Thursday, March 8, 2012

Do You Believe The Yankees Will Reach $189m?

Imagine each penny is worth $1 million.

A few times now I've talked about the Yankees goal of getting at or under a $189 million payroll in 2014, in order to avoid paying even more in Luxury Tax and Revenue Sharing fees to MLB. And there's been plenty of talk about just how important that goal is to the team.

A week ago Hal Steinbrenner confirmed that it is indeed the goal of the team to reach a payroll of $189 million in two years, and month ago I took a look at the possible roster in 2014 to see if the Yankees could sign Cole Hamels this offseason and get there.

Well, there's nothing new to report on this, however MLB Trade Rumors polled their readers on this subject. They asked if the Yankees would get to $189 million in 2014, and as of right now their readers don't think so, as over 70% of readers said "no".

Personally, I'm leaning towards "no" as well. Although it's possible for them to get down to that level of payroll, I believe winning is way more important to them. And knowing that winning is very important to the team's revenue, that opinion is strengthened. Basically, the team could save around $50 million in 2014 by getting at or under $189 million (the real number is impossible to know, but the final number seems to be in that area). But if the team misses the playoffs in 2014, they could lose more than $50 million in ticket sales, merchandise sales, playoff perks, etc. So it wouldn't make sense, financially, for them to be okay with missing the playoffs in order to reach $189 million.

The Luxury Tax and Revenue Sharing fee is based on the final team payroll, not the payroll at the beginning of the season. Which means any pick-ups during the season via trade, or whatever, counts. So this is a conversation that will happen until the 2014 World Series is over with, and possibly longer if the team misses their goal and decides to try again in the future.

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Sorry for the Capatcha... Blame the Russians :)