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Where do the Yankees rank relative to the league in reinvesting revenue into payroll?

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The Yankees’ profit margins look great compared to the rest of the league.

New York Yankees owner Hal Steinbrenner Photo by J. Conrad Williams, Jr./Newsday RM via Getty Images

Earlier this week, I summarized the Yankees recent history of reinvesting payroll into revenue. If you haven’t read that yet, you should check it out before continuing this piece. The gist is that over time, especially in the most recent five seasons prior to the pandemic, they have very consciously kept payroll stagnant while revenues have exploded.

You could spin that as the team not doing the most possible to put a dominant roster on the field. The New York Yankees main competitive advantage is their ability to spend above and beyond any other franchise because of revenue they bring in. I started by comparing the team to its previous self because it’s important to understand the gravity of that competitive advantage.

When moving towards comparing the Yankees to the rest of the league, you’ll most likely become even more frustrated. Why? Well the most recent iterations of Hal Steinbrenner’s Yankees are not flexing the might that is their pocket. Let’s start with their immediate competitors in the American League East. As you know, they share a division with extremely low spending teams in the Rays and Orioles, so the expectation is that they are at least reinvesting more than those teams specifically.

It’s abundantly clear that Hal has become more conscious of his team’s payroll since the CBT threshold has entered the fold. In 2018, the Yankees ranked dead last in the division when it comes to reinvesting revenue into payroll. In their mini-rebuild years when the roster was mainly constructed of the Baby Bombers, the team didn’t necessarily have prime aged players who were imported via free agency to support the extremely talented young core.

This could be explained by the Yankees not expecting to be such a great team so quickly after selling off a few players, but once it happened, I’m not sure there is a valid excuse. The team had the opportunity to add another star or two to the fold and they had the “financial flexibility” to do so. I know, I know — they added Giancarlo Stanton, but truly, he doesn’t make all that much money from the Yankees in the grand scheme of things. They could have added Stanton and more while still being the most profitable team in the league.

Prepare yourself for a long table of data. For the purpose of not having too many lines or dots on a chart, I ask you to scroll down this table which is in ascending order and find your beloved New York Yankees. This data is from the 2017-2019 seasons. It won’t take you long to realize that all three of those Yankees seasons are in the bottom third of payroll/revenue, including two in the bottom 11. This is all in terms of percentages.

League Wide Payroll/Revenue

Year Team payroll_share
Year Team payroll_share
2019 Rays 25.53
2018 White Sox 26.32
2017 Brewers 26.75
2017 Padres 26.8
2019 Pirates 28.68
2018 Yankees 29.52
2018 Phillies 31.29
2018 Rays 31.36
2019 Orioles 32.34
2017 White Sox 33.01
2019 Yankees 33.07
2019 Marlins 33.79
2019 White Sox 34.14
2019 Padres 34.78
2017 Phillies 34.8
2019 Braves 35.63
2018 Dodgers 35.65
2018 Pirates 35.67
2018 Padres 35.88
2018 Athletics 36.01
2017 Athletics 36.33
2017 Braves 36.46
2019 Dodgers 36.89
2018 Braves 36.92
2017 Rays 37.17
2017 Pirates 37.17
2018 Brewers 37.53
2017 Astros 38.65
2018 Reds 39.38
2019 Diamondbacks 39.53
2017 Yankees 39.62
2019 Rangers 40.39
2019 Mets 40.39
2019 Giants 40.44
2017 Cubs 40.74
2018 Marlins 40.77
2017 Diamondbacks 41.05
2019 Phillies 41.07
2017 Reds 41.15
2017 Red Sox 41.77
2017 Giants 41.93
2019 Twins 42.15
2019 Tigers 42.43
2019 Guardians 42.45
2019 Athletics 42.53
2017 Twins 42.61
2019 Angels 43.93
2018 Cubs 43.96
2019 Red Sox 44.01
2019 Mariners 44.16
2017 Mets 44.23
2018 Astros 44.51
2018 Red Sox 44.65
2018 Mets 44.74
2019 Brewers 44.95
2018 Giants 45.37
2019 Blue Jays 45.4
2018 Rangers 45.77
2018 Cardinals 46.57
2017 Dodgers 46.69
2019 Cardinals 46.71
2019 Cubs 46.77
2017 Guardians 47.92
2018 Tigers 48.19
2018 Diamondbacks 48.36
2017 Cardinals 48.65
2018 Twins 48.77
2019 Reds 49.06
2019 Rockies 49.8
2018 Mariners 50.56
2018 Rockies 50.72
2018 Angels 50.78
2018 Guardians 51.81
2018 Royals 51.89
2017 Angels 52.07
2017 Marlins 53.42
2017 Rockies 53.65
2018 Orioles 54.54
2017 Mariners 54.72
2018 Nationals 54.97
2019 Nationals 55.49
2017 Rangers 56.17
2017 Nationals 57.52
2018 Blue Jays 59.32
2017 Blue Jays 60.29
2017 Royals 62.69
2017 Orioles 66.43
2019 Royals 67.55
2017 Tigers 68.88
2019 Astros 70.75

