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  1. #1
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    Rosenthal: Payroll reduction benefits might be less than anticipated

    Interesting:

    I had a feeling a report like this would surface eventually, but I thought it would take until next offseason. Ken Rosenthal says the Yankees’ plan to get under the $189M luxury tax threshold might not be as lucrative as the team originally anticipated due to various goings-on around the league. I’ll let him explain…

    Under the labor agreement, the 15 clubs in the largest markets will forfeit an increasing percentage of their revenue-sharing proceeds starting in 2013, and become ineligible for any such money by ’16.

    The revenue-sharing funds that would have gone to those clubs then would be redistributed to payors such as the Yankees. The idea is to motivate certain big-market clubs — the Toronto Blue Jays, for example — to increase their revenues, knowing that they no longer would qualify for revenue-sharing money.

    From that perspective, the plan appears to be working — the Blue Jays, Washington Nationals and Atlanta Braves are among the big-market clubs that anticipate higher revenues next season, according to major league sources.

    Such developments would reduce the size of the market-disqualification pot — and in turn reduce the percentage of that pot the Yankees would receive.

    In English, that means there were top 15 market size teams that were not among the top 15 revenue generators, like the Nationals and Blue Jays. Those teams received revenue sharing payments but are now disqualified under the new Collective Bargaining Agreement, and the money they would have been received goes back to the clubs that paid out. Since they’re generating more revenue though, they would have received a smaller piece of a revenue sharing pie and thus the Yankees won’t get back as much. Got it?

    Rosenthal cites a Joel Sherman report I don’t remember seeing that says the Yankees anticipated $10M in revenue sharing savings by getting under the luxury tax threshold in 2014. That then jumps up to $40M (annually, I assume) if they continue to stay under in subsequent years, something Hal Steinbrenner has confirmed they will do. All of that is on top of the money saved by not paying the luxury tax, which is a decent chunk of change. Just based on the team’s revenue sharing number ($10M) plus the luxury tax (~$12M) plus the general payroll reduction (~$20M), the Yankees are looking at something like $42M in savings in 2014.

    None of this is a guarantee, of course. If teams like the Blue Jays and Nationals don’t generate as much revenue as expected — or if (when, really) a revenue sharing payor like the Astros turns into a payee due to a revenue drop — the Yankees will get a larger rebate on their revenue sharing payment. We also have no idea how exactly they calculated their potential savings either, but I’m guessing the club evaluated several scenarios before deciding to scale back payroll. And yeah, I’m willing to bet at least one of those scenarios involves missing the postseason and losing out on millions in playoff revenue.

    http://riveraveblues.com/2013/01/ros...cipated-81599/
    Last edited by RCSownsU; 01-23-2013 at 06:19 PM.

  2. #2
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    Seems like a no brainer to me if I owned the Yankees.

    Get under the damn 189. Period.
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  3. #3
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    Quote Originally Posted by LeoYankee View Post
    Seems like a no brainer to me if I owned the Yankees.

    Get under the damn 189. Period.
    The plan should obviously be to get under the 189M in the future and to be able to sustain enough success prospect wise to stay there. That said, I don't think getting under the 189M in 2014 at all costs is really a no brainer.

    How much money will the Yankees lose out on if they put out a crappy team in 2014 (which seems very possible) compared to how much they will save by cutting the payroll? We've already seen the stadium half empty at times with a good team. There were a ton of empty seats in the playoffs. Yankee Stadium will be a ghost town if the team sucks.

    I'm all for the team lowering payroll and staying under in the future. The smart thing would be to do that slowly and at a time when they have the prospects to contribute to the big league team.

  4. #4
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    Quote Originally Posted by TallicaFan87 View Post
    The plan should obviously be to get under the 189M in the future and to be able to sustain enough success prospect wise to stay there. That said, I don't think getting under the 189M in 2014 at all costs is really a no brainer.

    How much money will the Yankees lose out on if they put out a crappy team in 2014 (which seems very possible) compared to how much they will save by cutting the payroll? We've already seen the stadium half empty at times with a good team. There were a ton of empty seats in the playoffs. Yankee Stadium will be a ghost town if the team sucks.

    I'm all for the team lowering payroll and staying under in the future. The smart thing would be to do that slowly and at a time when they have the prospects to contribute to the big league team.
    Or they can lower the price of tickets...

    And maybe not have a damn hot dog cost $9
    Last edited by TrueYankee; 01-24-2013 at 12:35 AM. Reason: I spelled "cost" wrong. Will I get banned again?

