Parsing the Yankees’ free agency trepidation

It’s big free agent time, which means that it’s... kind of weird that we’re not talking much about the Yankees. They traded for James Paxton, sure, but that could have happened in any offseason; they have so far whiffed on Patrick Corbin by refusing to offer him a sixth year, balked at a fourth year for Nathan Eovaldi, and are seemingly out of the Bryce Harper sweepstakes, leaving Manny Machado as the only viable Bronx Bomber option, aside from some small additions here and there.

I could be wrong, of course; the Yankees have even in recent years panicked when they wanted to spend, like when Hal Steinbrenner and co. compensated for their Robinson Cano money by acquiring Brian McCann, Carlos Beltran, and Jacoby Ellsbury. The former two were decent deals that netted solid prospects in trades, and the latter was an unmitigated disaster. They also signed Masahiro Tanaka to a seven-year deal, one of only three pitchers (including CC Sabathia and Mike Mussina) to get such a deal over the last fifteen years.

Since then, the Yankees have been awfully quiet as they rebuilt with the likes of Luis Severino, Aaron Judge, and Gary Sanchez. Their biggest signings since then have been Chase Headley for four years and $52 million, and Aroldis Chapman for five years and $86 million.

That doesn’t exactly sound like George Steinbrenner’s Yankees, and that’s because they are unequivocally not that team. In a recent press conference, Hal said the following on the luxury tax threshold:

“We’re going to keep adding pieces that we need to add. We’re going to get to the threshold, and if I’m not convinced we’re at where we need to be, we will keep adding pieces.”

In theory this sounds reasonable, largely because the Yankees have done this in the past, and he even used Tanaka as an example. If they need to get better, and the only pieces available will put them over the threshold, then they will do it.

But it ignores an important point about that earlier period, which is that there were contracts on the books that almost necessitated decent-sized signings to keep them afloat during the rebuild; Alex Rodriguez, CC Sabathia, and Mark Teixeira were worth maybe five wins in total between them a year, and yet they took a bite out of a third of their anticipated payroll.

The thinking was, though, that once those behemoths were gone, then they could “reset” under the new luxury tax and spend without concern, with the background of increased revenue and valuation after the creation of the new stadium. Well, that hasn’t materialized, and it came to most fans’ attention in the past few years that this trend has been brewing for a while:

The Yankees’ payroll peak was around the height of the Red Sox rivalry, which makes sense, and began to turn the corner after their last World Series win (shockingly, as they gained more revenue and value). When comparing their inflation-adjusted payroll to their inflation-adjusted Forbes valuation, it’s even more stark:

If anything, this is baseball writ large in a nutshell. Owning a baseball team is, essentially, printing money. As an owner you possess an intellectual property that cannot be infringed upon in an industry with a legalized monopoly, and you also have a regional monopoly (depending on the market, but absolutely in New York) over media rights. Because the DOJ’s stipulation in the FOX/Disney merger is that they must sell off regional sports networks, YES Network will be up for sale, and Amazon, private equity, and even the Yankees attempting to buy it back, are involved. The last sale, just five years ago, was for $3.9 billion.

In one way it’s good—other teams are involved in free agency, and the field of teams trying to compete has expanded to a degree with the introduction of that same lucrative TV money. But they also set a bad example, both because a good third of the league is actively tanking, and the teams that do have this revenue locked up are trying to use the luxury tax as a hard cap to bring down costs as a way to silently bring about the changes they wanted in 1994.

If this becomes the norm, then we’re going to see this look all-the-more farcical in the future. The Yankees were running something like a $250 million inflation-adjusted budget on $275 million revenue, and a valuation of less than a billion dollars, in 2005. By 2020-ish, the team will be running a $205 million budget with $600+ million in revenue and a near-$5 billion valuation.

Alright, fine, you want to cap the major league salaries, then for God’s sake, pay your minor leaguers a living wage. And drop the kayfabe and just admit what the goal is here: we are going to be limitless in value, but our on-field talent is getting a hard cap, no questions asked. If the New Core passes by without a championship, even the very-flawed George Steinbrenner understood that that wasn’t something fans would understand or sympathize with, no less in our new Gilded Age.