New York Yankees co-owner Hal Steinbrenner stopped to speak with reporters this morning and ended up delivering a sermon on fiscal responsibility and how it pertains to baseball. While it may seem strange for the owner of a team that’s spent more on payroll than any other franchise in the sport for the past fourteen seasons to talk about budget consciousness, Steinbrenner is very aware of the increased luxury tax repercussions of the new collective bargaining agreement.
Hal Steinbrenner publicly confirms that the Yankees are trying hard to get under the $189 luxury tax threshold by 2014
— Daniel Barbarisi (@DanBarbarisi) March 1, 2012
According to Steinbrenner:
Plenty of teams win without the kind of payrolls we have. You can field every bit as good a team with young talent.
Indeed you can. Or, perhaps more accurately, you could.
As MLB attempts to bridge the supposed competitive parity gap that exists between small and big market teams by handing out extra draft picks to franchises that don’t earn as much revenue as others, the new collective bargaining agreement has severely limited the ability of teams to invest outrageous fortunes in young talent by implementing caps on draft spending and signing bonuses for International free agents.
So, when Steinbrenner speaks of teams that have been able to win without the type of payroll structure that the Yankees employ, he’s most likely thinking of the Tampa Bay Rays and their stocking of draft picks or anticipating the results of the Texas Rangers investment in Central American prospects. Unfortunately, the window for taking advantage of such opportunities is either closing or already shut.
The irony is that in the owners’ attempts to curb spending, they’ve limited the one area which likely offered the biggest bang for their buck. It surprises me that the Yankees wouldn’t have wanted to avoid massive luxury tax penalties earlier. With their revenues, they could have afforded to make a far more aggressive push at the draft, and in the International free agent market, without it raising their payroll or the tax that they pay.
Under the new collective bargaining agreement such a strategy seems impossible. However, there are 30 front offices in baseball filled with rather intelligent people. It will be interesting to see how franchises attempt to exploit the rules and the direction that the majority of teams take under the new guidelines.
In other words, perhaps Mr. Steinbrenner has something up his sleeve to maintain the Yankees level of success without breaking the bank.