Bonn1997 wrote:I'm not making any assumptions.

You're assuming you understand the fundamentals of the Yankees finances.

If they're not running things as effectively as 1 to 2 decades ago

The year 2000, in which they won 87 games, was 19 years ago. How nostalgic are you for 2005-2008?

$39/30 is still a phenomenal return on investment, FWIW. Very few investments return 30% in a year. Most businessmen would be thrilled with a third of that return.

You don't understand. I didn't invert the numbers.

You suggested spending $20m to generate an additional $30m ($20m/$30m). Pays for itself plus. With a $280m payroll, you'd be spending $39 (paying the player $20m + $19m to the league in LT) to generate an additional $30. That's a net loss.

The concept of putting aside sunk costs is simple but psychologically it is hard to abide by (or even keep in awareness).

That's literally something you just utterly made up. You or I have NO idea whatsoever how the concept of sunk cost plays with the Yankees management.

None. That it is psychologically hard for them to abide by it you just made up out of thin air.

Bonn1997 wrote:I'm concerned they'd rather just put together a highly profitably .570 team that doesn't cost that much and is no risk to them than take a gamble and go all in.

Immediately following a season in which they acquired Stanton and had a winning % of .617.

Again, we're pulling things like ".570" out of nowhere.

With normal investments that's fine. I'm happy if my investments return 7% a year - I don't need world series winning investments. I'm risk averse. I'm not sure they're interested in putting together a VERY strong world series contender vs. just a nice team that ordinary New Yorkers will spend a fortune on. We'll find out soon. If it's clear they're actually willing to take some risks to put together a meaningfully improved team, I will cut them a lot of slack.

See, to me this demonstrate that lack of a center to this argument.

Just a couple of posts ago the argument was the Yankees are leaving free money on the table by not escalating payroll... NOW escalating payroll is a risk?

Which is it? It seems like the only constant is the Yankees are doing something wrong, even if what the wrong thing is needs to change from post to post.

And a 100 win team is always a very strong World Series contender. The same team was one game from it just a year ago. They already are a very serious world series contender.

And the ironic part is, one of the reasons they are and project to continue to be for the foreseeable future was BECAUSE, not despite, them realizing what fans are slow to...

https://fivethirtyeight.com/features/nobody-wants-baseballs-30-something-free-agents-anymore-%F0%9F%98%9E/?src=obsidebar=sb_1

I've heard this all before, when fans were so dissatisfied with Cash's loyalty to his dumper-dive pet project Aaron Hicks... when a team with legitimate title hopes couldn't go into the season with two rookies in the infield.

The fact is, Judge didn't come on the scene like Sanchez did. The New York Yankees of a decade ago would never have made the room on the 25 man and in the line-up for Judge AND Sanchez AND Hicks AND Torres AND Andujar. They probably would have went out and got Tulowinski rather than Gregorius.

Severino might have gone in a package for Price or Quintana.

What you call risk-adverse I call ahead of the curve.

The Yankees fans who continually call for spending get to watch arguably the best young team in baseball despite themselves. Because they wouldn't and didn't endorse the moves that weren't made that got them to this place.

It seems like the only constant is the Yankees are doing something wrong

You suggested spending $20m to generate an additional $30m ($20m/$30m). Pays for itself plus. With a $280m payroll, you'd be spending $39 (paying the player $20m + $19m to the league in LT) to generate an additional $30. That's a net loss.

That's literally something you just utterly made up. You or I have NO idea whatsoever how the concept of sunk cost plays with the Yankees management.

None. That it is psychologically hard for them to abide by it you just made up out of thin air.

Bonn1997 wrote:I haven't criticized the Yankees in a long-time. The only thing I'm now criticizing is the publicly stated plan for the off-season.

Which again, is what I'm responding too, specifically.

There is no confusion here.

Bonn1997 wrote:You're still taking the $20 mil example too literally. The only points were that a rational decision-maker won't stop future investments with good odds just because a past one didn't pay off. And hence, if the Yankees are rational, there will be no long-term loss to the fans if there's a bad A-Rod like signing - the owners would eat the cost but should not shy away from future investments. The exact numbers were irrelevant other than the investment is bringing in more than what's spent and more than other options. That is true if we're signing someone for 10 cents and he brings in 20 cents or $10 trillion and he brings in $20 trillion.
To make this concrete, let's take a worst possible-case and say we sign Bryce Harper to a mega deal, has a devastating injury early, can't play first, etc, and has a -5.0 WAR his first year. Here is what would/should happen:
A) There IS a short-term cost (-5.0 WAR for a year).
B) For a while, we go back to playing Greg Bird, who would have been there anyway. So there is no long-term net loss.
C) We sign someone else without any hesitation - The Harper sunk cost is done. We make attempt #2 to get a very good option at first base.
D) The owners make less money (hence THEIR concern) but since point C should logically still happen, it is not my concern.
E) I'll add that ticket prices should not go up to cover the Harper cost either. It is more convincing to me that prices are demand-driven rather than cost-driven.

