Skip to content

Great Moments in Probabilities: Yankees $200 million payroll edition

Mar 20, 2013, 9:55 AM EDT

Hal Steinbrenner

There’s a profile of Hal Steinbrenner in the New York Times, talking about his leadership of the Yankees and his quest to bring down the payroll and get under the Luxury Tax threshold. Fun quote:

“My firmly held belief is that you don’t have to have a $200 million payroll to be world champion … And the historical data that led me to that conclusion is rock solid.”

Fun analysis from commenter silhouetted by the sea over at Baseball Think Factory:

5 times the Yankees have had a $200 Million payroll-2005 and 2008-2011-and they are the only team to ever have one. They of course won 1 World Series. Thus, teams with a $200 Million payroll have a 1 in 5 chance of winning the World Series.

Which, as others note, is way better odds than all teams in history without $200 million payrolls. Ahem.

OK, in all seriousness, Hal is right. You don’t need mondo payrolls to win it all. But you do need good, healthy baseball players. And the concern for the Yankees at the moment is that they don’t have enough of those. Payrolls, then, are sort of a red herring.

  1. yankeepunk3000 - Mar 20, 2013 at 10:19 AM

    well we have the most expensive DL list and THAT’S something….oh well true Yankee fans remember the 80s and early 90s…and were with me cheering them on. its not like theyre gonna lose 80 games but realistically winning 85 is probally where I see them. ah well it was a good 15 year ride I do declare

    • mybrunoblog - Mar 20, 2013 at 10:47 AM

      It’s been more like an almost 20 year run not 15 years. Anyway the landscape has changed soooo much in that time frame. A generation of Yankee fans have been spoiled by winning. The Yankees built a $1.5 billion stadium that they have to pay for. Yes, fans like you and me will still go see them play (probably not as frequently) but the casual fans will bail and if the Yanks draw say only 3 million or 2.5 fans then look for your cable bill to go up because the beast needs to be fed.

      • sabathiawouldbegoodattheeighthtoo - Mar 20, 2013 at 11:18 AM

        I actually prefer rooting for homegrown heroes, even if the team isn’t as good. Free agency left me raging against a guy one year, and cheering for him the next. I feel like a schizo fan sometimes. While the Yankees might, conceivably, suffer performance-wise by allowing the payroll to drop, it might actually improve the fan experience if done right.

        On the other hand, that team and its assets will continue to print money. Does this all just mean that Hal prefers to pocket the difference as opposed to investing in the best team possible? Hopefully a reduced payroll results in lower ticket and concession prices (though I am not holding my breath). Kind of like a Loria move on a much grander scale.

  2. alang3131982 - Mar 20, 2013 at 10:27 AM

    I wonder what the winning percentage is if you adjust salaries for inflation…

    • jwbiii - Mar 20, 2013 at 12:22 PM

      If you adjust payrolls for “baseball inflation,” total revenue per team, the Yankees have had a $200M payroll every season since 1994. Other $200M teams in 2012 dollars: 2004 Bos, 2003 NYM LAD Atl, 2002 Bos Tex Ari, 2001 Bos, LAD, 1999 LAD Bal Tex, 1998 Bal, 1996 Bal, 1995 Tor Atl, ChW Bal Cin, 1994 Atl Tor SFG Det Cin KCR ChW Bal LAD Bos ChC.

  3. dowhatifeellike - Mar 20, 2013 at 10:38 AM

    You don’t need a $100 million payroll to be world champion either, but I bet there’s a strong correlation between payroll and winning percentage.

    • jwbiii - Mar 21, 2013 at 9:43 PM

      Over the past three seasons, the correlation between winning percentage and payroll is .323, which is just over the line between moderate and weak and nowhere near strong.

  4. churchoftheperpetuallyoutraged - Mar 20, 2013 at 10:39 AM

    The team known as the Yankees has been in business since 1913. That’s 27 WS in the last 100 years, or roughly 1/4. So merely being the Yankees is better odds of winning a WS than a $200M payroll…

    • jwbiii - Mar 20, 2013 at 11:58 AM

      That’s 1903. They were known as the Highlanders before 1913 but it was the same team with only a minor uniform change: the 1912 Highlanders wore pinstripes, the 1913 Yankees didn’t.

      http://exhibits.baseballhalloffame.org/dressed_to_the_nines/uniforms.asp?league=AL&city=New+York&lowYear=1908&highYear=&sort=year&increment=9

      So, no, the Yankees didn’t adopt pinstripes to make Babe Ruth look slimmer.