Like I said, Gerrit Cole came a bit too late. While the team was raking in the cash and jumping through hoops to not pay too much luxury tax, they were among the league’s losers in reinvesting revenue into the team. It’s a significant opportunity lost! The trend continued into this offseason too. Prior to the free agent frenzy, reports that the Yankees were already out on Correa and Seager were mind boggling. Yes, they were affected by the pandemic more than any other team. Even so, they’re going to be fine! One season will not make the club bankrupt!

I present the following table not to defend the club’s habits, but more to show you what is in store for this offseason and possibly more if Hal is not content with the revenue stream in the immediate future. Like the previous table, this is in terms of percentages and revenue and payroll are in terms of millions. Also, the revenue data is from Forbes while the payroll data is from Cot’s Baseball Contracts.

2020 Payroll/Revenue

Year Revenue Payroll Team Division payroll_share
Year Revenue Payroll Team Division payroll_share
2020 108 95.3 Yankees AL East 88.24
2020 107 83.4 Mets NL East 77.94
2020 111 75.2 Rangers AL West 67.75
2020 114 76.3 Padres NL West 66.93
2020 126 81.4 Astros AL West 64.6
2020 119 76.2 Nationals NL East 64.03
2020 109 69.3 Cardinals NL Central 63.58
2020 185 98.6 Dodgers NL West 53.3
2020 109 57.3 Rockies NL West 52.57
2020 114 57.7 Reds NL Central 50.61
2020 141 69.9 Angels AL West 49.57
2020 163 80.6 Cubs NL Central 49.45
2020 96 46.3 Marlins NL East 48.23
2020 132 62.9 Braves NL East 47.65
2020 111 52.6 Twins AL Central 47.39
2020 116 54.6 Blue Jays AL East 47.07
2020 140 65.1 Phillies NL East 46.5
2020 151 66.7 Giants NL West 44.17
2020 129 55.2 Mariners AL West 42.79
2020 124 52.6 White Sox AL Central 42.42
2020 152 64.3 Red Sox AL East 42.3
2020 111 44.9 Tigers AL Central 40.45
2020 104 41.5 Brewers NL Central 39.9
2020 109 39.2 Royals AL Central 35.96
2020 104 37.3 Athletics AL West 35.87
2020 118 40.3 Diamondbacks NL West 34.15
2020 117 36.4 Guardians AL Central 31.11
2020 112 29.4 Rays AL East 26.25
2020 116 24.1 Pirates NL Central 20.78
2020 115 23.5 Orioles AL East 20.43

This team was significantly affected by lost revenue relative to the rest of the league in 2020. In previous seasons, the team ended up with hundreds of millions in surplus when comparing revenue and payroll. In 2020, it was in the tens of millions. It’s not a good reason to cry poor, but it is the reason why we should not expect the team to go crazy in free agency this year, next year, or possibly further in the future. I really don’t know how long.

It’s disappointing. This team had such a strong core. The additions of Gerrit Cole and Giancarlo Stanton were incredibly exciting, but there could have been more support. What looked like one of the best rosters in the league should have been separated from the rest of the pack. Technically there is still time in this offseason if the owners ever get their act together, but that’s high hopes in itself. It might take a crazy change of mind for Hal to suddenly be okay with a larger payroll, but crazier things have happened, right?