FANalytics Baseball Blog

Well a poster left a comment on my If I were the Yankee GM moves, claiming

how hard is it really to be the Yanks GM? If anyone had the money to get Burnett and CC and Tex and Cameron, they’d do it. It doesn’t take a rocket scientist to sign high value free agents if you have the money.

And he certainly has a point (forgetting the arguments about team dynamic and locking yourslef into unmovable deals and a bunch of DHs).  That if you have a bottomless pitt, why not just sign all the best players available and call it a day.
I think the problem is that even the Yankees seem to have a payroll cap, and it seems to be around 200mil or so.
The latest info I can find on Yankee revenue was from an April 16th Forbes special report on the business of baseball.  The report listed the Yankees at revenues from 2007 of $327 million dollars, ahead of the Redsox who come in second at $263 million.  The Yankees have apparently paid about $24 million to luxury tax, and I believe with revenue sharing, they have actually given about a total of $100 million to MLB to distribute to smaller market teams.  So that put there net revenue at around $227 million.  Their actual payroll came in just under $220 million, so they are pretty close to there limit.
Now of course there is some nice book cooking because these revenues do not include YES network revenue, which is technically a separate company.. The Redsox and other teams have this same deal.

But based on actual Yankee revenues, they basically made a 7 million dollar profit.
Given some of the public statements, including Buster Olney claiming the following on his blog:

Heard this: The Yankees’ payroll in 2009 likely will fall in the range of $180 million, a significant cut — which won’t be hard for the team to accomplish, because some $75 million in veterans are coming off the books.

So while the Yankees will still have an extremely high payroll, it does sound as though there is some goal to keep payroll below a certain amount.  And that means, that while they can certainly spend, they need to pick and choose which player(s) they are going to commit the money to.
One area I haven’t pointed out, is that the Yankees are moving into a new stadium, and with that comes an exemption from luxury taxes, among other things, so Yankee revenues are expected to move upwards to maybe even as high as $600 million.
If that is the case, there does not seem to be any realistic ceiling