The Budget Crisis Hangover

HANK STEINBRENNER MAKES IT RAINUp until a few weeks ago, it was the opinion of this author that the Yankees would be fine in 2013, but would be screwed in 2014. It’s amazing how a few weeks can change everything. While I will fall short of saying the Yankees will not compete this season since their rotation is still one of the best in the league, at the least it is safe to say it will be a challenge for Joe Girardi and Co. to stay afloat.

Amidst news that Steinbrenner could be abandoning the 2014 austerity budget plan, count me amongst those who think that it’s a foregone conclusion that the unpopular policy is already dead. While the policy is gone, the effects will be felt all through 2013.

Until a few weeks ago, it was promising that the Yankees could, and probably would compete. Nick Swisher’s power was not replaced, but Ichiro could make up for it in other ways and would play better defense. Russell Martin was gone, but he was a wreck at the plate last season anyway, and there was hope that Austin Romine could step in as a viable replacement. A-Rod was out, but Kevin Youkilis would provide some relief on that front. Who knows, the Yankees might even be better off without Alex. Yes, Jeter and Mo were coming off injuries, but come on, they are Jeter and Mo! At that time, I was still a believer.

Then Curtis Granderson goes down with a serious injury after being hit by a pitch. That one hurt, but most saw through Granderson’s power numbers and were not impressed with his lack of ability to hit for average anyway. Then in a moment the Yankees chances in 2013 took a major hit when Teixeira went down with a serious injury. It’s an injury he and the Yankees will have to be extremely cautious with, because they have a tendency to linger and ruin careers. Not that this last part was a surprise, but subsequently Austin Romine was sent down and it was announced that none other than Francisco Cervelli was going to be the opening day starter at catcher.

The Yankees are now left with a team sapped of power and are being forced to make signings like Brennan Boesch. This all comes down to what I like to call “the budget crisis.” It was short-lived, but the lessons from it will never be forgotten by Hal Steinbrenner. Bad things happen when the New York Yankees stop spending money. To be completely fair to Steinbrenner, no one could have predicted these two Spring Training injuries. The injuries, however, would not have been as significant if the Yankees were trotting out Nick Swisher in right field and Russell Martin at catcher. In fact, Swish could have even played first.

Hal’s punishment for his mistakes is what will amount to a one year hangover following the budget crisis.

As bad as 2013 has the potential to become, however, it actually improves the outlook for 2014. If Hal Steinbrenner has even a smidgen of the old man in him (and I think deep down inside he does) then he will spend with a vengeance for the 2014 team. Robinson Cano won’t be going anywhere. Hal and Cashman will have free agents such as Adam Wainwright, Josh Johnson, Brian McCann, Tim Lincecum, Matt Garza, Hunter Pence, Curtis Granderson, and Nelson Cruz to throw money at. Someone will bite.

All money aside, the Yankees top four prospects will all be knocking on the door by 2014 if all goes right. In fact, nine of BBDP’s 10 best prospects in the Yankees organization should all be in Triple-A or above by 2014. Furthermore, 14 of their top 20 will be in Triple-A or above. It’s also possible one or two who are in Triple-A and above in 2013 could show they belong. Any and all of these players could also be used to obtain big bats in a trade. Let’s be real though, prospects aren’t what is going to save this team in 2014, spending money is.

The last time the Yankees won a World Series was also the last time they went on a spending spree. Obviously such spending cannot happen every year, but nothing close to that amount has been spent ever since. 2008 was also a year when the Yankees missed the playoffs. 2013 is shaping up to be that type of season.

The 2013-2014 off-season is teeing up to be a big year of spending for Hal Steinbrenner and the Yankees. All of the ingredients to a Steinbrenner spending spree are slowly mixing together in a container of shame, bad luck, and failure.  It took four years of frugality and no championships to reach that point, but the Yankee way will be restored soon enough.

Let me go on the record as saying that I don’t think anything Steinbrenner did was wrong in trying to get the budget under control. A few things happened that were out of the team’s control and thus the plan failed. That said, Hal knows it’s time to pick up the pieces the only way a Steinbrenner knows how, by making it rain on the MLB.

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50 Responses to The Budget Crisis Hangover

  1. Luke says:

    Spending money? Really? That's why we're in this mess in the first place. We're paying mega bucks for stars who aren't producing.

    • gcorcoran says:

      That's certainly one argument. I would argue that they're in this mess because they stopped spending money before their farm system was ready to replete their talent.

      • ldubinsky says:

        you really wanna argue that the Yankees stopped spending???

        the payroll is $210 million. perhaps you're replete with plaints and unwilling to admit that any team with $62 million dollars worth of position players on the DL is going to look a little thin.

        • greg corcoran says:

          Actually I never made any such claim. In fact I stated very clearly that I didn't think Steinbrenner did anything wrong, but that due to factors outside of the teams control his plan has failed. If we kept Swisher and Martin these losses wouldn't have hurt nearly as bad.

