Yankees: 4 things the Bombers can learn from small-market teams

Despite spending a substantial amount of money on players’ salaries over the years, the Yankees have not reached the World Series since 2009, and they may not make the playoffs this year despite spending just over $200 million on player salaries.

Let’s hope they do.

However, some savvy smaller-market teams have spent much less money on acquiring talented players than the Bronx Bombers and have played better than the men in pinstripes in recent history. Maybe the Yanks can learn something from them?

The Yankees’ struggles of late, not surprisingly, have led to a greater focus on how much money they spend and how they spend their funds.

For instance, YGY’s Thomas Carannante writes that the Bombers can and should spend more money this year on player acquisitions if they hope to make it to the playoffs in 2021. He argues that the club’s supposed payroll restrictions are arbitrary, do not reflect their significant financial resources, and likely reflect a desire by management to contain costs and increase profits. The fans’ strong desire to see more success on the ball field, as a consequence, is being pushed aside.

The data bears this out. In March 2021, Forbes reported that the Yankees remain MLB’s most valuable team for the 23rd consecutive year with a valuation of $5.25 billion. Sportico, a professional sports business publication, valued the 2021 club even higher at $6.75 billion.

The organization’s multiple and lucrative revenue streams are enormous and dwarf the amounts taken in by other MLB clubs. As a result, the Bombers have a lot of money. However, they are not spending the dollars proportionate to their total income, wealth, and value.

From a different yet related perspective, the Washington Post’s Neil Greenberg analyzed recently how the Yanks have made serious mistakes in the way they have allocated their money on players over the years.

In particular, since 2011, instead of identifying and pursuing up-and-coming talent, the club has consistently apportioned an enormous amount on veteran player salaries, many of whom are past their prime. The bottom line is that the boys from the Bronx have not been getting a bang for their buck.

Greenberg argues that the Yanks need to critically rethink how they target their funds and the amount of money they spend on free agents. In addition, the Yankees organization should reconsider its strategy of primarily acquiring older players and viewing young players from their farm system as occasional fill-ins. The overall quality of the club’s players in the minor leagues is currently mixed, with few bonafide stars ready to be promoted to the majors.

A great starting point to begin formulating a more fruitful payroll allocation plan is to look closely at how successful small-market teams acquire and develop excellent players for a modest cost.

Since these teams have significantly limited financial resources, they have much less of a margin for error in deciding whom to add to the team if they hope to be successful. As a result, these teams tend to contribute a higher percentage of their funds to developing young players and a much smaller portion of their budget to acquiring veteran players with high salary, multi-year contracts.

Among the clubs in small markets, the Tampa Bay Rays and the Oakland Athletics are two examples of teams with limited budgets that have done an excellent job on player selection and development over time. As a result, both clubs have won a high percentage of their games during the regular season, and they have frequently made it to the playoffs. The Milwaukee Brewers also have been able to acquire and cultivate talented players at a modest cost.

These three innovative and successful teams have formulated and implemented an astute player evaluation and development system and business model to construct their rosters.

Don’t get me wrong. I am not arguing that the Yanks should spend less money. In fact, I strongly agree that they have the financial resources to spend significantly more money than they have been allotting. The economic data support this position. It is how the organization has been spending its money that I have issues with.

Along with spending more money, there are four strategies that the Yanks should pursue that will permit them to get more bang for their buck.