JoePos on Forbes Business of Baseball

I hate the Yankees.  Many of you here already know that.  But what elevates them above normal rivalry hate, like the Redskins or Spurs, or even media hype hate, like the Lakers or Brett Favre, is that I think they are bad for baseball.  They have a system set up that keeps a neverending cycle going of continued growth; faster than anyone else can keep up with.

Today, Joe Posnanski has an article up that looks at the latest Business of Baseball numbers from Forbes.  In it, he looks at the claim that he keeps hearing from front office executives that it isn't the Yankees payroll that concerns them so much as it is their revenue.  Some highlights:

But people who know a lot more about accounting and such have told me for a long time that payroll is not the issue -- REVENUE is the issue. And when you look at the Forbes numbers, yes, it does seem to ring true that salaries are driven by revenue and not the other way around... that is to say that your ticket price didn't go up because Roy Halladay got a $60 million extension, but instead Roy Halladay got a $60 million extension because of the price of your Philadelphia ticket (and all the other Phillies revenue streams -- the Phillies made $233 million in revenue in 2009, sixth-most in baseball).


OK, well, last year, according to the Forbes numbers, the Yankees made $441 million in revenue* and spent about $416 million on baseball. That means they spent 94.4% of their revenue on baseball, a nice high percentage.

And the Royals? Well, they only made $155 million in revenue, and they spent about 146 million. That means they spent 94.3% of their revenue on baseball.

*According to Kurt Badenhausen over at Forbes, revenue figures INCLUDE revenue-sharing -- that is to say the Yankee revenue numbers are calculated AFTER the $100-plus million they give to revenue-sharing. And the Royals revenue numbers are calculated AFTER the $30-plus million that they took out.


For those too lazy to click the Forbes link, here's the top 5 teams:

1. New York Yankees, $441 million
2. New York Mets, $268 million
3. Boston Red Sox, $266 million
4. Los Angeles Dodgers, $247 million
5. Chicago Cubs $246 million

The Rangers were 12th at $180 million in revenues.  The Rangers were also 1 of 3 teams with Debt/Value ratios over 80%.  The Yankees (89%) and Mets (81%) have new stadia, so this makes sense.  The Rangers Debt/Value ratio is 105%...and I see no new stadium in Arlington.  Finally:


...when you actually look at the numbers you realize how ridiculous it is for Yankees fans to say that Kansas City and Pittsburgh and Oakland should just "try harder." There is no trying hard enough to make up anything close to the gap. Yes, a few teams have the resources to at least battle the Yankees advantage -- though the Mets' horror show is living proof that you can screw up with a lot of money.

But it doesn't matter how nice a ballpark they build in Pittsburgh, or how much they win in Oakland, or if they go to 3D baseball on television in Cincinnati. It doesn't matter how much they may tinker with revenue-sharing and luxury taxes... the Yankees' revenue stream is so enormous, it will give them a gigantic competitive advantage that should make them the favorites to win every... single... year.

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