Former Red Sox president Larry Lucchino once called the Yankees the “evil empire,” but he misplaced his Star Wars metaphor. The Yankees are actually Luke Skywalker, flying a rebel X-wing, trying to blow up the Death Star before it can demolish baseball.
With MLB and MLBPA primed for a work stoppage, only the Yankees can save the sport. The Phillies showed them how.
Something strange and wonderful happened in Philadelphia last year. They threw money around with abandon, signing Bryce Harper, Andrew McCutchen, and David Robertson. They traded for Jean Segura and J.T. Realmuto. The total obligation for these five players was $468.5 million, and team payroll increased 54 percent from $104 million to $160 million.
Across MLB, we’ve witnessed countless sacrifices at the altar of “financial flexibility.” If bottom lines are as stagnant as so many owners imply, this blithe spending binge should have crippled the Phillies, with minority investors abandoning ship before the hull cracks under the weight of Harper’s contract. Instead, the Phillies franchise value increased by $150 million, from $1.7 billion to $1.85 billion.
While a franchise’s value matters most when the owners cash out, the increase indicates projected revenue well exceeds expenses, even with nearly half a billion in new contracts. In fact, with rare exception, every team’s value increases every year, regardless of player payroll. This most likely means MLB makes SOOO much money that player contracts barely cause a ripple.
In spite of this, MLB teams have held a more or less constant line with regards to spending. Teams rarely exceed the
salary cap luxury tax threshold, despite massive profits and consistently skyrocketing franchise values. This is even more egregious given that the tax hasn’t kept pace with revenues:
Sent this last night:— Joe Sheehan (@joe_sheehan) December 11, 2019
The tax threshold was $170M in 2010, and $197M in 2018, a jump of 16%. MLB revenue jumped from $6.1B in 2010 to $10.3B in 2018. That’s a 69% jump. If the threshold had moved with revenues, it would have been more than $250M two years ago, and higher today.
Blame collusion, or analytics, or whatever you want. MLB teams spend less and less on players every year, relative to total revenue, as BtBS’ Matt Provenzano demonstrated. They have locked shields on spending like a Spartan phalanx, and the result is a windfall for owners that would make Scrooge McDuck blush.
Breaking the Line
The phalanx was effective in battle because of the discipline of each soldier. If panic spread through the line, it could fall apart. It only took one rogue for it to start cracking.
This is where the Yankees enter the fray.
In case you’ve been unplugged for the last 36 hours or so, the Yankees landed Gerrit Cole on a nine year, $324 million contract. This fits well with their lingering reputation from the halcyon days of George Steinbrenner, but in recent years they’ve become enamored with the tax cap just like the rest of the league. The “evil empire” hasn’t really gone nuts in free agency since signing Masahiro Tanaka and Jacoby Ellsbury in 2014 (though they traded for Giancarlo Stanton’s big contract two years ago).
The timing and size of the Cole signing is significant. The Yankees were one of three teams surpassing the tax threshold last season. The other two— the Cubs and Red Sox— both hinted that they need to slash payroll, even shopping around star players such as Kris Bryant, Mookie Betts, Willson Contreras, and David Price.
The Cubs and Red Sox are attempting to rejoin MLB’s spendthrift phalanx. On the other hand, the Yankees are running away from the group, blowing past the tax limit with Cole’s record deal. Perhaps they’ve realized there shouldn’t have been a phalanx formation in the first place, and that these soldiers working together are supposed to be competing with one another! Besides, the ever-climbing franchise values show that money is constantly flowing, and the Yankees are closing in on a $5 billion valuation.
Let’s look into the future a little. Imagine the Yankees once again become a franchise of which George could be proud, and they sign one of the biggest free agents every year. Maybe they snag Mookie Betts or George Springer next winter, and Kris Bryant or Noah Syndergaard the year after. Payroll could easily surpass $300 million before the collective bargaining agreement expires after 2021.
In that scenario, what happens to the rest of baseball? Will the other 29 teams be content to let the Yankees win 120 games? Some will, but others won’t. The Dodgers, Red Sox, and probably a few others—maybe the Phillies, White Sox, Angels, or whoever— will spend big to keep up. Could you imagine the headlines in Boston if they didn’t?
If five or six teams openly flout the tax limit, it will swing power towards the MLBPA in negotiations. MLB will have less leverage to cry poverty when multiple teams contradict them, and they will have a hard time proving they even need a luxury tax at all. With the phalanx breaking apart and money shifting slightly back towards the players, the two sides might be close enough in bargaining that they can avoid a work stoppage.
Even if you hate the Yankees, a Bronx dynasty is better than no MLB baseball at all. Unfortunately, the above scenario is unlikely. Too many things could go wrong. With only one more winter to go before the end of the collective bargaining agreement, there just might not be enough time for one franchise to drag the rest into a reasonable payroll bracket. The relationship between players and owners may have already deteriorated beyond repair.
Besides, the superstar salaries were never the real problem. Baseball needs to dramatically increase pay for mid-tier free agents, pre-arbitration players earning league minimum, and the entire 40-man roster. Even if the luxury tax was eliminated, it would do little to alleviate baseball’s overwhelming wealth disparity, and these issues should be a major focus for the MLBPA in negotiations.
Additionally, the Yankees aren’t likely to veer too far from the rest of the payroll pack. With Cole in tow, they’re trying to shed J.A. Happ’s $17 million salary— only partially because of his ineffectiveness last season. More likely than not, they will have a relatively quiet offseason a year from now, letting other suitors pursue Betts and Springer. They’ll still probably exceed the tax limit, but not enough to make other teams play catch up.
Still, the blueprint for preventing a work stoppage exists. The Yankees aren’t the only team with this power, but they’re the most likely to wield it, and hopefully save the sport. If they don’t, it seems nearly certain that we’ll lose a lot of baseball in 2022.
Daniel R. Epstein is an elementary special education teacher and president of the Somerset County Education Association. Tweets @depstein1983.