          All I said was that the team isn't going to be good this year and the main reason for that is because Steinbrenner wasn't willing to spend money on what would have been reasonable deals for Swisher and Martin. Again I don't think he was wrong for that, but the fact is the Yankees would have been better if he had spent the money. Also, as stated below, total spending is down. The Yankees have less money invested in players now (including future seasons) than they have in a long time. Thus, spending is actually way down. I also suggest you read the response below about the point of this article.

          • ldubinsky says:

            — " If we kept Swisher and Martin these losses wouldn't have hurt nearly as bad. " —

            Martin's offense wasn't much and would barely have been worth half a win above replacement over the course of 40 games and the acquisition of Youkilis is likely an an adequate offset for the loss of Swisher.

          • gcorcoran says:

            Right, having Swisher and Martin would have made the losses we suffered much more tolerable. Youkilis is a wild card. If he is any bit as bad as he was last year then he won't even come close to replacing Swisher. More importantly, he is meant to replace A-Rod, not Swisher. Again, these losses would have been much less damaging if Swisher and Martin were resigned. Cervelli and Ichiro just aren't going to have the same effect.

  2. dirtywater says:

    Greg-
    Hold on….the Yankees are spending more this year than last year and the team isn't strong. So next year when they actually have to cut spending somehow thats gonna be better?

    Do I have to shake blue and white pom poms when I read this to believe it?

    And you got it wrong Greg, they can't spend until 2014-15 IF they get under the lux tax in 2014.

    • jeff says:

      yes you are right. they will buy everyone in sight once they get the luxury tax to 17.5% for the 2015 season. Then they will be the Yankees of old. We have to put up with 2 really bad years to get there however.

    • greg says:

      Actually you misse the whole point of the article. The point is that all of these aging veteran signings this offseason were because they were trying to get under 189 for next year. So while they are spending more in 2014 they have already cut long term spending compared to every previous season. More importantly, the whole point of this article is that there was a report a few weeks ago that said Steinbrenner is considering abandoning the budget plans. Personally, I feel this is a foregone conclusion already. The Yankees are going to suck this year and the fanbase along with the front office are not going to tolerate that. Thus, there is going to be some serious spending.

      • dirtywater says:

        No you missed the whole point of my reply which your stating "Hal Steinbrenner …. will spend with a vengeance for the 2014 team" is incorrect as is the whole basis of the article. The problem is the Yankees spend too much money on what players were rather than on what they will become. By blowing past the 'cap' next season, the new CBA will have accomplished its task: it will limit how much the Yankees can spend on players for what they will become. So in terms the real budget crisis has yet to come.

        If Hal Steinbrenner takes your cue and blows out the budget next season the draft slotting and IFA spending will be penalized. Hence the Yankees will be caught in its net and not be what they were. 50% penalty on over 'cap' and no revenue sharing kickback. Thats bleeding money and no business can continue pouring a bucket into a tin cup without devaluing itself.

        • gcorcoran says:

          Yes those things are all important. In my opinion though the Yankees are just not yet ready to cut spending like this. They don't have the farm pieces to field a good team while staying under budget.

          Also, how do you know that the whole basis of the article is incorrect? Are you a close adviser of Hal Steinbrenner? Do you have close contacts within the organization? I at least have sources to support my claim that he is done with the salary cap and budget considerations. I am not saying that it's the best thing for the long term, but it certainly is the best thing for 2014. If he spends, the team will be good in 2014, that's a fact. All this article is saying is that I am no longer worried about 2014 because I feel it is a foregone conclusion that Steinbrenner will spend like a maniac. You are welcome to your opinion as long as you acknowledge that it is just that… an opinion. You or I cannot possibly know what's going on in the front office. To me, the writing is already on the wall.. bad season, already considering ditching the plan, fan base dissatisfaction, injuries and failure.

  3. thomas says:

    Greg. What pitchers were out there to sign which in reality would have signed with the Yankees and didn't? Martin would not have made up for the lost of tex and grandy. I would guess that he would have been worse this year than last. Swisher was getting too expensive to keep even if there were no budget concerns, after two more years he will be below average and still getting a ton of money for 3 more years. There will be less and less free agents on the market next year because teams are resigning their guys before they hit the open market. Each team is making a ton of money now than in the past. So even if you have all the money in the world to spend, it will not make a difference. The free agent game has changed and if the Yankees don't change as well, they will be forever in the has been. So far as this year is concerned, I believe that the Yankees will not win over 90 games but neither will any other team in the east division. Each team has improved so much that they will beat each other up all year so that the division champion will be at around 88/89 games and the Yankees will be right there in the mix.

