After a year of raking Yankee fans over the coals of cost cutting, Hal Steinbrenner has reportedly abandoned his plan to lower the team’s payroll below the luxury tax threshold in 2014. Is it too soon to say “I told you so”?
Over the last several months, I’ve written extensively about the motivation for and wisdom of the Yankees’ proposed attempt to slash payroll below $189 million (see index of posts below). Although the potentials savings were undeniable, it was hard to fathom why Steinbrenner would risk doing damage to the Yankees brand when the team’s finances were so robust. Ultimately, I concluded that Steinbrenner was either underestimating the task of maintaining excellence on a budget, or overestimating the loyalty of Yankee fans. And, sure enough, with attendance down significantly, and Joe Girardi fielding a make shift lineup every night, both of those miscalculations have come to fruition.
The Yankees have already started to face some early fallout from the team’s belt tightening, and, according to reports, it’s been a rude awakening. Yahoo!’s Jeff Passan is now reporting that the team no longer intends to pursue its goal of getting below the luxury cap, having realized the enormous difficulty of the task. If only Hal Steinbrenner had read the Captain’s Blog!
Passan’s report relied on anonymous sources, so the death knell for Plan 189 will have to wait until someone in the Yankees’ front office goes on the record. However, it is encouraging that the organization has finally realized the flaws in its fiscal logic. Unfortunately, it’s also a shame they weren’t able to do so sooner. Had the Yankees realized it made little sense, and cents, to run a premium brand on a no frills budget, some of the team’s austerity-based decisions could have been avoided. Instead, the Yankees find themselves with a depleted roster playing in front of increasingly smaller crowds, a trend that could worsen if the team’s injured superstars don’t return sooner than later.
It would be easier to forgive Hal Steinbrenner and his financial advisors if their attempted plan was simply an ill conceived idea that failed under the weight of its own unrealistic assumptions. After all, who doesn’t want to have their cake and eat it too? However, Passan’s anonymous source makes it sound as if the Yankees never really expected the plan to work. If so, the organization’s decision to abandon its budget amounts to the franchise telling its fans, “just kidding”! It’s bad enough that Yankees jeopardized the 2013 season on a whim, but if the team fails to make the post season, the last laugh could belong to its season ticket holders.
“It was a good idea to try. But deep down, we all pretty much knew it wasn’t going to happen.” – anonymous Yankees official quoted by Jeff Passan, Yahoo!, April 26, 2013
The Yankees are not obligated to spend an unlimited sum on salaries, and, perhaps, they might be better off shifting some of their focus from free agent signings to player development. However, by going cold turkey, that plan was destined to fail. The Yankees’ proposed cost cutting initiative was never about streamlining roster management or improving organizational depth. It was based entirely on the potential cost savings from immediately dipping below the luxury tax threshold. That’s why the team targeted 2014, instead of a more sensible period later in the future. And that’s why it looks like the status quo will remain. I told you so? Not really. It’s what everyone, including the Yankees, probably figured all along.
Past posts regarding the Yankees’ Plan 189.
Making Sense, and Cents, of an Extension for Robinson Cano – February 9, 2013
Flaw in the Yankees’ Budget Plan? Breaking Down MLB’s Revenue Sharing System – January 23, 2013
Yankees Need to Renegotiate Position on Contract Extensions – January 19, 2013
Hal Steinbrenner Gives State of the Yankees; Raises More Questions than Answers – January 10, 2013
Can Yankees Use CBA Loophole to Avoid Luxury Tax in 2014? Would Selig Let Them? – November 29, 2012
Are Yankees Headed For Fiscal Cliff? A Closer Look at Team’s Plan to Cut Payroll – November 28, 2012