NEW YORK UNIVERSITY
School of Continuing and
Professional Studies
Preston Robert Tisch Center for Hospitality,
Tourism, and Sports Management
The New York Yankees:
Major League Baseball’s
Necessary Evil
The Third in a Series of
NYU Tisch Center Economic Briefings
Monday, March 30, 2009
Agenda
• Welcome and Introduction
- Lalia Rach, Ed.D., Divisional Dean
• Overviews with Analyses
- Wayne G. McDonnell, Jr., M.B.A., Clinical Assistant
Professor of Sports Management
• Summary and Conclusion
- Additional Information and Resources
Lalia Rach, Ed.D.
Divisional Dean
NYU Tisch Center
Wayne G. McDonnell, Jr., M.B.A.
Clinical Assistant Professor of Sports Management
NYU Tisch Center
Overview
1.
The Competitive Balance Tax
2.
Concerns Over the Yankees’ Aggressive Spending Tactics
3.
Financial Contributions of the New York Yankees to Major
League Baseball
4.
New York Yankees’ Impact on Major League Baseball’s
Attendance
5.
New Revenue Strategies
6.
Yankee Stadium: Romanesque Coliseum of Athletic
Prowess or Financial Albatross on a Economically
Depressed Community
7.
Summary and Conclusion
Major League Baseball’s Competitive
Balance Tax Violators and Their Total
Penalty Payments Since 2003
1.
New York Yankees
• $148,494,246
2.
Boston Red Sox
• $13,859,779
3.
Detroit Tigers
• $1,305,220
4.
Los Angeles Angels of Anaheim
• $927,059
•
90.22% of the penalty payments have come from the Yankees
Source: Maury Brown’s Biz of Baseball (bizofbaseball.com)
Concerns and Recommendations by
Various Team Executives
David Attanasio, Owner, Milwaukee Brewers
–
Major League Baseball needs a salary cap
Mike Flanagan, Executive Vice President of Baseball
Operations, Baltimore Orioles
–
Major League Baseball should utilize a vertical revenue
sharing model that would promote competitive balance
within baseball’s six divisions
David Samson, President, Florida Marlins
–
Compared the Marlins to an independent film trying to
compete against a big budget blockbuster studio film such
as the Yankees
–
“Juno versus The Dark Knight”
Source: Bloom, Barry M. “Some Owners Call for Salary Cap” MLB.com, January 14, 2009.
Concerns and Recommendations by
Various Team Executives
John Henry, Principal Owner, Boston Red Sox
– Competitive balance is an issue. It is possible for the
players and the owners to come together on the idea
of a salary cap in Major League Baseball.
Larry Lucchino, President and Chief Executive Officer,
Boston Red Sox
– “I think we’ve seen an offseason when the Yankees
have spent like the United States Congress.”
Source: Dittmeier, Bobbie. “Hank Rebukes Talk of Salary Cap” MLB.com, February 19, 2009.
The Yankees’ Response to the Concerns of
Various Major League Baseball Owners
Hank Steinbrenner, General Partner and Co-Chairperson,
New York Yankees
– “Along with a few other teams, we’re basically
baseball’s stimulus package.”
– “As long as we’re doing that and giving all this money
to other teams in revenue sharing, a staggering
amount, we should be able to spend on salaries what
we want to.”
– “Because of revenue sharing and because of the
popularity nationwide, the Yankees are critical to
baseball.”
Source: Dittmeier, Bobbie. “Hank Rebukes Talk of Salary Cap” MLB.com, February 19, 2009.
Key Actions and Dates Pertaining to Major League
Baseball’s Collective Bargaining Agreement (2007-2011)
October 24, 2006
–
The owners and players came to terms with a preliminary
collective bargaining agreement
November 3, 2006
–
The owners unanimously ratified the collective bargaining
agreement
December 7, 2006
–
Players ratified the agreement during their annual board meeting
December 11, 2011
–
Termination date of the current collective bargaining agreement
Sources: Maury Brown’s Biz of Baseball (bizofbaseball.com) &
Bloom, Barry M. “MLB, Union Announce New Labor Deal.” MLB.com, October 25, 2006.