    • gcorcoran says:

      I didn't say anything about pitchers. In fact, I mentioned in the article that the Yankees pitching might actually carry them through the season. I agree that Martin and Swisher wouldn't make up for Tex and Grandy. All I'm saying is the Yankees would be in better position for 2013 if they resigned those two guys. Again, I don't necessarily think Steinbrenner did anything wrong, but his plan did fail. All this article is saying is that his reaction to that failure, IMO, will be to spend… a lot, in the 2013-2014 offseason.

      As far as teams re-signing their free agents… I don't buy it. There will always be players who seek free agency for more money. Agents are too greedy and many players don't like the team they play for or want more money. The free agent game is all about money. Of course there are some players who will take hometown discounts etc, but there will always be guys who make it to FA.

      As far as the Yankees being in the mix, I think there's a decent shot of that happening. I haven't felt less confident in their success in years though. I hope they'll be in the mix, but at this point I'm skeptical. My bottom line is that there is a good chance they'll miss the playoffs, and if they do, Steinbrenner is gonna make it rain.

      • Thomas says:

        "The point is that all of these aging veteran signings this offseason were because they were trying to get under 189 for next year." This is what you said in one of the replies. Aging veterans signing were mo, Andy ,and Korda

        • gcorcoran says:

          Oh I see what you are referring to. Just to clarify I was not referring to Andy, Mo, and Kuroda in my post, but you're right, I should have been more clear about that. I'm referring to the fielders and hitters they signed.

  4. klaus says:

    What are these rumors that the Steinbrenner will spend? I haven't heard them.

    • gcorcoran says:

      http://www.thegreedypinstripes.com/2013/02/hal-st

      River avenue blues also posted a similar article. It was all over the place a few weeks ago.

      • dirtywater says:

        That article is just a fan based hope for the cavalry to charge over the hill. Good luck with that.

        Have you noticed in the past year or so the Yankees have sold off minor league assets and a chunk of their plum TV network? That means assets are being eliminated to hold up operational costs. And thats what you're seeing on the field. There is no way to expnd their revenue base so cost cutting is the only way to maintain profit levels.

        Free spending is what got the Yankees into this mess, not whats gonna get them out of it.

        • gcorcoran says:

          You're making a whole lot of assumptions here. If that is truly the case then you'll be right, but no one knows that for sure. If the Yankees are hemorrhaging money, the reason is not the money they are spending on their team. It starts with season ticket sales. Ticket pricing is another issue.

          And actually, expanding the budget is a great way to expand revenue. We've seen it work in the past with George. You can be cost conscious but honestly that is just not who the Yankees are.

        • gcorcoran says:

          You're making a whole lot of assumptions here. If that is truly the case then you'll be right, but no one knows that for sure. If the Yankees are hemorrhaging money, the reason is not the money they are spending on their team. It starts with season ticket sales. Ticket pricing is another issue.

          And actually, spending is a great way to increase revenue. George Steinbrenner has already proved that.

          Also, about the article, that article was replicated on several other blogs including River Ave. Blues, except that on River Ave Blues the author had a source that is close to the Yankees saying that Hal Steinbrenner was shocked at the fans disappointment in him and that he was ready to abandon the austerity budget. So again, I'm not saying it's a fact that it's going to happen, but I do have a legitimate basis for my opinion. I also acknowledge the possibility that they will continue to try to get under budget, but at this point I think the odds are against it.

          • dirtywater says:

            I'm not sure in this economy if your Steinbrenner model of economics is a smart idea.

            Besides the Yankees ARE selling minor league assets, the Yankees ARE selling media holdings, the Yankess ARE cutting operational costs and the Yankees ARE spending more than they spent last year on salary….and revenue is still falling.

            I'm not sure if any of the sources you claim behind a cloak of secrecy actually are putting on a PR front or in fact if they exist at all. All I am stating is the economic reality you seem to be ignoring.

          • gcorcoran says:

            Yet they have a new minor league GCL team (obviously costs money), have continually expanded their complex in the Dominican Republic, hired a new minor league pitching coordinator without firing the old one (Gil Patterson and Nardi Contreras respectively), have hired high profile scouts for the major leagues, minor leagues, and international scouts this offseason without firing anyone, and as you state their budget is actually higher this season than last. That doesn't sound like a team/organization that is hemorrhaging money to me.

            Hal Steinbrenner fancies himself a finance geek, and that's why he had this austerity budget plan. That's probably also why he's cutting operational costs, selling media holdings and selling shares in YES. These are all things a finance geek would do regardless of how well things are going. While I see your point and I think there is certainly a possibility that the Yankees will stick to this plan, I also think that Steinbrenner may have learned a thing or two from his father. The most important lesson is that winning is the most important thing.

            Finally, there's not "cloak of secrecy." Here are some links to articles that all state that Steinbrenner could abandon the austerity budget plan if things don't go well.
            http://espn.go.com/new-york/mlb/story/_/id/896827
            http://itsaboutthemoney.net/archives/2013/02/20/i
            http://bleacherreport.com/articles/1482956-hal-st
            http://riveraveblues.com/2013/01/hal-steinbrenner

            That's now 5 different sources for you.

