Yankees austerity plan collapses under its own weight

Jim McIsaac

...So it seems safe to assume they'll re-sign Robinson Cano, if nothing else.

Beginning in 2005, the Yankees set franchise attendance records undreamt of even in the days when they would oversell the original Yankee Stadium to the extent that they would cram 85,000 or 86,000 in a building that sat roughly 58.000 (the number varies depending on the source and the year). Spurred on by good teams, an overheated economy, and the knowledge that the old ballpark was in its last days, 4 million fans spun the turnstiles that year, and more came every season through 2008. Then the economy cratered, the new ballpark proved to be a sub-Disneyland reproduction of the old that showed contempt for the average fan in the concrete moat that separated the high rollers from the plebes and the severely unfriendly comportment of the Gestapo-like security personnel who all but shout, "Papers please!" as ticketholders try to get to their seats, and it turned out there just weren't enough hedge fund managers to fill the lower dish. The club still routinely drew over 3 million, a benchmark the team first reached in 1999, but the loss of nearly 600,000 fans from the team's 2008 peak had to hurt. Since then, attendance has dropped off a bit more each year -- last year's 3.542 million attendance was the best in the American League, but also the team's lowest since 2003.

The Yankees crossed the $200 million payroll threshold for the first time at the same moment they drew 4 million fans. They dropped back under 4 million in 2009, both the first year in the new ballpark and a championship season. Thus was the team's investment decoupled from rewards. It was in this atmosphere of diminishing returns that the team conceived of its plan to reduce payroll to $189 million, enough to reset their luxury tax penalties and allow them to receive rebates on monies paid into the revenue-sharing system. Now Jeff Passan of Yahoo! reports that the Yankees are backing away from the plan due to the rewards being less than they had initially projected.

"They're going to be over 189," Passan quotes a source as saying. "They know it. Everyone knows it. You can't run a $3 billion team with the intentions of saving a few million dollars." This is a point that probably should have been obvious all along. Whatever savings the Yankees initially projected -- and it was apparently thought to be substantial, in the vicinity of $50 million -- the combination of a high-priced ballpark and low-priced (by their standards) team was going to discourage attendance and thereby retard revenues. Kids are still in school and the weather has been poor, so the value of current attendance statistics is limited, but so far the Yankees have averaged 6,000 fewer fans per game than they did last year. Should that trend continue, at an average ticket price of $63, the Yankees will have dropped $30 million in revenue -- and that's before we consider how many hot dogs and beers those fans might have purchased.

It seems not to have occurred to the Steinbrenners and their proxies that a fanbase conditioned to big-name players and marquee-level signings might discourage attendance. It wasn't so much that the fans were in love with Nick Swisher and Russell Martin as that the team didn't replace them with anyone notable -- Ichiro Suzuki may be a beloved future Hall of Famer, but that's for past work with the Mariners, not present work with the Yankees. Compared to what the Yankees usually do, the whole thing smelled of a downgraded product being fobbed off on the fans. It might have been different had the team some top prospects ready to go, but the kids are at minimum a half-season away, so an old and lackluster team stayed that way. Throw in a congeries of injuries to lead actors Derek Jeter, Alex Rodriguez, Curtis Granderson, and Mark Teixeira, and the lack of walk-up to date is understandable.

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In essence, the Yankees were poor-mouthing their own product, telling fans that they would have to put up with an inferior show -- that's what baseball is, after all, an entertainment -- so that the owners could pocket a few more dollars. Notably, they were not dramatically reducing prices to go with their newfound parsimony. In short, the Yankees' austerity campaign played about as well with the public as Europe's has, and has had about the same efficacy in producing positive results. Adding Vernon Wells, however well the move has worked out on the field, was too little too late, and smacked of more bargain-basement activity besides with the Angels picking up a good deal of the tab on a player who had been at or below replacement level in three of the previous four seasons.

The pinstriped austerity plan was always doomed because of the way the team's payroll is structured. As I wrote in regards to Robinson Cano's upcoming contract earlier this season,

As long as the Yankees were prepared to keep spending $200 million or more on players, they could survive contracts like Rodriguez's, but as the team's current lineup suggests, if you're going to draw the line on payroll but have huge blocks of it tied up in just a few players, your flexibility vanishes. The Yankees have seven players making $15 million or more this season, including Cano. In the absence of a fertile farm yielding above-average, minimum-salary players, you have no ability to cope with injuries, free-agent defections, or players aging out of their value. There is little to do but wait for the contracts to end and hope the farm system can cover the gaps.

Ever have one of those 15 tile puzzles when you were a kid, where you had to put the tiles in the proper sequence?

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The Yankees have that kind of problem with their payroll -- there are only so many ways you can divide blocks of $20 million or more into $189 million or even $200 million. The cup fills up too quickly to field a quality team, particularly if the organization is reliant on veterans. Now that there is apparently a good deal less money to be had by getting under the cap, the penalty has reverted to what it always was, the price that Major League Baseball exacted from the Yankees for the privilege of having the New York market -- just one more cost of doing business.

Yankees fans are as loyal as those of any other team, but they're not stupid. Give them a good product and they'll come out. Charge them top dollar, make them feel like peons in the process, and tell them that they'll have to suck it up with Francisco Cervelli for a couple of years while the Steinbrenners get their wallets in order, well, they might sympathize, they might tch-tch at how super-genius moves like re-signing Alex Rodriguez after his 2007 World Series opt-out put the team in this position and accept that a purging of bad humors was necessary to get the club back on a sound financial footing, but they weren't going to pay for the privilege of watching it happen.

Call Yankees fans spoiled if you like, but even continuing to win, as the team has this year, wasn't going to be enough. The organization has conditioned fans to believe that this club was above going through rebuilding cycles. Winning was the prerequisite for buying a ticket, not the incentive. Now that the austerity plan has collapsed for lack of adequate rewards, we can see that the Yankees have achieved something even harder than the old sadder-but-wiser lesson "Got what you wanted/lost what you had." They lost what they had, and they won't be getting what they wanted either. For all their efforts, they've reaped nothing but disinterest.

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