Provisions Pertaining to the Collective
Bargaining Agreement (2007-2011)
Minimum Salary
–
–
–
–
$380,000 (2007)
$390,000 (2008)
$400,000 (2009)
$400,000 plus a two year cost of living adjustment (2011)
Revenue Sharing
–
–
–
31% Marginal Tax Rate
Larger revenue clubs will continue to transfer $326 million dollars
in local revenue to smaller-revenue generating franchises
Teams are required to spend revenue sharing money to improve
on field performance
Commissioner’s Discretionary Fund
–
–
$10 million dollars can be taken from the league’s central fund
and it may be redistributed by the commissioner
A team can only receive a maximum of $3 million dollars per year
Source: Maury Brown’s Biz of Baseball (bizofbaseball.com)
Provisions Pertaining to the Collective
Bargaining Agreement (2007-2011)
Thresholds for Luxury Tax on Team Payrolls
–
–
–
–
–
$148,000,000 (2007)
$155,000,000 (2008)
$162,000,000 (2009)
$170,000,000 (2010)
$178,000,000 (2011)
Tax Rates
– 22.5% for a first time luxury tax offender
– 30.0% for a second time luxury tax offender
– 40.0% for a third or subsequent luxury tax offender
Source: Maury Brown’s Biz of Baseball (bizofbaseball.com)
Owners and Team Executives Who
Support the Yankees’ Business Model
Lew Wolff, Managing Partner, Oakland Athletics
– “They are baseball. They’ve not done
anything differently than they’ve done for
years. They benefit us more than they hurt
us.”
Crane Kenney, Chairman, Chicago Cubs
– “I have no problem with what they’ve done.
They’ve done it within the confines of our
agreement.”
Source: Bloom, Barry M. “Some Owners Call for Salary Cap.” MLB.com, January 14, 2009.
The Contributions of the Yankees to Major
League Baseball
$100 million dollars annually
–
Competitive Balance Tax penalties and participation in Major
League Baseball’s Revenue Sharing Program
Highly Competitive Team
–
A roster of perennial all stars and future hall of famers
–
Since the 2000 season, the Yankees have averaged 96
victories and a .591 winning percentage
Curiosity and Fascination
–
46,661 average fans per game (81.09% of maximum
capacity) at Yankee Stadium since 2000
–
A ticket to a Yankees’ game is “The Hottest Ticket in Town”
when they visit ball parks across the country
Sources: Bloom, Barry M. “Some Owners Call for Salary Cap” MLB.com, January 14, 2009, Sports Reference LLC. “(http://www.baseballreference.com/teams/NYY/attend.shtml).” Baseball-Reference.com – Major League Statistics and Information. http://www.baseballreference.com/. (December 23, 2008), http://www.ballparks.com/baseball/american/yankee.htm
The Contributions of the Yankees to Major
League Baseball
Operating Revenues Administered by the Commissioner’s Office
–
Advanced media opportunities, lucrative television contracts
and the ability to launch a network solely dedicated to
baseball
–
Prominent global status in Latin America and the Far East
through international broadcast agreements, player
acquisitions and professional relationships with the Yomiuri
Giants and the Chinese Baseball Association
–
Ambassadors on behalf of a sport which has grown accustom
to achieving annual league revenues of $6.0 billion dollars
–
The strength and popularity of Major League Baseball’s brand
is due in part to the Yankees’ unquenchable thirst for
opulence and dominance.
Recent Accomplishments by the
New York Yankees
– An estimated $1.5 billion dollars spent on player
contracts since the 2000 season
– One World Championship (2000)
– Eight playoff appearances since the 2000
season
– Won at least ninety games seven times since
the 2000 season (2001 – 2007)
Sources: USA Today salary database (http://content.usatoday.com/sports/baseball/salaries/teamresults.aspx?team=3), Sports Reference LLC.
“(http://www.baseball-reference.com/postseason/).” Baseball-Reference.com – Major League Statistics and Information. http://www.baseballreference.com/. (February 13, 2009), Sports Reference LLC. “(http://www.baseball-reference.com/teams/NYY/).” Baseball-Reference.com –
Major League Statistics and Information. http://www.baseball-reference.com/. (February 13, 2009)
Seismic Changes in Modern Baseball Management
– In the early part of the decade, revenue
disparity was commonplace
– The Yankees’ revenues were more than the
Twins, Expos, Marlins and Royals combined
– It would take four franchises to equal the
Yankees $242 million dollars in revenues for
the 2001 season
– Did the Yankees inadvertently contribute to
the “Moneyball” revolution?
Source: Torre, Joe and Verducci, Tom. The Yankee Years. New York: Doubleday, 2009. (Pages 166, 174, 176, 182).