            Finally, don't you think that if the Yankees were losing money everyone would know about it? The New York Yankees are a business with investors and shareholders. They must have transparency to their shareholders (although not to the public since they are a privately traded company). That said, when a sports franchise is losing money we always hear about it because those shareholders do talk. I'm not saying it's impossible, but I think we'd have heard about it by now if they were truly losing money.

          • dirtywater says:

            The Yankees expanded their GCL complex because they added a second team. Why? Because the new CBA/IFA limits the amount of money they can spend on players at their Dominican complex which is no Stadium or even Steinny field. Its 4 diamonds and a couple of sheds. See your average Little League complex. In a country where labor costs nothing.

            Wally Matthews speculating as a fan, and an article which sources Wally aren't really all that credible. Before siting articles you have to identify the source, and thier credabilty. Plus you ignored this line:

            "But team insiders told the Post’s Ken Davidoff that the Yankees’ payroll will be less than $189 million in 2014, and that would be the case whether or not New York makes the playoffs this season."

            The new TV deal is less than what they pay in Luxury Tax penalties if they keep their current payroll. Never mind the restrictions on draft slotting and IFAs.

          • dirtywater says:

            The money they lose in revenue sharing kickbacks is 2 to 3 times larger than the TV deal.

            I didn't say the Yankees are losing money , I said the Yankees are losing revenue meaning their profit is decreasing. You don't have to be one of your storied finance geeks to understand at an investor level on a public or private venture when the revenues decrease the profit decreases and the value of your holding returns less. Yes selling YES frees up cash but if the network is as stated more valuable than the team itself and they just gave up. The value is set to increase in 3 years by .8 billion dollars and the Yankees will receive about a third of that for giving up 80% of a revenue stream of a venture which will increase by nearly a third 3 years down the road?

            Why would they do that? How does that add value to Yankees Inc.?

          • dirtywater says:

            They are selling off assets because they need the money for operational costs. Handing out money in Lux Tax fines and losing revenue sharing dollars down the track won't help them and certainly the penalties associated with the same won't help them build from within. These penalties were set up to stop the Yankees from spending money.

            You and Wally don't want ot believe it?… fine….listen to Hal tell you he might do what you want, because he won't be telling fans what he IS doing, that he tells his shareholders because that is who he answers to.

          • gcorcoran says:

            Excellent response. There is a lot of truth the the things you have said. There is also a fair amount of speculation. Some of what you have said, I believe to be inaccurate altogether though.

            First of all, the Yankees did not add a second GCL team because of the lack of money. As an avid follower of the Yankees Dominican Summer League teams and access to scouts who actually go down there and watch these players play, I know that the Yankees international signings outclass any other team in the league as far as the DSL goes. They may not have money to sign players, but they have the most recognizable franchise name internationally and their complex in the Dominican Republic is state of the art compared to anything else out there. They have far and away the best baseball academy in the DR, and the talent in their system shows even though they have severely curtailed their international spending in recent years.

            The reason they added another GCL team, according to anyone you ask within the organization, is that there is SO MUCH talent coming from the DSL and enough talent also coming in from the draft so that there aren't enough innings to go around for all of the players who need them. To me, that's a good problem to have and it's a result of the increased resources the Yankees have put towards international scouting, the draft, and their dominican baseball academy. You may think this is BS because it seems as though you don't always believe everything the Yankees organization tells us (rightfully so), but as someone with knowledge of the system it makes perfect sense to me and I do believe it.

            Next issue, the credibility of my resources. I find strength in quantity and sources of the information. I agree it is important to realize that ideally Steinbrenner's plan is to stick to the budget. He'd have to be an idiot not to if it the team can still be successful. Unfortunately, I don't believe they can be successful at this point without spending more than their budget will allow in 2014. I do still acknowledge there is a chance that Steinbrenner will accept that and not change the plan. It is foolish, however, for you not to accept the possibility that Steinbrenner will decide to spend more than the budget allows. As I said, I believe it is a foregone conclusion that he will, but I'm certainly not going to criticize someone for holding the opposite viewpoint. Again, it's not like I'm coming out of nowhere with this claim, there are multiple resources that state that Steinbrenner is not deadset on his budget anymore. I'm sure he still wants it to work out, but again, who wouldn't?

            As far as the Yankees losing revenue goes, there is one thing that will kill their revenue quicker than anything else Steinbrenner could do for this team, and it's called losing. If they lose, revenue will go straight down the toilet, and then the team will be in actual trouble, unlike this theoretical trouble you speak of which you believe is causing them to sell their assets. Personally, I think its a smart business man hedging his bets. You don't keep all of your eggs in one basket, and any finance expert will confirm that for you. Predicting that the value of the YES network will be worth 8 billion in three years is nice, but you are again making serious assumptions. Obviously if Steinbrenner knew that to be true, he would have chosen different assets to sell. Regardless of that, we are getting far from the original argument here. I am not here to debate the strength of Steinbrenner's financial maneuvering and whether or not he should have sold that much of the network.