      • churchoftheperpetuallyoutraged - Mar 20, 2013 at 1:49 PM

        yes, I meant when the team was specifically known as the Yankees.

  5. deathmonkey41 - Mar 20, 2013 at 10:45 AM

    Not sure about the rest of my fellow Yankees fans, but I’m glad that Hal has become the team’s spokesman and Hank has fallen back into the shadows. Hank was his father’s son- just nowhere near as charasmatic.

  6. Jeremy T - Mar 20, 2013 at 10:50 AM

    If you completely start from scratch and ignore existing contracts, then sure, you don’t need $200 million to win a championship. The Yankees have no such luxury. There’s enough dead weight on the Yankees payroll that their minimum threshold in order to compete is about $100 million higher than most teams.

  7. eshine76 - Mar 20, 2013 at 11:18 AM

    Hal’s doing the right thing given all of that dead weight. They aren’t a WS team this year, so why pay the luxury tax? Luckily for Yankees fans, you know that the money is there, so when the team is younger and needs that one bat or arm to put them over the top, they’ll get him.

    As a Mets fan, I’d love to have that type of level-headed thinking from ownership and the trust that the front office is doing things for the right reasons. I’m waiting for Fred to pop up with: “See guys? Look at what Hal said about payroll and championships. I told you…”

  8. spedman24 - Mar 20, 2013 at 11:37 AM

    Yankees will be irrelevant by Memorial Day and the “good seats” will be empty ALL YEAR…welcome back to the mid-80′s w/Robbie Cano starting as a much better Donnie Baseball.

    • mybrunoblog - Mar 20, 2013 at 1:00 PM

      Hey skippy if your gonna troll the Yankees get your story straight. During the “mid 80s” 1984 thru 1988 the Yankees never won less than 85 games and even won 97 games in 1985. Considering the current playoff schematic a few of those Yankees teams would be playoff teams if they played to those win totals today.

      • cackalackyank - Mar 20, 2013 at 9:00 PM

        While I agree with Bruno about some of those eighties teams I have to kind of agree with Spedman with one minor exception…Robbie Cano will be switching uni’s for a trade up on the current farm system prospects, not following in the steps of Donnie Baseball. More likely he will working FOR Donnie Baseball.

  9. bmorelikeme - Mar 20, 2013 at 11:40 AM

    This sparked a bit of google curiousity that led to me finding this graph.

    http://www.graphoftheweek.org/2012/02/new-york-yankees-payroll-vs-everyone.html

    Just something interesting enough to share.

  10. muscles1331 - Mar 20, 2013 at 12:12 PM

    Next year the Yankees will most likely see this happening:
    Mariano Rivera’s $15 million – gone
    Kuroda $15 million – likely gone
    Pettitte $12 million – likely reduced if he wants to keep pitching
    Granderson $15 million – gone
    Hughes $7 million – likely gone
    Joba $2 million – likely gone
    Youkilis $12 million – gone
    Burnett’s contract payed off ($9 million hit this year)

    If you add that up you get $87 million dollars that are freed up next year. If you re-sign Cano at double his salary and predict Pettitte takes a modest $2 million cut and resigns for $10 million, that still gives your roughly $62 million off the books. Factor in that they need to get under $189 million, and that gives them about $40 million to play with (having already included Pettite and Cano in those calculations).

    Their likely needs will be: LF, possible 3B, possible C, 2 SP’s, 2 bullpen arms and resigning Jeter. With Montgomery lighting up the minors, he is a cheap alternative to Joba in the pen. The Yanks minors are also chalked full of OF’s giving them another possible cheap replacement. As for SP’s, they could field a rotation of CC, Kuroda, Pettitte, Nova and Phelps (all in house solutions) if they needed to. Etc, etc, etc.

