they were both able to be traded. $40 million was seen as a crazy amount, but in the end, it really wasn't. A year later, Ohtani's contracts is 10-years and $700 million.
Conclusion - The Yankees shouldn't be done building their 2024 team yet. They have a rare chance, right now, to build a super team that should be amazing for the next many years.
Shohei Ohtani's contract proved, once again, that we don't understand the fiances of baseball. There is more money there than we can imagine and no team has more money than the Yankees. The only thing between the Yankees and buiding a super team is the team's own willingness to play as big as they can.
The Yankees have the financial might to do whatever is necessary to make 2024 (and beyond) the greatest year(s) ever!
And, for the first time in a long time, I think the Yankees are willing to spend big this winter. (I hope I'm correct!)
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