            Also, you said they are not losing money, but then you go on to say that they are being forced to sell portions of their company (the YES Network) in order to stay on the plus side of revenue. Which one is it? Again, if they made that sale because they had to we would all know about it. The Yankees are still making money, and again, they are not hemorrhaging money IMO. If they truly sold that portion of the YES network to cover operational costs that couldn't be covered by the company itself, than they are severely behind, and are in more trouble than we thought. They might consider lowering the budget to 150 million instead if that's the kind of trouble they're in.

            As far as answering to his shareholders goes, I think most shareholders understand the concept of investment, given that they are… well… investors. You must spend money to make money. In the Yankees case, they must win to make money, and it's looking more and more like they are going to have to spend money to win. By the transitive property, they are going to have to spend money to make money. This is a concept I do believe most finance people would understand and agree with.

            I am enjoying this debate very much by the way and I give you a lot of credit for all of the research you have put into it. There are two sides to this story and I am glad that we are hashing it all out.

          • dirtywater says:

            Thanks for acknowledging the debate. Too many fans let their team loyalty smear their view of their own team. I enjoy it as well, and in alot of cases a writer, ig blogger doesn’t want his opinion that he has stated questioned in any regard,;it is brave for you to answer responses so honestly and fully and you can consider me a fan of your work. Alot of Yankees fans only see their team with the blinders: Buy us a new guy….

          • dirtywater says:

            I did not mean the Yankees added a second team in the GCL for monetary considerations. The new IFA clause treats the whole spent as a pool. So to drop your 5K or 10K contracts on kids as organizational fillers isn’t allowed. That’s tough in the 3rd world, an unpleasant reality but the MLBPL has dictated to keep the market value of its top players on cue, they are willing to let that slip. So the Yankees create the 2nd GCL team, now I’m not 100% sure and I ‘m not sure how to source the info, but I know teams are allotted a certain amount of US Visas which often determine whether players advance over monetary considerations of the next signings. So in creating the second team do the Yankees in fact give themselves more US visas or do they have to spread that talent across two teams? My guess is the former. Rolling back the DSL investment to a US league probably costs more but given the advantage the Yankees org deep pockets have had in this…well can you see what I’m saying looking at how the new CBA has stung them?

          • dirtywater says:

            Yanks have enjoyed an advantage in the DR by untethered spending. Not that everyone they sign there becomes a star but they fill the lower grades with players they haven’t had to drat and pay for on a US scale. That’s allowed them to pay a higher slot value for those US draft guys.

            Your sources? OK Kinda a pet peeve of mine when 3 articles are written on one person’s speculation on the source may be misquoted or was speculating. Don’t ever source info from the bleacher report or a blog site, pick only credible guys then analyse WHY they say it. Alot of writers out there write to protect their own job. And those print jobs are going away to the guys who can source credible blogs. Wanna press pass?

          • dirtywater says:

            Here’s one to the contrary from the body of our discussion from the NYT. http://bats.blogs.nytimes.com/2013/03/19/for-stei

            Yankee revenue? The increase on the number was 3 billion to 3.8 billion from the source you cited. Not 8 billion. $800 million dollars. Theyre looking at a $300m windfall who knows maybe quote as even high as half, but that isn’t $800K returned to the investors is it?

            OK. To take you through on Yankee revenue imagine raking your yard. Grab a big armful of leaves and then walk across on a windy yard to the trash can. You’re gonna lose half the leaves on the walk.

            Obvious solution? Hire more guys to carry the leaves…well you can’t. New CBA says so and it also says: its getting windier. So you have to figure a way to make your trips across the yard more efficient. Your tree may be growing (and the Mets Oak next door might blow a bit more in your yard har har) but it isn’t as much as is blowing out your arms.

          • dirtywater says:

            The Yankees spend more money than any other team, they make more money than any other team. And to the owners who rake up a larger yard with fewer leaves and then have to watch you finish first ….they want more wind. Yanks gonna make a profit how much they can sustain it is the question. Then how smart with those limited resources they are, they haven’t been. The farm system has suffered. Those long term contracts are crippling as the guys who got them get crippled.

            This 189 number is real.

            Geez sorry for the long reply…not obsessing just running off at the mouth.