Baseball Executives Adapt to the New Business
Environment Created by the Yankees
Theo Epstein, Executive Vice President and General
Manager, Boston Red Sox
– An estimated $1.0 billion spent on player contracts
since the 2000 season
– Two World Championships (2004 & 2007)
– Five playoff appearances since the 2000 season
– Won at least ninety games six times since the
2000 season (2002 – 2005, 2007 & 2008)
Sources: USA Today salary database (http://content.usatoday.com/sports/baseball/salaries/teamresults.aspx?team=3), Sports Reference LLC.
“(http://www.baseball-reference.com/postseason/).” Baseball-Reference.com – Major League Statistics and Information. http://www.baseballreference.com/. (February 13, 2009), Sports Reference LLC. “(http://www.baseball-reference.com/teams/OAK/).” Baseball-Reference.com – Major
League Statistics and Information. http://www.baseball-reference.com/. (February 13, 2009), Sports Reference LLC. “(http://www.baseballreference.com/teams/BOS/).” Baseball-Reference.com – Major League Statistics and Information. http://www.baseball-reference.com/. (February 13,
2009)
Baseball Executives Adapt to the New Business
Environment Created by the Yankees
Billy Beane, Vice President and General Manager,
Oakland Athletics
– An estimated $461 million dollars spent on player
contracts since the 2000 season
– Zero World Championships and one appearance
in the ALCS (2006)
– Five playoff appearances since the 2000 season
– Won at least ninety games six times since the
2000 season (2000 – 2004 & 2006)
Sources: USA Today salary database (http://content.usatoday.com/sports/baseball/salaries/teamresults.aspx?team=3), Sports Reference LLC.
“(http://www.baseball-reference.com/postseason/).” Baseball-Reference.com – Major League Statistics and Information. http://www.baseballreference.com/. (February 13, 2009), Sports Reference LLC. “(http://www.baseball-reference.com/teams/OAK/).” Baseball-Reference.com – Major
League Statistics and Information. http://www.baseball-reference.com/. (February 13, 2009), Sports Reference LLC. “(http://www.baseballreference.com/teams/BOS/).” Baseball-Reference.com – Major League Statistics and Information. http://www.baseball-reference.com/. (February 13,
2009)
Seismic Changes in Modern Baseball Management
Major League Baseball
– Building organizations and implementing
strategies that would foster long term
success
– Former players and scouts versus Ivy
League educated executives
– Embrace modern medicine and several
advancements with biomechanics
Sources: Torre, Joe and Verducci, Tom. The Yankee Years. New York: Doubleday, 2009. (Pages 166, 174, 176, 182).
The Realities of Modern
Baseball Management
1.
The New York Yankees
• Teams Cannot Financially Compete Against Them
• Dominate free agency
• Auction market structure benefits the Yankees
2.
Avoid Deficit Spending
• Exorbitant contracts can impede growth
• Utilize an effective and efficient farm system
• Marginal Revenues versus Marginal Costs
• Balance between winning and financial returns
3.
Cost Effective Models for Player Procurement
• Multi year contracts versus salary arbitration
Source: Gennaro, Vince. Diamond Dollars: The Economics of Winning in Baseball. Massachusetts: Maple Street Press, 2007. (Pages 1-46).
Notable Salary Arbitration
Eligible Players
who Signed Multi-Year Deals
with Their Respective Ball Clubs
Players of Distinction
Contract
Average
Contract
Player
Team Position Years
Value
Annual Value Expires
Nick Markakis Orioles RF
6 $66,100,000 $11,016,667
2014
Kevin Youkilis Red Sox 1B
4 $41,125,000 $10,281,250
2012
Prince Fielder Brewers 1B
2 $18,000,000 $9,000,000
2010
Joe Mauer
Twins
C
4 $33,000,000 $8,250,000
2010
Justin Morneau Twins
1B
6 $80,000,000 $13,333,333
2013
David Wright Mets
3B
6 $55,000,000 $9,166,667
2012
Jose Reyes
Mets
SS
4 $23,250,000 $5,812,500
2010
Chase Utley Phillies 2B
7 $85,000,000 $12,142,857
2013
Cole Hammels Phillies P
3 $20,500,000 $6,833,333
2011
Ryan Howard Phillies 1B
3 $54,000,000 $18,000,000
2011
Source: http://mlbcontracts.blogspot.com/
Option
Year
2015
2013
None
None
None
2013
2011
None
None
None
The Yankees’ Dramatic Impact
on Attendance
Major League Baseball
• Consistently flirts with an overall league attendance of 80 million
New York Yankees
• More than 33.9 million fans at Yankee Stadium since 2000
• Immense contributions to the business of baseball in ball parks
across the country
2000-2008 Seasons
• The Yankees played in 729 regular season road games
• Overall attendance for these games exceeded 26.6 million fans
• Average attendance for a Yankees’ road game was 36,506
• A visit by the Yankees injected desperately needed local revenues
into struggling franchises
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information. http://www.baseball-reference.com/.