So if the Yankees are rational, the upside to a FAN would significantly outweigh the downside of pursuing someone like Bryce Harper.

When do we consider that they know what they're doing. The really, really good team that they fielded sooner than most people thought just 2 years ago being actual, citable evidence of that?

I'd say we have to give that VERY serious consideration. I'm not responding to what they've done over the past 2 years. I actually am shocked that my initial post about their stated post-season plan generated more than a sentence or two in replies. I thought one or two people might just say something like, "Yeah, they've done well so far. I also hope they don't become a cheaper organization."

If memory serves I responded to a post that implied causation between the Red Sox having the highest payroll and winning the world series. I merely responded with context to that premise.

Yes, I could have just responded with one sentence saying 9 of the last 10 World Series did not, but I went in a different direction to illustrate a point. After that, you and I have been voluntary participants in where the conversation went from there.

And my point isn't/wasn't to comment on whether they become a cheaper organization, my point has to remind us all none of us have any clue as to their finances.

Circling back.

Bonn1997 wrote:You're still taking the $20 mil example too literally. The only points were that a rational decision-maker won't stop future investments with good odds just because a past one didn't pay off. And hence, if the Yankees are rational, there will be no long-term loss to the fans if there's a bad A-Rod like signing - the owners would eat the cost but should not shy away from future investments. The exact numbers were irrelevant other than the investment is bringing in more than what's spent and more than other options. That is true if we're signing someone for 10 cents and he brings in 20 cents or $10 trillion and he brings in $20 trillion.

It isn't true, however, if he brings in $30m (which is a made up figure as is), but costs $39m. It is neither a fact and likely not a fact that any FA expense will net a positive return, particularly in the luxury tax environment.

That isn't taking the example too literally. I'm not disputing spending -X to make +Y where +Y is the higher figure by rule is logical and independent of the amount, I'm arguing the logic that a positive ROI will ALWAYS result, which is what you're arguing.

B) For a while, we go back to playing Greg Bird, who would have been there anyway. So there is no long-term net loss.

Well, for one, Greg Bird probably isn't #1 on the depth chart anymore. It is almost certainly Luke Voit, with Bird as the #2.

It also assumes Greg Bird WILL have negative WAR, which is not at all a fact.

So I can only call into question a chain of logic when its 2nd link both overlooks a fact and assumes another.

Yankees options at 1B right now (assuming no significant addition like Machado eventually making Andujar another 1b option) includes one or both of 2 players being productive. It does not solely depend on a guy who had an awful year bouncing back, which we also shouldn't dismiss out of hand.

C) We sign someone else without any hesitation - The Harper sunk cost is done. We make attempt #2 to get a very good option at first base.

Another factual error, or at least incomplete link in the chain. Unless Harper signed a one-year deal, both his salary and 25/40 man roster spot will be an ongoing concern for years.

This also seems to assume Harper gets hurt driving down to Tampa. I'm not sure assuming a worthwhile candidate will exist to be signed in later March or April is sound.

D) The owners make less money (hence THEIR concern) but since point C should logically still happen, it is not my concern.

And this is where we get into jdrodmc territory. You are a fan of a commercial enterprise, not a non-profit or public trust.

Period.

Whether you choose to ignore that fact and rationalize it isn't your concern is just something fans tell themselves. It doesn't reflect the reality of the circumstances.

The Yankees exist to turn a profit: Fact

The Yankees cannot make a profit at any level of expense: Fact

We as fans don't know what that level is: Fact.

If you simply accept these facts, and choose not to ignore them, payroll and luxury tax implications are your concern, same way they are for the Knicks or whatever NFL team you may or may not like and the roster choices they make.

And trust me, I know the response to this.

Luxury tax isn't a hard cap and therefore the Yankees should just ignore luxury tax AND their operating expenses, or at least ignore them to some unspecific higher level I as a fan assume they haven't reached yet.

E) I'll add that ticket prices should not go up to cover the Harper cost either. It is more convincing to me that prices are demand-driven rather than cost-driven.

What?

Yankees played to 86.6% paid capacity last season. If you follow Yankees attendance trends (which is not fickle and rises and falls over multiple seasons), there is a good chance they'll play to over 90% this season.

A market is a market. If a Harper signing had some exclusive effect of increasing demand to sell some or all of that last 10%, logic dictates that same effect would push the market so that fans who already regularly attend games like through season ticket plans would pay more.