          • gcorcoran says:

            So you kind of lost me on the raking leaves analogy there, but it's okay. I never said the 189 number wasn't real. In fact, I think Steinbrenner would still absolutely love to keep it under that level. I have seen him quoted several times, however, saying that the number is only real if he can put a competitive team on the field. If not, he'll overspend it. That's where my article comes in. I don't think they put a competitive team on the field without spending. I can definitely see your side of things. I'm not 100% sure if you are trying to say that the Yankees are going to be good so he will be able to stay under the 189, or that if the Yankees are bad he's still going to stay under the 189. Either way, I just can't agree with you. Perhaps I'm being stubborn, but I don't believe that shareholders control the Yankees. Even if they do, the shareholders will be turning around and running as fast as they can if the Yankees don't make the playoffs this season and can't field a decent team next season, regardless of where the payroll is going to be next season. There's just no way you can convince me that he won't spend if there's a crappy team on that field next season.

          • gcorcoran says:

            As far as the sourcing goes, I think ESPN New York is a credible source. Yes, two of the other sources cited the same guy, but my point in citing those was to point out to you that this wasn't just some bogus news story, it was something that many people read and many people buy into. I understand based on all of your points above that you don't believe it to be true, but you still haven't done anything to prove me wrong. The nytimes blog article simply talks about Steinbrenner not wanting to trade prospects for pricey aging veterans. That I agree with 100%. It says he wants to keep the budget under 200 million. That, I again agree with. What I don't agree with though, is that he will allow the team to lose under his watch with a payroll under 200 million. If they play poorly this season he's gonna have to spend to win. The reinforcements are not here yet, and it's a serious stretch to say they will be in 2014.

          • gcorcoran says:

            I definitely see what you're trying to get at here, but I don't think it works that way. I don't think getting the extra team gives them extra visas. If it does that would be another incentive to get the extra team. If what you say is true, then the choice to get another team makes sense on both fronts, and the reasoning for it most likely is for both of those reasons. Most people didn't realize this was happening last season, but the Yankees actually had 10-12 guys on their GCL team in 2012 who they felt were starters long term. They had Gallegos, Bautista, Rincon, Niebla, Cesar Vargas, Jordan Cote, Chaz Hebert, Hayden Sharp, Caleb Frare, Joey Maher, Daniel Camarena, Rookie Davis and Brady Lail competing for innings all season. Late in the seaosn they had Hensley and Dawe as well. There were not nearly enough innings to go around for all of these guys, and all are legitimate long term candidates to start. To me, this is where the numbers crunch hurt them. Given that they drafted 6 more high school pitchers in 2012 who will most likely start in the GCL next season, with an additional 5-6 pitchers coming over from the DSL, and you can start to understand why they needed the extra team. If they want more visas and this is a way to get them, then I'm sure that couldn't hurt either. I think what I mentioned above is their main reason for starting the new GCL team though.

          • gcorcoran says:

            PS, I'm not worried about press passes. With my job I don't have time to make it to more than a few Yankees games a year let alone get there enough to have a press pass.

  5. Michael Baker says:

    everybody hates this team i actually like this team and i love the pitching…..i think its about time the yankees win another way then the homerun but the real question is what are they gonna do next year when kuroda leaves,pettitte leaves and mo leaves but this year there all here and im happy

    • gcorcoran says:

      That's an interesting perspective. I agree they have an excellent pitching staff, and I agree that the homerun isn't the end all be all. Unfortunately I don't think there are a lot of other things the team does well offensively either. They don't have many guys who hit for average, and they don't have many speed guys (except Gardner and Ichiro). Without Grandy and Tex, this offense is scary IMO. I'm hoping they can tread water until those to come back, but I'm worried the odds will be insurmountable.

  6. Michael Baker says:

    i really hope they do well until the guys get heathcott,williams,austin and sanchez are ready and when they are i think a yankee dynasty will start again like it did in 1995

  7. Yankee$ says:

    Donald Trump should buy the team… Free hair for everyone! Life is short like the Yankees – Move on.

  8. Mark Panuthos says:

    Excellent pitching staff?

    I'll give you one and two (that's a big concession, considering CC had surgery and that Kuroda doesn't regress).

    Pettitte won't last the season without an injury
    Mo is 42 years old
    Hughes – really?
    Robertson – he's a definite maybe
    Chamberlain – love his potential, don't much love his reality. a definite maybe.

    Sorry, not seeing the "excellent" part.

    • greg says:

      I simply don't agree with you at all. CC and Kuroda are as good as almost any 1 and 2 in the league. Pettitte is a number 2 when healthy, which he is right now. Hughes is a #4 who has had success in the past and is now in a contract year. Nova and Phelps will compete with each other (and Hughes) for the 5th spot. This is as good a rotation as you will find for 2013. If you're not happy with it then I believe your expectations are too high.

      Mo already looks back to normal and ST isn't even done yet. DRob was excellent last year and there's no reason to think this year will be any different. Aside from the 8th and 9th innings, its all about depth, and the Yankees have it. Whoever loses out on the 4th and 5th starter competition will be back there too. All three candidates have had success in that role. Joba and Aardsma have had success in the past, and are question marks but that's really okay given that they are 7th inning guys at best.

