Much ink has been spilled in remembrance of George Steinbrenner and I have little to add to the discussion of his life or personality. He never sounded like someone I'd want to know or work for, and it always seemed to me that his episodic acts of generosity were a kind of green-washing of his reputation, image and life's work.
Of course, I've never been a Yankee fan. Anyone who is ought to hold The Boss in some esteem, since he spent and willed his franchise to unequaled success during a 35-year tenure at the helm of the team.
Well, tangentially, that's not quite accurate. Steinbrenner's impetuousness and immaturity plunged the franchise into a dark hole from the mid-80s to the mid-90s. Only when he acquiesced to the urgent and incessant pleas of the team's professional staff to unclench his grubby paws from the day-to-day operations did it rebound to its traditional position atop the sport.
Where it resides today, much to the detriment of baseball. Say whatever else you like about Steinbrenner, while he was leveraging his market position to maximize revenues and build championships in the Bronx, he was simultaneously pricing out much of the rest of baseball. Teams in Kansas City, Pittsburgh, Milwaukee, Oakland, Tampa Bay, San Diego, etc. must compete on a national (or continental, to be exact) labor market using mostly local revenues.
To wit: the Tampa Bay Rays, finally ascendant after years of futility, now have a roster of great players entering their arbitration years. Their earnings peaks are still years ahead, but they will begin commanding 40%-60%-80% of their free market value. Nonetheless, with a payroll one-third of the Yankees', Rays owner Stuart Sternberg has announced that labor costs are unsustainable and must be cut next year. If the Rays carry out that plan, they will be forced to gut the team after just three years of competitiveness. It will be nearly impossible for them to challenge for the division with a diminished payroll. This is George Steinbrenner's legacy.
Steinbrenner famously answered, when asked about revenue-sharing in baseball, that he didn't buy the Kansas City Royals. No, but his team can't play itself, so he's in business with the Kansas City Royals. The Royals' television package with Fox Sports KC nets the team an estimated $3 million. The Yankees' TV contract is opaque because the team owns 40% of the network, but their share is estimated at $1.2 billion. This is an apples and oranges comparison, but if the Yankee broadcasts on YES are responsible for just a third of the revenue, that's $400 million. In other words, a $200 million team payroll represents one half the TV revenues alone. In KC, TV revenues cover just six percent of even a meager $50 million team payroll.
The free market, to which Steinbrenner genuflected when it served him, would suggest that the Kansas City Royals -- or any other franchise struggling to keep pace with the Yankees -- simply move to New York. With 20 million people in the metro area, the Big Apple can certainly support three teams, and probably more. The Milwaukee Brewers, who serve a metro area of barely 1.8 million people, would be better off as one of 10 Major League teams in the tri-state area. But Steinbrenner always used his market monopoly (well, duopoly, to be exact) to prevent any other club from dividing his fan base. The Yankees have the ability through baseball rules, which codify an otherwise illegal trust, to prevent a Brooklyn franchise, a Long Island franchise, a northern New Jersey franchise, etc. (Congress allows baseball, uniquely, to enjoy exemption from anti-trust laws.)
The result is that it must suck to be a fan of half the teams in baseball. They can hope their favorite nine will be competitive now and then, but not for long. Ultimately, their teams can't compete with the Yankees, or even the Red Sox, Mets, Cardinals, Dodgers, Angels, etc. Worse, it sucks to be a baseball fan. There's just nothing interesting about the richest team in the capital of the world buying the best players, assembling a Hall of Fame lineup and winning the World Series.
Now, revenues are not destiny. Certainly some low-revenue franchises, like the A's of the '90s and the Twins today, manage to compete at a high level for a while guided by smart management that is committed to winning. Some low-revenue franchises simply ought to be committed. K.C. and Pittsburgh (at least in previous years), reinvested their luxury tax money back into their owners' pockets. And some big market clubs, like the Mets and Astros, fritter away their advantages on bad baseball investments.
So the Yankees deserve a lot of credit for the acumen of their professional staff. Since the Pavano-Wright debacles, they have adeptly executed their championship plan. (Even there, one would expect the richest franchise to buy the best talent for the front office.) They have assembled by far the best team and are first in line for the best available players. That ought to gratify every Yankee fan.
It ought to infuriate every baseball fan, though. And those two ideas, in a nutshell, are what George Steinbrenner left behind.
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