You can't cite the positive market effects of a free agent signing as some sort of logical risk the Yankees should take but them ALSO argue they should artificially hold down prices ignoring the market effect that IS your premise.

Again, they're a commercial enterprise. You are a fan of a commercial enterprise and have been arguing all along they should act MORE like a commercial enterprise...

...but only until they should act like a public trust.

So if the Yankees are rational, the upside to a FAN would significantly outweigh the downside of pursuing someone like Bryce Harper.

Yup, in the very specific scenario that defies its own logic.

Bonn1997 wrote:Hmmm. I think at this point all our disagreements stem from you making false assumptions about my views. I never said an FA was guaranteed to make money,

The mistake I always seem to make is considering a person's views as a whole and not in separate chunks. You spoke about the Yankees traditional goal being to put together a roster "undoubtedly superior" to their opponents, which I don't think is really possible but it seems to be your opinion as to what you think the Yankees should be doing.

Your method as it pertains to this year is spending, and you argued there is no benefit to fans to not spend on the top FA. I responded if they suck, which is often the case, there in fact is a benefit.

What really seems to be at the heart of it is .... "If signing another player to a $20 mil per year contract will bring in $30 mil in revenue, you have to do it whether you've already spent $80 or $280 mil on the rest of the roster. "

I seemingly didn't realize this was just a general statement of logic, and not specific to the Yankees and your position on their spending.

Yes, IF spending $20 nets $30, you do it. No argument. I didn't think we are arguing what there could be no argument against.

I THOUGHT (in error it seems) you were applying that to the Yankees, saying a FA investment would yield a positive return independent of their existing payroll considerations.

I thought we were discussing whether the Yankees spending $20m would have that effect. I was merely suggesting it might not.

Bird was guaranteed to have a negative war

If Bird remained, and had a good year, that changes the math considerably. The Harper ROI is less in a circumstance in which he doens't get injured but Bird could provide 2/3rds of the WAR at 1/30th of the cost.

To say there is nothing lost because Bird is still there overlooks the potential overpay on WAR to begin with.

I’m not sure if you’ve read demand vs cost methods of pricing. Your comment about tickets makes it sound like you didn’t understand the claim.

That former is inaccurate, the latter is entirely possible.

What didn't I understand?

Bonn1997 wrote:The demand argument is that demand determines prices ultimately not producer/owner cost. For example, whether it costs you $1 or $6 to make a pizza pie, if there is enough demand to sell it for $10 but not $11, you will charge $10. Production cost (for pizza or putting together a roster) doesn't determine price including of baseball seats. I haven't read all the economics research but the theory behind the demand argument seems more logical.

No argument.

So my question, if the Yankees spend $20m, as per the original example, where is the $30m in additional, new revenue coming from?

I was not saying the Yankees spending an additional $20m in cost would effect demand. I was assuming (and now asking) if YOU were ... what market force is generating new revenue in greater number than the expenditure? Or did I misunderstand spending $20 will generate $30?

Bonn1997 wrote:I should have just said something like, if you spend $ A and the investment brings in $ B, it is worthwhile so long as B is significantly > A and regardless of sunk costs. It isn't a complicated idea - I wasn't pretending to be onto something earth shattering. The only point was that sunk investments don't affect profitability of future investments.

I believe you should have wrote something like that. I would of responded "of course".

I might have asked what the relevance of that is, however. Because the question isn't 'is a positive return good?' (of course it is), the question is 'how likely is x to net a positive Y return?' (the answer is you and I don't and will never know).

Where is the additional revenue coming from? Either it will come from the same place as it did in the 90s and 2000s when we had the highest payroll regularly, or something is worse now financially for the Yankees. I don't know why you keep thinking I'm saying spending is guaranteed to bring in money. Nothing in life is guaranteed.

Then I'd question the relevance of the 90s and 2000s? I don't think it is solid footing to assume all the factors in the equation are a constant and only payroll is the variable, which in the marco-sense is the whole point. Your question of 'is something worse' may be worth consideration.

The thumbnail complaint/question is "why don't the Yankees spend like the used to?" The answer may be more complicated than Hal's whim. It might be because other things aren't what they used to be.

It might not be apples to apples.

My wonder though is how risk averse are the Yankees. Do they need to feel a big deal must have near a 100% chance of paying off in order to do it? Are they more risk averse and more willing to be just a top 5 to 10 team than 1 to 2 decades ago? Or are all the statements about not spending just bluffing? Or are their finances worse now than 1 to 2 decades ago? I intended for all the comments here to be "discussing-raising" rather than offering conclusions. We'll know much more in a few months.