  9. E.C. says:

    As far as I'm concerned, it is not my money, so if Hal wants to spend in 2014, by all means, I won't stop him. That being said, I have a number of issues with the premises laid out in this article. It is not that I don't believe you have sources that are saying he might abandon the Budget, but it is the arguments you put forth, that as a result of increased spending in 2014, the Yankees will be a better team for it. In regard to one of the comments, the Yankees are a privately held corporation; and as far as I know, GB Packers are the only publicly held sports team. Hal does not have any shareholders to appease.

    Issue 1: "Throwing Money" at 2014 Free Agents

    Looking at that list above which starts with Wainwright, he is the only player worth spending money on. Everyone else is an average player, at best. Sure, pure speculation on my part, but indiscriminately throwing money at free agents is not a sound business model. The contract it will take to sign Wainwright, if he has the kind of season projected by baseball people, which is Top 3 in NL Cy Young, you are looking at a minimum of what Greinke got this offseason. Wainwright turns 32 this season, and anything above a 3 year deal is extremely risky at best, not accounting for the fact, an extension isn't signed first. On the FA market, if he has a competent agent, he will be asking for at least 5-7 years. The Yankees have a track record for overpaying free agents, who end up as busts when all is said and done. CC has been the only good free agent signing in at least a decade. More about this below. Of course that is not true in reality, but reality in the terms of the Yankees fans' and analysts, the Yankees did "nothing" this offseason. Looking with a discerning eye, that is clearly untrue. Free agent contracts have become outrageous overpays in the last few years. These contracts, are at least a contributing fact, leading to this cost cutting purgatory.

  10. E.C. says:

    Issue 2: Spending money guarantees a winning/successful team.

    The Yankees have won one World Series in the last 12 years. Sure, they spent all of that money in 2009 and won a championship. But how are those contracts looking now? A.J. Burnett couldn't even make the postseason rotation in his second season, and he was throw out with the bath water before his contract was completed. How is Teixiera's contract looking? The last three seasons his stats have taken dive off a sheer cliff, with jagged rocks at the bottom. If not for his superior defense ability compared with almost any other 1B in the league, fans would be begging to have him shipped out of town. Sabathia? So far, completely worth it. He is a stud and workhorse. But he is coming off of elbow issues last season, and elbow surgery in the offseason. He turns 33 this season. We have him locked up for 5 more years. If he averages out as a No. 3 starter for the rest of his contract, then best deal the Yankees have made since Scott Brosius. If you define successful as making the playoffs every season only to be humiliatingly knocked out in the First Round, then by all means, beg Hal to spend. By continuing the past spending patterns, that is the fate for which the Yankees are destined. Again, if that sounds good to you, make it rain. That does not sound good to me. In fact, I would rather the Yankees miss the playoffs for the next two years, and have a potential outfield of Mason Williams, Tyler Austin, and Gardner/Heathcott/Z. Almonte, with G. Sanchez at catcher and Angelo Gumbs at 2B. Granted, prospects rarely pan out, but these are all above average to lower end elite players for pennies on the dollar, if they come close to their potential. Call me a terrible fan (you won't Greg, but probably another commenter will), or some other negative name, but I like the chance of being a perennial WS contender with elite young talent for a decade, than a ceiling of repeated early eliminations. With the new Wild Card game, it is not out of the realm of possibility, that should this out of control spending continue, the Yankees are eliminated in the Wild Card game 3 out of the next 5 seasons. Give me losing seasons over perpetual mediocrity.

  11. E.C. says:

    Issue 3: The Yankees would have been better off re-signing Swisher and Martin.

    Martin's 2012 line: .211/.311/.403. With a steep decline starting 5 years prior. If that is not enough, I would be willing to wager that the Cervelli/Stewart/Romine platoon ends up being more valuable then Russell Martin this season. That all that needs to be said about that.

    If Swisher's 2017 option vests, he will become the highest paid player in Indians' franchise history. You should read the previous sentence again. Go ahead, I'll wait. Finished? Well, considering the teams they had in 1995 and 1997, that is laughable. Not to mention the numerous Hall of Famers to play on the Indians at some point. Give me David Justice, over Nick Swisher any day. Anyway, to have Swisher for this year, the Yankees would have likely needed to come close to the Indians' offer. For argument sake, let's say he matches his 2012 line (which I think he doesn't come close), what does Swisher give you that is better than approximately 5 weeks of random platoons and the rest of the season of Granderson? Is it worth it to pay him $50+ million to play for a month in the outfield and cover for Tex at first for however long he remains injured? That is what re-signing Nick Swisher gets you. I'll pass. If the parade of scrubs manages to hit .240/.320/.410 with 5HR, 8R, 10RBI in the first 5 weeks, consider it a push.

