Yankees' 2024 revenue vs 2025 payroll figures show how much they abuse profit

New York Yankees fans have become accustomed to budgets the last few years. Who can forget Hal Steinbrenner's comments about payroll being at "unsustainable levels" back in 2024? Or how about how the organization became paralyzed by Marcus Stroman's contract last winter and forgot that baseball teams actually need a starting third baseman?

Then there was Steinbrenner's bellyaching over the Dodgers' big spending ways. All of this to have fans believe that the Yankees haven't been as flush as other clubs as they watched the Dodgers and Mets blow past the last luxury tax threshold while the Yankees stared the line down as if it were some kind of invisible and impenetrable force field.

But are things really as tight as the brass would have you believe? Not in the slightest, and it should make you mad.

The Yankees payroll to profits equation shows where their priorities are

In a comparison between 2024 revenues and 2025 payrolls (plus luxury tax obligations, if applicable), it becomes clear that the Yankees' self-imposed budget isn't about fiscal responsibility, but rather maximizing profits.

Unsurprisingly, the Mets and the Dodgers come in at the first and second spots, respectively, in terms of payroll-to-revenue ratio. Where are the Yankees? Third? Nope, that belongs to the Toronto Blue Jays, of all teams. No, all the way down, outside of the top 10, you'll find the New York Yankees at No. 11, one spot behind the Baltimore Orioles. The Yankees are unbelievably third in their own division, let alone the entire league.

A closer look shows that only the Dodgers pulled in more revenue than the Yankees at $752 million versus $728 million. Despite that, Los Angeles spent $549 million on payroll and tax penalties combined, or 73% of their revenue. The Yankees pale in comparison with just $362 million, which represents just 49.7% of their 2024 revenue. Little brother over in Queens, of course, blows everyone out of the water at 90% of revenue going towards payroll costs. We understand the ins and outs of the business aren't as easy as some might make them seem, and no business model would recommend the Mets reinvesting 90% of the their revenue back into their payroll ... but something's gotta give here.

Two other notes: the small-market Kansas City Royals (No. 9) outranking the Yankees is something that should never happen. Getting passed by the Los Angeles Angels (No. 8), a club belonging to one of the most dysfunctional owners in sports in Arte Moreno, is appalling as well.

Obviously, baseball is a business, but for a team that is so concerned with the bottom line, they sure do make a lot of bad financial decisions. The Stroman contract is one example. So too are the tens of millions of dollars the club has forked over to Josh Donaldson and Aaron Hicks not to play for them. DJ LeMahieu's dead money will be on the 2026 books.

Then there's all the deadweight they'll be carrying in arbitration salaries for players who will be non-factors in 2026. Not quite so efficient.

Of course, the Yankees spend a ton of money. That's not the point. They make gobs more of it, and they don't invest near the same percentage of their revenue in the on-field product as many of their big market peers.

They're also simply bad at being efficient in their quest to fatten the bottom line. In extending deals for free agents and extensions past the point of expiration, they lower the average annual value, and therefore, the luxury tax hit. That effort to save a buck today costs them many times over tomorrow, as we see with the examples provided above.

The same is true for their preference for acquiring controllable assets in trades. When the value of those players goes belly up, the Yankees are left holding the bag.

Steinbrenner might be right that you don't need a $300 million payroll to compete, but not if you can't be efficient with your resources. However, he can clearly afford a payroll well above that $300 million threshold, and to a certain extent, owes it to the fans who pay exorbitant prices to support the team year in and year out, only to be told there's no more money to fix obvious holes on the roster ... only to see numbers like this at season's end.

If you weren't mad about the Yankees' spending habits before, you sure as heck should be now.