New York Yankees: The Myth of Their Payroll and Why a Salary Cap is Bad for MLB
November 8, 2010 · Evan Fein · Jump to comments
Article Source: Bleacher Report - New York Yankees
The Yankees payroll is about average, maybe even smaller than it should be.
I hate to use juvenile terminology, but you people who complain about it are whiners and haters. Most reasonable observers agree that the the Yankees and the star powered teams that they field are great for the business of the other 29 teams. However, I will go further than that. I can say with reasonable certainty, that their payroll really isn’t that high at all.
New York City is expensive. Well, New York State is expensive, the city itself will bleed every penny you have. We are easily one of the most heavily taxed states in the country. Sure the city has much to offer, but it all comes at the price of a sales tax that is almost nine percent.
That extra nine percent is added to a premium of anywhere between 25 and 100 percent that we pay on almost all goods and services. The premium is the result of higher rents and transportation costs. We pay these premiums using money that is subject to extra city payroll taxes that total about four percent of your income. I won’t even try to explain New York State’s property taxes and other small taxes that don’t even make sense to me.
I think the point I’ve made here is obvious: The Yankees pay their players well, but the players pay their state well in turn. Alex Rodriguez made $25M-plus as both a member of the Rangers and the Yankees, but he pocketed a lot more of that salary as a member of the Rangers.
Money is an object, but it is a relative object. In order to successfully compete in a dynamic marketplace, the Yankees and the Mets must entice free agents with salaries that are much higher in absolute terms, because in real terms, the purchasing power of those salaries is much lower.
Speaking of the marketplaces, let’s take a look at the Yankees market. The New York metropolitan area has a population of about 19 million people. Since there are no baseball teams besides the Yankees and the Mets in New York State, you can add on another 10 million people who are New Yorkers yet don’t reside in the city itself.
So, the Yankees and the Mets have to their selves a marketplace of almost 30 million people. And to be quite frank, who cares about the Mets?
The exact extent of the Bomber’s international appeal is unknown, but it is surely bigger than any other team in MLB. Sorry other 29 teams, but you just don’t have as many people living in your market. So while the supply of baseball remains constant, the demand for baseball increases. It is only fair that the Yankees benefit from these extra revenue streams.
Actually, everyone benefits from the Yankees extra revenue streams. Despite complaining from the “small-market” Boston Red Sox, most owners love it when the Yankees come to town. The 27-time world champions probably bring in more spectators when they visit Baltimore than the Orioles do.
Owners don’t care who you root for once you’re in the stadium, as long as you part with your money. This popularity is fueled both by the Yankees having a roster loaded with stars and the mere storyline of having a perennial power house that other teams want to beat.
Still not convinced?
Do you still think that having a salary cap would create a more fair world for the have-nots? You’re forgetting what makes the MLB different from the NBA and the NFL. The MLB is loaded international players from Latin America and Japan.
If baseball modeled its draft and payroll system similarly to the other two sports, it would create an impossibly difficult situation for aspiring Latino players. There would be little incentive for clubs to invest money in Latin America and try to discover the next big talent.
Even if there was a way to incorporate these players into the draft system, teams could easily cheat the salary cap by offering cash payments to family members in foreign countries. In all likelihood, teams wouldn’t even bother going south of the border.
That would be a shame considering stars born in Latin America put so much money into hospitals, churches and charities of their home countries. We take it for granted that those evil Yankee dollars mean clean water for a poor child overseas.
Fortunately, there never will be a salary cap in baseball. It is in the interest of almost all parties to allow teams to spend freely and invest in their product. But unfortunately, many ignorant fans will continue to blame the Yankees for all the ills in the baseball world.
Their efforts would be much better spent protesting their own team’s failure to invest in quality ball players. Hatred of the Yankees is not based on of reason or logic. It is based on jealously and a failure to understand how baseball and the economy works.
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