(January 9, 2009)
Home Attendance Analysis for the
New York Yankees (2000-2008)
% Change
Average
% of
from
Previous
Attendance Maxi mum
Overall
Year
Per Game Capacity Attendance
Season
2000
38,193
66.37%
3,055,435
(7.22%)
2001
40,811
70.92%
3,264,907
6.86%
2002
43,323
75.29%
3,465,807
6.15%
2003
42,263
73.44%
3,465,600
(0.01%)
2004
46,609
81.00%
3,775,292
8.94%
2005
50,502
87.76%
4,090,696
8.35%
2006
52,445
91.14%
4,248,067
3.85%
2007
52,729
91.63%
4,271,083
0.54%
2008
53,070
92.22%
4,298,655
0.65%
Averages
46,661
81.09%
3,770,616
3.12%
Season Summary
Won World Series
Lost in World S eries
Lost in Division Series
Lost in World S eries
Lost in ALCS
Lost in Division Series
Lost in Division Series
Lost in Division Series
3rd Place in AL East
Sources: Sports Reference LLC. “(http://www.baseball-reference.com/teams/NYY/attend.shtml).” Baseball-Reference.com –
Major League Statistics and Information. http://www.baseball-reference.com/. (December 23, 2008),
http://www.ballparks.com/baseball/american/yankee.htm
New York Yankees’ Impact on the Home Attendance
for American League East Ball Clubs (2000-2008)
American
League
Road Opponents
Overall
Home
Attendance
Blue Jays
18,036,190
23,679
79
2,621,020
33,177
9,498
40.11%
Devil Rays
11,857,565
15,381
81
1,921,499
23,722
8,341
54.23%
Orioles
23,165,688
30,621
81
3,415,361
42,165
11,544
37.70%
Red Sox
25,040,830
34,262
82
2,873,002
35,037
774
2.26%
33,525
7,539
29.01%
Averages
Totals
Average Home
# of
Total
Average Home Difference in
Attendance for a
Home Games
Attendance
Attendance for a Average Home
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
Attendance
25,986
78,100,273
323
10,830,882
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
%
Change
New York Yankees’ Impact on the Home Attendance
for American League Central Ball Clubs (2000-2008)
American
League
Road Opponents
Overall
Home
Attendance
Indians
21,251,034
28,831
35
1,300,116
37,146
8,315
28.84%
Royals
13,805,236
18,662
32
835,163
26,099
7,437
39.85%
Tigers
20,019,021
27,114
36
1,256,189
34,894
7,780
28.69%
Twins
17,483,702
23,655
33
1,019,836
30,904
7,249
30.65%
White Sox
19,746,306
26,830
34
1,072,423
31,542
4,712
17.56%
32,117
7,099
28.37%
Averages
Totals
Average Home
# of
Total
Average Home Difference in
Attendance for a
Home Games
Attendance
Attendance for a Average Home
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
Attendance
25,018
92,305,299
170
5,483,727
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
%
Change
New York Yankees’ Impact on the Home Attendance
for American League West Ball Clubs (2000-2008)
Average Home
# of
Total
Average Home Difference in
Attendance for a Average Home
Attendance for a
Home Games
Attendance
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
Attendance
American
League
Road Opponents
Overall
Home
Attendance
Angels
26,324,084
35,690
41
1,733,921
42,291
6,601
18.50%
Athletics
17,997,967
23,971
36
1,386,272
38,508
14,537
60.64%
Mariners
26,379,284
35,627
40
1,761,302
44,033
8,406
23.59%
Rangers
21,593,455
28,976
38
1,541,982
40,578
11,602
40.04%
41,352
10,287
33.11%
Averages
Totals
31,066
92,294,790
155
6,423,477
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
%
Change
New York Yankees’ Impact on the Home Attendance
for All American League Ball Clubs (2000-2008)
Total
Average Home Difference in
Average Home
# of
Home Games
Attendance
Attendance for a Average Home
Attendance for a
Attendance
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
American
League
Road Opponents
Overall
Home
Attendance
Angels
26,324,084
35,690
41
1,733,921
42,291
6,601
18.50%
Athletics
17,997,967
23,971
36
1,386,272
38,508
14,537
60.64%
Blue Jays
18,036,190
23,679
79
2,621,020
33,177
9,498
40.11%
Devil Rays
11,857,565
15,381
81
1,921,499
23,722
8,341
54.23%
Indians
21,251,034
28,831
35
1,300,116
37,146
8,315
28.84%
Mariners
26,379,284
35,627
40
1,761,302
44,033
8,406
23.59%
Orioles
23,165,688
30,621
81
3,415,361
42,165
11,544
37.70%
Rangers
21,593,455
28,976
38
1,541,982
40,578
11,602
40.04%
Red S ox
25,040,830
34,262
82
2,873,002
35,037
774
2.26%
Royals
13,805,236
18,662
32
835,163
26,099
7,437
39.85%
Tigers