  5. #5
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    i still dont get why people are upset by this. being the highest payroll has netted us 1 title in the last 10 years while smarter spenders win the WS. lets try it their way
    30 Team Stadium Checklist: 10 to go

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  6. #6
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    People are upset because the team is putting a worse team out there for 2013 than last year. Why wouldn't people be upset by this? There's no direct benefit to us as fans. Ticket prices aren't going to be lowered, the team isn't gonna be better or even as good as before. The only benefit is to the owners.

    Like I said before though. I think this should be a goal for the future. But forcing it for 2014 when theres not likely to be a lot of our best prospects able to contribute is kind of looking like it could be a disaster.

  7. #7
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    I don't think smarter spenders mean not spending at all either.

    The Yankees catching situation is literally the worst in baseball and they have done nothing to upgrade it at all.

    Spending a lot of money only got the team 1 WS but anyone who thinks going into the season with our catching options and Nunez/Canzler as DH is going to get us another 1 is a little crazy.

  8. #8
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    Why is everybody so excited by Hal getting to pocket an extra forty million? What can this possibly do for us as fans? Do you really think we will see any benefit from this? Are they going to have 8 dollar hot dog wednesdays?
    That new stadium was built to accommodate corporate fat cats who want to be seen associated with the big winner in town. Not the die hard fan who sits in the bleachers, come rain or shine. People paying 250 dollars and more for a seat won't tolerate rebuilding.
    People talk about spending smarter. You need to develop smarter before that works. If three years from now we have an amazing new core built around Sanchez, Austin, Williams, Banuelos, Pineda, okay, then we can supplement with some smart spending. But who knows if that's even going to happen.
    Don't forget our success precludes us ever getting that top 5 pick which "smarter" teams use for franchise anchors.
    We are basically over the 189 threshold because Hank gave A-Rod that ridiculous contract. Hank is gone.
    This team is about to take a prolonged swoon and that 40 million savings will be lost to playoffs missed, lower attendance, and the degradation of the Yankees brand. Remember the 80's.

  9. #9
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    Quote Originally Posted by jango2000 View Post
    Why is everybody so excited by Hal getting to pocket an extra forty million? What can this possibly do for us as fans? Do you really think we will see any benefit from this? Are they going to have 8 dollar hot dog wednesdays?
    That new stadium was built to accommodate corporate fat cats who want to be seen associated with the big winner in town. Not the die hard fan who sits in the bleachers, come rain or shine. People paying 250 dollars and more for a seat won't tolerate rebuilding.
    People talk about spending smarter. You need to develop smarter before that works. If three years from now we have an amazing new core built around Sanchez, Austin, Williams, Banuelos, Pineda, okay, then we can supplement with some smart spending. But who knows if that's even going to happen.
    Don't forget our success precludes us ever getting that top 5 pick which "smarter" teams use for franchise anchors.
    We are basically over the 189 threshold because Hank gave A-Rod that ridiculous contract. Hank is gone.
    This team is about to take a prolonged swoon and that 40 million savings will be lost to playoffs missed, lower attendance, and the degradation of the Yankees brand. Remember the 80's.
    You have to blame Hal for A-rod too. He was right there with him when the whole deal went down.

    Quote Originally Posted by Pinstripe power View Post
    i still dont get why people are upset by this. being the highest payroll has netted us 1 title in the last 10 years while smarter spenders win the WS. lets try it their way
    Ppl are upset because they are limiting the one advantage they have. The team isn't the smartest organization in the game and they don't produce high end prospect at a high clip. The one advantage they have is money and they are basically saying let's not use the one thing that makes us great. The money has only netted us one WS but it has made us contenders every yr. Does anyone think the Yankees would make the PS
    17 out of 18 yrs without relying on money. Read the comments in that post from guys like Blake and LK they are cutting their nose to spite their face.

  10. #10
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    But we have Dan Johnson.

    And yes, the name Johnson will be great fun.
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  11. #11
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    The luxury tax, and revenue sharing are not the same thing...

    The yanks getting under the threshold (and last I looked, the difference between last seasons salary and the threshold they are trying to get under is about a-rod's AAS....) will save them big $$$ for 5-6 years....that they can control


    Hoping the Jays and Nats goof off is out of their control...and that is very little money...

  12. #12
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    ticket prices will go down if they arent filling a certain amount of seats, that is a guarantee, the main reason why i enjoy weekday day games, since most people are in work and school you get great seats for half the cost. Im sure primetime games on weekends like vs the mets of redsox will continue to have their high priced seats but if the team fails and the product isnt that appealing they will lower prices until that is corrected.

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