Home Maury Brown Difference Between Yankees and Lowest Payroll Team (1999-'09)

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Difference Between Yankees and Lowest Payroll Team (1999-'09) PDF Print E-mail
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Written by Maury Brown   
Saturday, 26 December 2009 21:29

I will be on Sirius/XM Radio (MLB Homeplate on XM175, Sirius 210) at 12:30pm ET/9:30am PT with Jim Duquette discussing the 11 year end of year payroll figures.


There was such interest (and good discussion) around the publication of the ranking and salary figure totals for all MLB clubs over an 11 year period (End of Year Salary Totals for MLB Over 11 Years (1999-2009)) that it seemed appropriate to add to the discussion.

One aspect is whether there should be a salary cap and floor in Major League Baseball. The question that is attached is whether the Luxury Tax is suppressing spending, and whether revenue-sharing is incentivizing lower revenue making clubs to spend more on player payroll. What is displayed below is the highest and lowest end of year salaries for MLB over the same 11-year period. In each instance, the Yankees hold the #1 position while the last ranked club (#30) has shifted between three clubs, the Marlins, Rays (four times, each), and Twins (three times).

Here's a chart representing the percentage of difference between the highest and lowest over 11 years:

Year Most Least % of diff Teams
1999 $91,990,955 $14,650,000 628% Yankees Marlins
2000 $95,285,187 $16,723,347 570% Yankees Twins
2001 $115,478,346 $27,411,912 421% Yankees Twins
2002 $133,429,757 $34,728,540 384% Yankees Rays
2003 $180,322,403 $31,660,602 570% Yankees Rays
2004 $187,918,394 $24,427,167 769% Yankees Rays
2005 $207,152,931 $26,615,413 778% Yankees Rays
2006 $207,461,320 $21,124,332 982% Yankees Marlins
2007 $218,311,394 $31,817,020 686% Yankees Rays
2008 $222,519,480 $27,003,450 824% Yankees Marlins
2009 $220,024,917 $37,532,482 586% Yankees Marlins

 

What should we make of the numbers? Is it the Yankees outspending? Is it adjustments to revenue sharing that have caused the fluctuations? Select Read More to see an explanation

When adding in the percentage of increase/decrease for the Yankees and the #30 club in terms of player payroll spending, we get a much clearer picture of why there is undulation over the years.

The Yankees have, for the most part, remained steady in the amount spent. Remember that the figures presented over the 11 years do not take into account inflation, so the increases each year are not always as much as they appear. With the exception of the 2002 to 2003 jump (26 percent), the Bronx Bombers, while spending far above their counterparts, and regardless of having increased spending recently just on pace with the rate of inflation, as the trendline below shows, their increased spending increases at a rate higher than the lowest payroll clubs over the same period.

 

Yankees (1999-2009)
1999 $91,990,955
2000 $95,285,187 3%
2001 $115,478,346 17%
2002 $133,429,757 13%
2003 $180,322,403 26%
2004 $187,918,394 4%
2005 $207,152,931 9%
2006 $207,461,320 0%
2007 $218,311,394 5%
2008 $222,519,480 2%
2009 $220,024,917 -1%

 

The reason for the fluctuation from year to year over the 11 year study is attributed to, not the increased spending of the Yankees, but rather the erratic behavior of the lowest spending clubs (Twins, Rays, and Marlins). One reason for the fluctuations could come from contracts that have backloaded figures; salary increases in each year of a multi-year contract. But, the most logical explanation would be that low-revenue making clubs aren't afforded a steady stream of revenues with which to work from. Where the Yankees have a strong brand, steady attendance, and solid revenues from the YES Network and sponsorships, these streams ebb and flow with the underlings, mostly in times when they are winning (up swings).

 

 

30th Club (1999-'09)
$14,650,000
$16,723,347 12%
$27,411,912 39%
$34,728,540 21%
$31,660,602 -10%
$24,427,167 -30%
$26,615,413 8%
$21,124,332 -26%
$31,817,020 34%
$27,003,450 -18%
$37,532,482 28%

 

So, in a larger sense, the focus for parity should be more acutely focused on the bottom of the league's spending, and less so on the upper reaches, especially with the Yankees. While there is little denying that a methods to constrain runaway spending on their part needs to be addressed, the real need is in providing more sustainable spending in the bottom quartile of the league. In 2006, adjustments to the CBA's revenue sharing system were designed to incentive the low-revenue makers to invest in player payroll at the major league level. While some clubs have made attempts, most have seen that revenue-sharing disincentives them from spending on player payroll. With increased centralized funds, why spend to win? In the past, winning was the only method insure revenues would come into your coffers. Now, there is less incentive to do so. Still, as the trendline shows, there has been increased spending over time, even in the midst of the erratic up and down of the lowest club's spending over the last 11 years.

When the next CBA is reached (the current agreement ends in December of 2011), look for further tweaking of the revenue-sharing system to get the low spenders to increase spending, and increased penalties with the Luxury Tax (should it be held over in the next agreement) to try and stymie the Yankees from overspending.

In the end, fans should spend more time focusing on the bottom, instead of the top (the Yankees) where there is increasing talk in favor of a salary cap. As the old adage goes, you're only as strong as your weakest link.


Maury BrownMaury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is available for hire or freelance. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.

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The reason for the fluctuation from year to year over the 11 year study is attributed to, not the increased spending of the Yankees, but rather the erratic behavior of the lowest spending clubs (Twins, Rays, and Marlins). The most likely reason for the fluctuations would come from contracts that have backloaded figures; salary increases in each year of a multi-year contract. But, the most logical explanation would be that low-revenue making clubs aren't afforded a steady stream of revenues with which to work from. Where the Yankees have a strong brand, steady attendance, and solid revenues from the YES Network and sponsorships, these streams ebb and flow with the underlings, mostly in times when they are winning (up swings).

 
 
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