Prediction: the New York Yankees will soon be a very profitable business.

Brian CashmanOver the last four seasons, according to Forbes, the Yankees have lost $26 million, $37 million, $50 million, and $25 million, respectively. Those were the worst operating margins in the sport in every year but 2003 (behind only A-Rod’s Rangers), and they were the only team to be in the red in 2006.

Now remember, we have to take these numbers with a whole chunk of salt. Almost every franchise has one subsidiary or another in which they can conveniently hide revenues for tax purposes. The Yankees have one of the better shelters around, in the YES Network. […]

I’m pretty fascinated by issues that have no real significance, and yet still generate a great deal of interest. Does it matter if Lindsay Lohan goes to rehab? Or if Paris Hilton and Britney Spears are no longer friends? It matters to them, I guess, but logically it shouldn’t matter to anybody else. These are media-driven fascinations. People like to read about drama, particularly when it’s not their own. Far more people will be interested if Brad Pitt and Angelina Jolie broke up than if they had another baby.

Baseball’s steroids issue is in this class of news. It is a media-driven story, only interesting because people love train wrecks. In reality, steroids have had no discernible effect on baseball’s business, nor will they. […]

I don’t like writing about ethics. It’s a gray area, without many defined parameters, and that doesn’t suit my numbers-oriented brain.

But if you understand the history of baseball, and particularly that of the relations between teams and players, it is difficult not to take the players’ side on most issues. As Jim Bouton once said, “For a hundred years the owners screwed the players. For 25 years the players have screwed the owners - they’ve got 75 years to go.”

Major League Baseball teams are businesses, and act accordingly. While they have not always been well run businesses, they are, in fact, profit-seeking companies, and shouldn’t be treated any differently. […]

Barry Bonds will be the best value free agent signing of this winter.Barry Bonds

This is a player with a lot to offer, particularly as a DH. He put up a higher EqA this year (.361 adjusted for all-time) as a 42-year-old with bad knees than Alex Rodriguez ever has. He led the majors in walks and on-base percentage, hit a home run every twelve at-bats, and put up the highest slugging percentage by anyone his age in the history of baseball.

And while the media still loves to talk about him, the mainstream press as a whole doesn’t seem to appreciate how much he has left. While most of the focus is on the so-called risks of bringing him in, signing Bonds could actually be the most risk-averse move a team could make this offseason. […]

I wrote this yesterday:

Chris Antonetti is perfect for the St. Louis Cardinals, and vice versa. If the world makes sense, they will dominate the National League Central for the foreseeable future.

Turns out Antonetti and the Cardinals weren’t as close to a deal as we all thought.

Maybe we shouldn’t assume anything about Antonetti. Logically, he should become a great general manager somewhere. And I’m not sure there’s a better spot than St. Louis, outside of New York and Boston.


A lot going on, so how about some bulletpoints:

A-Rod- So A-Rod has officially opted out. Shocking.

In one sense, though, I was a bit surprised. No, not that game four of the World Series became all about Scott Boras. That’s not that strange. What is strange is that A-Rod didn’t give the Yankees the full time window to get a deal done. I’ve said it before: the most logical place for Alex Rodriguez to play is the Bronx, at least based on some simple economic theory. The Yankees have the most cash to spend, and the most potential revenue coming back. It makes almost too much sense for the highest paid (and perhaps best) player in the league to work in that environment. […]

Scott BrosiusI’m very ambivalent about the modern postseason. Having an eight-team, three round playoff has two primary effects from a business perspective. On one hand, it generates tons of cash, both by increasing the supply of a highly demanded product and by keeping more teams (and therefore fans) involved in pennant races longer into the season. From a financial perspective, realignment and the addition of the wild card have been tremendous successes.

On the other hand, this format goes a long way toward killing the significance of the “World Championship.” The goal in sports is to be the best. In an eight-team baseball playoff, the best team rarely comes out on top. This significantly changes the task at hand for baseball operations departments. Whereas teams were once incentivized to try to be the best in their league, it now makes more sense to be in the upper middle class and hope for the best. […]

Ladies and gentlemen, we may not have seen anything yet.Bud Selig

The Milwaukee Journal Sentinel reported today that baseball’s revenues will top $6 billion for the first time this year. We also learned that the sport brought in about $5.4 billion in 2006 (about $300 million more than Forbes’s estimate), which means that the industry saw eleven percent growth this season.

A month ago, we concluded that baseball’s player market is not in the midst of another bubble, pointing to a couple very simple facts: revenues have grown faster than salaries every year since 2002, and the percentage of revenues allocated to salaries has been much lower than it was from 2001 to 2003. […]

Lots of Scott Boras talk lately (not just on our site), both in the mainstream and around the blogosphere. The New Yorker has a huge profile this week, and the Atlanta Journal-Constitution also ran a story about him today. J.C. Bradbury at Sabernomics had this to say:

I’d love to do a study on this, but data on who represents whom in sports is too annoying for me to aggregate. But, after thinking about this, I suspect that Boras gets so much flack simply because he represents the top players in the game. Of course, his clients are going to get big salaries. His negotiation tactics are often reported to be shrewd, but what negotiation isn’t contentious? When I read about negotiations involving other agents, teams are often bitter with the other side. […]

I understand why this is being treated as such a big story. The manager position has been very highly thought of since the start of time, and this particular manager is one of the most respected men in the industry (and not just for winning four World Series titles).Joe Torre

That being said, let’s look at this from an objective point of view. The field manager used to run the entire show, not only filling out the lineup cards, but also acquiring the talent and possibly even playing. But those days are long over. The position is now, more or less, that of a middle manager, bridging the gap between the top level executives and the company’s talent roster. […]