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Yankees Hot Stove: My Hal Steinbrenner conspiracy theory

September 20, 2010

September 20, 2010 (Photo credit: ladylovespins)

The latest rumor swirling around Yankee Universe is not a potential signing of a big name free agent to fill one of the team’s numerous holes.

It has been reported by the New York Times that media giant News Corp is close to a deal to own a minority share of the YES Network. The price is TBD but the YES Network is valued somewhere in the $4 billion range, of which the Yankees own 34%.

This means more money in the Yankees pockets as even though Goldman Sachs now owns the shares in question, the YES network will profit handsomely from the deal as it will certainly result in cost hikes for the cable companies and viewers.

And if the deal transpires it means more money in the Yankees pockets for years to come.

Just to give you an idea, in 2011 YES made an astonishing $224 million in operating income with $90 million going to the Yankees. So you can only image how much more money the Yankees will earn with News Corp at the helm.

This will make the Steinbrenner family’s global and expanding brand called Yankee Global Enterprises even more valuable. YGE includes the Yankees team, the YES Network, and other conglomerates owned by the Steinbrenner clan.

Essentially this also affords the Yankees the ability to spend money on big name players to improve the team. And technically even if the ball club took a loss the income coming in from YGE is so abundant it wouldn’t even matter; and since YGE is a private entity the profits do not have to be disclosed.

So my question is why is Hal Steinbrenner hell-bent on slashing the Yankees payroll to $189 million by 2014 if it hurts the Yankees winning now? As he is not planning on selling the team, right?

Everyone knows that Hal wants to avoid the steep 50% luxury tax implications that will be imposed if the team spends over $189 million in 2014.

It seems to me that the Hal is trying to pay off any debts the Yankees have occurred through the years, which hints that the Steinbrenner clan might be cleaning up stuff with the hopes to sell the team.

(6 of 52) Rest In Peace George Steinbrenner

(6 of 52) Rest In Peace George Steinbrenner (Photo credit: +Rob+)

So at the expensive of breaking their promise to Yankee fans by not putting the best team on the field might be smart for the Steinbrenner family, but it is bad for the organization. And that is a shame.

As a Yankees fan I always believed in the notion that the Steinbrenner’s’ and the Yankees were synonymous but there are too many things happening that make it seem like this is no longer the case.

1) The moment Torii Hunter signed with the Tigers; Yankees of old would never just watch a nemesis get better especially with the embarrassment they endured in the 2012 ALCS.  They also have a vacancy in RF too, so Hunter would have fit perfectly.

2) CBS Sports reporting that Yankees expect Marino Rivera to take a pay cut is just insulting.

3) Just letting Hiroki Kuroda hear other offers is insane, not going to take a one-year deal because he proved he is worth way more.

4) Russell Martin – see #3. And the fact that presently the team has NO starting catcher.

5) Farm System has been demolished at the top, as the top prospects are not near Major League ready yet. Exception being reliever Mark Montgomery.

Whatever the Yankee brass is up too, as President Randy Levine told Newsday that they do have a plan in place for the off-season, it certainly does not seem to involve signing the best players and putting the best team on the field in 2013-2014. And that is a shame.

Bottom-line is this whole new strategy is not sitting well with Yankees fans and Hal Steinbrenner should be ready for the repercussions. As I want to know if the Yankees will be slashing ticket prices in half too?

“When you’re entrusted with a tradition, you’ve got to protect it.” - George Steinbrenner

If you ran a delicatessen store, you would want to be the best delicatessen store, wouldn’t you? Well, that’s how I feel about the Yankees.”Casey Stengel, on breaking up the Yankees.

 




7 Comments

  1. richard says:

    "So you can only image how much more money the Yankees will earn with News Corp at the helm."

    So they but a minority share and now they are at the helm??? Right

    Is it about $. Of course. Does it have anything to do about selling the yankees and not putting the best team on the field? NO

    A+B+C do not equal E Kate.

    1. You want the Yankees to take all the best players so other teams won't get better? Too naive and simplistic. The Angles were a lock with Pujols in 2012 and what happened to them? And you think 37 y/o Hunter is the answer.

    I would have preferred Melky. We could have a 25 y/o for 8M. Where is the your outrage there?

    Save your ammunition for Feb. Wait until the winter meetings at least.

    • LLP says:

      Melky is now a Blue Jay….and as part of the deal YES extends its rights to broadcast Yankees games through 2042. They will pay $85 million a year for the right to Yankees broadcasts starting next year and that figure increases five percent each year until 2042 when the YES Network will pay out $350 million. That is on top of all the other money from tickets, merchandise, advertisements and selling regular season games to ESPN and FOX.

      News Corp will negotiate on its behalf with the operators as part of a larger package of sports channels so subscribers will be charged more to get the YES channel which is more $$ in the Yankees pockets.

      Hal is trying to reduce the debt on the team, as most pro-teams have debt including the Yankees, by using the money that the team would normally use to pay it off. But all the profits from YES and every thing else is sparate under and entity called Yankees Global Enterprise.

      Hal seems to be cleaning up the books and companies tend to do this before they put themselves up for sale. Steinbrenner family can sell the Yankees and still own shares in YES but part of the deal is that in 3-years their 34% drops to 25% with another 9% going to NewsCorp. The Yankee team doesn't generate a dime compared to the profits YGE brings in so selling the team takes the baseball part out of it while they can still reap the benefits from YGE. YGE's profits do not have to be reported to MLB so the numbers are not even known but we are talking in the billions.

      So, this whole 2014 plan is very selfish as the Yankees are a team that needs to retool to win, as they do not have what it takes to rebuild from the bottom. That is the way it is and always has been so why change that if you ate not selling the team anytime soon?

      Are they slashing ticket prices in half??? Because NYers are are not going to pay to see a non-contending team on the field especially when the owners had the resources to make the team a contender.

      The Boss is rolling in his grave…that I can promise you.

    • LLP says:

      QUOTE FROM RIVER AVE. BLUES…."The Yankees will receive $420M from News Corp. to keep the team on YES through 2042. They’re getting half of that now and the other half in three years. Just think, they’re trimming payroll in less than 16 months."

      "As others have noted, the $420M is a “gift” above and beyond all other fees. The Yankees just scored about $700M between the $420M fee and the reported $270M from selling a portion of their YES ownership to Newscorp. All done before the end of the year in anticipation of perhaps increased taxes in 2013. So $700M. "

  2. Joe D says:

    It’s bad enough having to see the FOX Business promos but to have Rupert Murdoch get his hands on the Yankees is too f***ing much for me. What’s next? Hannity in the booth? I’m sickened at the prospect.

  3. Carlos says:

    Ridiculous. Look at how the Giants have won. I for one would not mind the Yankees showing fiancial restraint. Let Cashman get creative.

    How about trading Granderson for strong prospects and taking them with Nova, a couple draft picks and other minor leaguers for Mike Stanton? Or something other than adding older short term players…. I think Cano is the only hold over from all those free form2014

  4. It used to be the teams owned the players . . . now the players are dictating the terms. The team "family" is no longer and now constant separations, divorces and sell-outs.
    Sports now means winning at all costs.
    I'm a Rockaholic and a RockNRollDude. My band is everything. Can I be bought out? Make me an offer.
    Peace + Love!
    Rock N Roll Dude