    All I am basically saying with this longwinded post is that the numbers show that it is possible for them to field a very competitive team in 2014 while coming in under the luxury tax. They could conceivably trade for Headley if Gyorko shows he is the real deal, sign Brian McCann and add a number 3 type starter with their projected payroll flexibility and still get under 189. If A-rods contract didn’t exist, this whole discussion would be a non-issue. Heck, since the luxury tax is calculated using contracts AAV, extending Arod for 2 years at $5 million per would free up another $4 million in 2014 if they really had to. It would pay for itself in savings and they could always cut him at that price when/if he get to those years.

    • 18thstreet - Mar 20, 2013 at 12:49 PM

      When the Yankees needed a third baseman, they paid $12 million for Kevin Youkilis.

      With those guys leaving, what makes you think they can find a value replacement for ANY of them. Fine, Kuroda’s gone. So they’ll pay someone else $15 million. Ditto Granderson. Etc.

      • churchoftheperpetuallyoutraged - Mar 20, 2013 at 2:09 PM

        $15 million. Ditto Granderson. Etc.

        Because, assuming no injuries which isn’t exactly a given with this team, they already have the 2014 OF on the team. Tyler Austin would come up and play LF, switch Gardner into CF and keep Ichiro in RF (2 year deal). That’s a full outfield for about $10M.

        Like above, assuming he actually stays healthy, Romine should take over as starting C with Cervelli as a backup.

        The Bullpen really isn’t an issue even when Mo retires. Robertson will slot in as closer, Montgomery will likely be up this year with the rest filled in by the farm system/cheap alternatives.

        This is Jeter’s last year, but with an $8M player option he’ll likely pick it up, but it’s still a saving of $9M. Arod/Teix are entrenched at the corner spots leaving Cano’s spot available. As mentioned above, they do have the room to pay for him.

        That leaves SP an issue, as the Yanks will likely lose their #2 and #3 pitchers in Kuroda and Pettitte. Again, if no further injuries occur, Pineda will be back to full strength next year and Phelps can replace Hughes. They still need one more pitcher but they have plenty of money to spend.

      • 18thstreet - Mar 20, 2013 at 4:33 PM

        Long-time Yankee hater here, but: when was the last time the Yankees developed a prospect? Eduardo Nunez is going to be getting a lot of at bats, I suppose he counts, but he was already 24 when he was signed as an amateur free agent (G-d bless you, Sean Foreman and Baseball-reference!).

        Robinson Cano was called up in 2005. Brett Gardner, 2008. I wouldn’t get too excited about whoever is waiting in the minors if I were you. They haven’t really been panning out recently.

    • dowhatifeellike - Mar 20, 2013 at 1:01 PM

      Within the next two years most of last decade’s dead weight will be gone.

      Which means they will start adding to this decade’s dead weight. They already have a solid base of Arod, Jeter, and Texiera.

    • mybrunoblog - Mar 20, 2013 at 1:03 PM

      Excellent post. Well done.

  11. Old Gator - Mar 20, 2013 at 12:26 PM

    It would be great if all the teams could get under the luxury tax. They could starve Scrooge McLoria out, make him sell the Feesh, and then they could all go on a free agent signing binge again.

  12. randygnyc - Mar 20, 2013 at 1:55 PM

    Muscle, you forgot to mention the cost saving prospect of getting an effective Pineda on the mound.

    • 18thstreet - Mar 20, 2013 at 4:35 PM

      Yes, you can always count on young pitchers recovering from injuries. They always come back.

    • muscles1331 - Mar 20, 2013 at 5:23 PM

      Yeah reading the comments that was a pretty big oversight. Props to Church tho for picking up on that

  13. jfk69 - Mar 20, 2013 at 3:56 PM

    Ok Hal I get it. But when they don’t make the playoffs under your new budget constaints,will you apologize to New York fans like your dad did when they didn’t win in the playoffs?

Leave Comment

You must be logged in to leave a comment. Not a member? Register now!

Featured video

This was 'the perfect baseball game'
Top 10 MLB Player Searches
  1. G. Springer (3886)
  2. I. Davis (2937)
  3. C. Kimbrel (2820)
  4. B. Harper (2750)
  5. M. Machado (2688)
  1. M. Cuddyer (2645)
  2. C. Granderson (2487)
  3. J. Chavez (2390)
  4. J. Reyes (2331)
  5. K. Calhoun (2231)