  12. E.C. says:

    Last Issue: Re-signing Cano

    If its true that the Yankees are saving up to pay Cano, then they are about to make a more asinine transaction, than trading for Vernon Wells. If recent large contract haven't taught the Yankees that contracts for 6+ years, for players 30 and older at the time of signing are a bad idea, then I don't know what will. Cano appears intent on testing the market, and you know some fool, in some front office will think it is a good idea to offer 9-10 years, ~$230M. The Yankees will not and should not offer anything over five years $100M. We all know Scott Boras will decline such an offer faster than it takes to shred the paper on which the offer is written. It has been well noted that Cano has a terrible work ethic, and clearly shows no hustle whatsoever. I for one will be cackling like a hyena being tickled by a feather, when whatever team signs him, ends up stuck with an average player with 5 years left on the contract.

    I for one, hope that Hal has some cajones, ignores the chatter of the fans, and sticks to his plan of cutting the payroll under $189M. If a team needs a payroll above $200M to be competitive, the baseball executives need to reconsider their effectiveness at their own jobs. I am calling it now, the Dodgers do not make the playoffs this season. You heard it hear first folks. I ask all Yankees fans to join me in hoping for reduction of payroll, otherwise we can all look forward to the Yankees becoming the New York Knicks of baseball.

    • Greg Corcoran says:

      E.C., you make a lot of valid points. I respect your opinion and you express it quite well. Personally, I don’t think it has to be one extreme or the other. I’m hoping that the Yankees go out and spend some money on good free agents, and at the same time give some prospects a chance to succeed. I’ve always been an advocate of phasing in 2-3 prospects per year and seeing how it works out. Personally, I don’t think this budget should be a consideration. As you astutely pointed out, however, it is Hal’s money.

      Interestingly and of note, ticket prices have steeply declined in recent days because of the injuries that have taken place. I believe this is a reflection on the lack, or type of money spend this off season. I also believe that sending out a team filled with prospects and no free agent signings in 2014 will result in an even further drop in ticket prices, and thus loss of money for the organization. This is why I believe the Yankees will spend, right or wrong (you’ll note that I don’t really say one way or the other in the article as far as what I would like the Yankees to do). I do feel, however, that if they spend money in the right places and stop worrying about this silly budget, they will be better off both short and long term. They already have the prospects that could help them in a year or so, and there’s plenty more in the pipeline. I don’t see that trend stopping any time soon either.

      Eventually, IMO, this will pay off for them, and there doesn’t have to be a period of 2-3 crappy years to do that. They can phase in top prospects as they phase out aging veterans, one expiring contract at a time. When there is an expiring contract that doesn’t correspond with a top prospect (or at least a future major league average type player), then you bite the bullet and sign a free agent to whatever contract the market dictates. This, to me, should be the way the richest sports franchise in the world should “rebuild.” In the case of 2013, it’s tough to say what Steinbrenner should have done. No one could have predicted all of these injuries, so re-signing Swisher probably wasn’t an option. Now knowing that Russell Martin could have been had for 1 year, 9 million dollars though, I think they should have re-signed him. Overall I don’t think there’s any way Cervelli/Romine/Stewart come near Martin’s production. Trust me, I’m not a huge Russell Martin fan, but his average only tells part of the story from last season and he did come on strong towards the end of 2012. For one year, I’d have taken him for sure.

      I will say this though. This offseason the Yankees encountered a situation where they had expiring contracts with no top prospects ready to step in. In the case of the outfield, they did the right thing and signed Ichiro. Then Granderson got injured. That sucked and really wasn’t management’s fault. In the case of the catcher situation they had no one ready to step in and chose to be cheap instead of signing Martin to a one year deal. They graciously accepted a downgrade for a discount. That never would have happened with George Steinbrenner. Personally, I think that was the wrong move.

    • Greg Corcoran says:

      I hear what you are saying and there is certainly an ongoing debate on whether Cano will be worth it depending on how much his contract will be for. The bottom line is I don’t think the Yankees will have a choice. He is far and away their best hitter and there is no one who can replace him on the open market. His production is huge in the Yankees lineup and there’s no one on the market or in the system to replace that. I see that your position is that your willing to lose for a few years in hopes that some of the prospects develop to be big time players. Personally, I don’t think it’s the right choice to wait that long for a franchise that makes as much as the Yankees. There’s definitely a movement amongst a certain sect of fans who all agree with you. Most of us would rather compete year in and year out. Personally, I don’t think the early exits are a result of the Yankees spending money, I believe it’s because they’ve spent money in the wrong way and on the wrong people. In addition to that one has to admit that the MLB playoffs can be a bit of a crapshoot. Those teams in the late 90′s were amazing. They were a super team where everything went right. They are one of the best dynasties in the history of sports. I hope that some day the Yankees can attain that again, but I don’t necessarily think the road to that team is in prospects alone. There has to be some serious spending too.

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