20,019,021
27,114
36
1,256,189
34,894
7,780
28.69%
Twins
17,483,702
23,655
33
1,019,836
30,904
7,249
30.65%
White S ox
19,746,306
26,830
34
1,072,423
31,542
4,712
17.56%
35,392
8,215
30.23%
Averages
Totals
27,177
262,700,362
648
22,738,086
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
%
Change
New York Yankees’ Impact on the Home Attendance
for National League East Ball Clubs (2000-2008)
National
League
Road Opponents
Braves (2000)
Marlins (2001)
Mets (2000-2008)
Expos/Nationals (2000,2006)
Phillies (2001,2006)
Overall
Home
Attendance
3,234,304
1,261,226
26,912,802
3,079,328
4,483,869
Averages
Totals
Average Home Difference in
Total
# of
Average Home
%
Attendance for a Average Home
Attendance
Home Games
Attendance for a
Attendance Change
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
39,610
3
144,703
48,234
8,624
21.77%
14,866
3
116,525
38,842
23,975
161.27%
36,288
27
1,475,099
54,633
18,346
50.56%
18,439
6
202,920
33,820
15,381
83.42%
26,896
6
288,078
48,013
21,117
78.51%
27,220
38,971,529
44,708
45
2,227,325
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
17,489
64.25%
New York Yankees’ Impact on the Home Attendance
for National League Central Ball Clubs (2000-2008)
National
League
Road Opponents
Astros (2008)
Brewers (2005)
Cardinals (2005)
Cubs (2003)
Pirates (2008)
Reds (2003)
Overall
Home
Attendance
2,779,487
2,211,023
3,542,271
2,962,630
1,609,076
2,355,259
Averages
Totals
Average Home
# of
Total
Average Home Difference in
Attendance for a
Home Games
Attendance
Attendance for a Average Home
%
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
Attendance
Change
34,413
3
129,669
43,223
8,810
25.60%
26,964
3
107,824
35,941
8,977
33.29%
43,480
3
150,799
50,266
6,786
15.61%
36,469
3
118,063
39,354
2,886
7.91%
19,130
3
116,900
38,967
19,836
103.69%
28,578
3
126,191
42,064
13,486
47.19%
31,506
15,459,746
41,636
18
749,446
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
10,130
32.15%
New York Yankees’ Impact on the Home Attendance
for National League West Ball Clubs (2000-2008)
National
League
Road Opponents
Diamondbacks (2004)
Dodgers (2004)
Giants (2007)
Padres (2002)
Rockies (2002,2007)
Overall
Home
Attendance
2,519,560
3,488,283
3,223,217
2,221,230
5,116,835
Averages
Totals
Average Home
# of
Total
Average Home Difference in
Attendance for a
Home Games
Attendance
Attendance for a Average Home
%
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
Attendance
Change
30,448
3
144,592
48,197
17,749
58.29%
42,603
3
165,240
55,080
12,477
29.29%
39,651
3
130,413
43,471
3,820
9.63%
26,350
3
165,929
55,310
28,960
109.90%
30,734
6
291,603
48,601
17,867
58.13%
33,957
16,569,125
50,132
18
897,777
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
16,174
47.63%
New York Yankees’ Impact on the Home Attendance
for All National League Ball Clubs (2000-2008)
National
League
Road Opponents
Astros (2008)
Braves (2000)
Brewers (2005)
Cardinals (2005)
Cubs (2003)
Diamondbacks (2004)
Dodgers (2004)
Giants (2007)
Marlins (2001)
Mets (2000-2008)
Expos/Nationals (2000,2006)
Padres (2002)
Phillies (2001,2006)
Pirates (2008)
Reds (2003)
Rockies (2002,2007)
Overall
Home
Attendance
2,779,487
3,234,304
2,211,023
3,542,271
2,962,630
2,519,560
3,488,283
3,223,217
1,261,226
26,912,802
3,079,328
2,221,230
4,483,869
1,609,076
2,355,259
5,116,835
Averages
Totals
Average Home
# of
Total
Average Home Difference in
Attendance for a
Home Games
Attendance
Attendance for a Average Home
Non-Yankee Game Vs. the Yankees for Yankee Games Yankee Game
Attendance
34,413
3
129,669
43,223
8,810
39,610
3
144,703
48,234
8,624
26,964
3
107,824
35,941
8,977
43,480
3
150,799
50,266
6,786
36,469
3
118,063
39,354
2,886
30,448
3
144,592
48,197
17,749
42,603
3
165,240
55,080
12,477
39,651
3
130,413
43,471
3,820
14,866
3
116,525
38,842
23,975
36,288
27
1,475,099
54,633
18,346
18,439
6
202,920
33,820
15,381
26,350
3
165,929
55,310
28,960
26,896
6
288,078
48,013
21,117
19,130
3
116,900
38,967
19,836
28,578
3
126,191
42,064
13,486
30,734
6
291,603
48,601
17,867
32,995
71,000,400
48,268
81
3,874,548
Source: Sports Reference LLC. Baseball-Reference.com - Major League Statistics and Information.