Not really. Some of us will take what little we know - are they over $206m or not and if not by how much - and extrapolate rash assumptions from that. We'll be on completely shaky ground, but we'll do it anyway.

I think all my use of numbers dragged the conversation into misunderstandings. The italics is really what I was hoping other fans would be wondering too and interested in discussing.

Fair enough. I'd reiterate as little as we'll actually know about all these things, broadly the Stanton acquisition does shed as much insight into the first questions as we're going to get. They took on a big number with a LOT of years. That happened. Seems to be a partial answer.

Interestingly, my attempts to recognize this team is really good at playing baseball and having a discussion about that has been met with some ridicule and mostly overlooking that in favor of the frame of mind of the controlling partner.

I like pitching and catching and hitting and fielding and running and the Yankees are pretty good at those things. But the offseason preoccupation seems to be the owner's psychological profile.

When i was a kid I became a fan of a baseball team, not an idea that they had to own Boardwalk and Park Place every game.

Maybe I was a weird kind.

Bonn1997 wrote:

Not really. Some of us will take what little we know - are they over $206m or not and if not by how much - and extrapolate rash assumptions from that. We'll be on completely shaky ground, but we'll do it anyway.

I wouldn't use $206m as a firm cutoff. However, I do think they're on shaky ground if the goal is to spend much less than Boston and just stretch it further. If the goal is just to field a generally good team and win a world series every 10 or 15 years, they can probably pull that off. I don't think most Yankees' fans would be content with that though.

They haven't won one in 10 years and 9 before that and attendance and ratings are going up.

I think a lot of Yankees fans underestimate how many Yankees fans are fans of baseball and not a self-image mostly established in the 1980s.

That said, I'm not sure I understand the Boston litmus test, as if the Yankees goal as an operation is to spend more than Boston.

And I'm not sure we even know how much Boston is really prepared to spend on a regular basis.

That team didn't pay tax in 2017. I think we're on safe ground to assume that was on purpose.

The team gets out from under Hanley ramirez's contract this season, are just a year away from reclaiming $30m they have to pay Sandoval and Castillo. What their spending threshold will be ongoing remains to be seen.

We already know the Yankees haven't been prepared to match or exceed the Dodgers the last several years, which has gotten the Dodgers a lot of pretty good and they appear to be rethinking.

So maybe in the big picture we already know the answer. The Yankees certainly are not concerning themselves with having the largest payroll in baseball. Maybe its time to act on that knowledge rather than give it another year?

Bonn1997 wrote:

Knickoftime wrote:

Bonn1997 wrote:

Not really. Some of us will take what little we know - are they over $206m or not and if not by how much - and extrapolate rash assumptions from that. We'll be on completely shaky ground, but we'll do it anyway.

I wouldn't use $206m as a firm cutoff. However, I do think they're on shaky ground if the goal is to spend much less than Boston and just stretch it further. If the goal is just to field a generally good team and win a world series every 10 or 15 years, they can probably pull that off. I don't think most Yankees' fans would be content with that though.

They haven't won one in 10 years and 9 before that and attendance and ratings are going up.

I think a lot of Yankees fans underestimate how many Yankees fans are fans of baseball and not a self-image mostly established in the 1980s.

That said, I'm not sure I understand the Boston litmus test, as if the Yankees goal as an operation is to spend more than Boston.

And I'm not sure we even know how much Boston is really prepared to spend on a regular basis.

That team didn't pay tax in 2017. I think we're on safe ground to assume that was on purpose.

The team gets out from under Hanley ramirez's contract this season, are just a year away from reclaiming $30m they have to pay Sandoval and Castillo. What their spending threshold will be ongoing remains to be seen.

We already know the Yankees haven't been prepared to match or exceed the Dodgers the last several years, which has gotten the Dodgers a lot of pretty good and they appear to be rethinking.

So maybe in the big picture we already know the answer. The Yankees certainly are not concerning themselves with having the largest payroll in baseball. Maybe its time to act on that knowledge rather than give it another year?

You're not sure why a Yankees fan would be concerned about Boston?! If we spend much less than they do and want to be better than them, that means we have to stretch every dollar further than they do (even though they are already a smart organization). That seems straightforward.

I'm not sure why a seasoned, reasonable baseball fan would be that preoccupied with something that has happened exactly once.

And I don't think the NY Yankees as an organization should essentially put Boston in control and dedicate themselves to being reactive to Boston's spending and moves. I'm certainly and admittedly not as interested in the perpetual game of Spy Vs. Spy as other Yankees fans seem to be.

The Houston Astros have built a terrific baseball team without using another team as their one-up measuring stick. I've greatly enjoyed the Yankees building a baseball team from the ground up these last few years as opposed to trying to match or top another.