August 22, 2006
Yanks Seeing Red
The New York Yankees are losing money even as they're winning games, General Manager Brian Cashman said.
The team's highest-in-baseball payroll, revenue-sharing outlay and other expenses eclipse its revenue, Cashman said in an interview on Bloomberg radio's ``On the Ball,'' to be aired this weekend.
``We're making a lot, but we're spending more than we're making,'' Cashman said. He declined to say how much the team is losing.
The Yankees this year became Major League Baseball's first team worth more than $1 billion, according to Forbes magazine's annual valuation published in April. The team had a baseball- best $277 million in revenue, Forbes said.
Forbes said the Yankees lost $50 million last season before interest, taxes, depreciation and amortization because they paid $77 million in revenue sharing to less wealthy clubs.
The New York Daily News reported in December that the team lost between $50 million and $85 million last season, even while becoming only the third team ever to draw more than 4 million fans to home games. Neither publication cited anyone from the Yankees organization.
I have to wonder - does the loss include the money made from the YES Network? I wish they would be clear on this.
Sure, it's a separate "company" from the Yankees. But, to not include YES in the picture would be like saying that Aquafina lost money for Pepsi last year - and then ignoring how much money Pepsi made on their cola line of drinks.
Posted by Steve Lombardi at August 22, 2006 08:46 PM
I remember reading the Forbes article and the $277 revenue number included an estimate of what YES would have to pay for the cable rights if they were seperate companies.
Step one to financial recovery was taken last weekend: the catering bill was cut in half after Ponson was released.
I don't know, this kind of reeks of "cooking the books." As far as I know a baseball owner hasn't made a profit in 100 years, yet every time a team goes up for sale, people line up to buy them and the value always goes up, up, up. But I don't blame them, that revenue sharing is bullshit--it's one thing if it went into the team and not the owner's pockets.
exactly. the next CBA has to include a minimum salary cap.
"Step one to financial recovery was taken last weekend: the catering bill was cut in half after Ponson was released."
Is it too early to nominate a "Comment of the Year"?
I'm guessing that it doesn't include the YES profits... though you never know.
My only complaint about last night's game was actually using Villone. I'd rather he got some rest too.
As for losing money, I'm guessing that it doesn't include YES money. Businesses like to do that, especially around tax time. And once they start spending money on the new stadium, the revenue sharing money goes away. Or is that only the luxury tax money?
The Yanks are following the same financial formula of any successful, privately held corporation. Steinbrenner is paying himself a nice, healthy salary pre-tax, which increases the team's expenses, thus decreasing their profit, which means no taxes to pay on that non-existant profit. At the same time, the value of the team has been increasing at a rate of 15% over the past 30+ years. So while the "Yankees" may be showing a loss, Steinbrenner and company are doing just fine.
$77 million and so little to show for it. You'd think those slum dwelling teams would put that money to good use.