The Yankees and Opportunity Cost

12 Nov

by Dave Cameron – November 11, 2011


During a discussion with reporters on Wednesday, Brian Cashman talked about the budget that he was operating under. Or perhaps more specifically, the lack of a fixed budget.

“There’s always the target area (for the payroll),” Cashman said. “But obviously we’ve always been in the position thankfully that depending on what becomes available, how it looks, what our current circumstances are, if we’re
quote unquote in trouble, we have an ownership that’s receptive to having conversations obviously regarding that. I’ll give you an example.

“Like last year, Russell Martin became available so we stretched to make that work. There wasn’t an intention there. But that was something that he allowed me to do a little bit more on because … we weren’t expecting that. We were going to go with the young catchers. But when he became non-tendered, and if we could get a deal at a
certain amount, it took a lot of conversations with Hal Steinbrenner. He allowed that to happen and it was a real big benefit for us and we appreciate that.

“So you have those give and takes that take place. Sometimes it’s no, and sometimes it’s yes, but obviously the flexibility, as you already know, there’s no set number where you can’t exceed it that obviously exists in other

Not that this is any real surprise, but the Yankees don’t have a payroll limit, they have a “target area”. Ownership probably wouldn’t go for a $300 million payroll, but as long as Cashman can make a compelling case that there’s
value to be had in spending a bit more money, he has the ability to dip into an essentially unlimited pool of resources.


The following is the excerpts from what Dave Cameron wrote:


  • For the Yankees, the cost of a player isn’t irrelevant, but it’s certainly marginalized because getting Player X has little to no effect on their ability to also get Player Y. This reality essentially puts them on a different playing field than the other 29 teams, and some would argue that it tilts the competitive balance scales too far in their direction.


  • At some point, Major League Baseball will probably have to do something about this. The league doesn’t need a blunt tool like a salary cap – which is good, because the player’s association would never go for one anyway – but instead could benefit from a more precise limiting tool that would serve only to bring the Yankees back in line with the decision making processes that the rest of the league has to face.


  • When one organization can simply put aside cost as a significant factor in their evaluation of whether or not they should acquire a player, they’re simply not bound by the same factors as the other franchises. The Yankees should be congratulated for creating an empire that produces the kinds of revenues that allow them to make those decisions, but I’d argue that it’s not clear that they should continue to be allowed to operate in such a manner.


My reply:

November 12, 2011 at 12:29 am

The Yankees organization has the money and can operate differently from the other 29 organizations. It is simply their edge. There is no big deal about it. Considering if the other organizations had the same resource like Yankees have had, I bet they would do the same as what Yankees have done. To get to the bottom line, Yankees’ ultimate goal is to win the World Series championship each year but you know they didn’t this year, nor did they last year, even though money is never a constraint to them. It’s simply how it works in MLB.



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