http://www.baseball-reference.com/. (January 9, 2009)
15,273
%
Change
25.60%
21.77%
33.29%
15.61%
7.91%
58.29%
29.29%
9.63%
161.27%
50.56%
83.42%
109.90%
78.51%
103.69%
47.19%
58.13%
46.29%
The New Yankee Stadium
and Facility Management
1.
The New Yankee Stadium
• Exquisite architectural feat
• Personifies elegance and royalty
2.
Facility Management and Modern Amenities
• Integral component to a customer’s overall experience
• Extraordinary revenue potential
• Hard Rock Café
• Martini Bar
3.
Legends Hospitality Management, LLC
• Redefining baseball’s definition of revenues
Controversy and Conflict Surrounding
the New Yankee Stadium
Cost Estimates
• August 2006: Approximately $800 million dollars
• February 2009: Approximately $1.3 billion dollars
City of New York’s Industrial Development Agency
• Taxable and Tax Exempt Bonds
– Originally issued $942 million dollars in bonds
–
Recently issued an additional $370 million dollars in bonds
Massive Redevelopment Opportunity
• South Bronx
– One of the poorest Congressional districts in the country
Source: Lucadamo, Kathleen and Smith, Greg B. “Yankees and Mets Score New Tax Break.” New York Daily News January
16, 2009.
Summary
• While their management style might come across as
being flamboyant and even self righteous, they have
influenced Major League Baseball into adopting
cohesive business strategies that promote equality
and fiscal accountability.
• Not only have they redefined revenue generation in
the sport, but they have also motivated numerous
franchises to reexamine their models of business.
• Any way you look at it, the New York Yankees are a
necessary evil that drives Major League Baseball’s
multi-billion dollar revenue engine.
Sources
Bloom, Barry M. “MLB, Union Announce New Labor Deal.” MLB.com,
October 25, 2006.
Bloom, Barry M. “Some Owners Call for Salary Cap” MLB.com, January
14, 2009.
Brown, Maury “Biz of Baseball” (bizofbaseball.com)
Dittmeier, Bobbie. “Hank Rebukes Talk of Salary Cap” MLB.com, February
19, 2009.
Gennaro, Vince. Diamond Dollars: The Economics of Winning in Baseball.
Massachusetts: Maple Street Press, 2007. (Pages 1-46).
Lucadamo, Kathleen and Smith, Greg B. “Yankees and Mets Score New
Tax Break.” New York Daily News January 16, 2009.
Torre, Joe and Verducci, Tom. The Yankee Years. New York: Doubleday,
2009. (Pages 166, 174, 176, 182).
Sources
Sports Reference LLC. “(http://www.baseballreference.com/teams/NYY/attend.shtml).” Baseball-Reference.com –
Major League Statistics and Information. (http://www.baseballreference.com/). (December 23, 2008)
Sports Reference LLC. Baseball-Reference.com - Major League Statistics
and Information. http://www.baseball-reference.com/. (January 9, 2009)
Sports Reference LLC. “(http://www.baseballreference.com/postseason/).” Baseball-Reference.com – Major League
Statistics and Information. (http://www.baseball-reference.com/).
(February 13, 2009)
Sports Reference LLC. “(http://www.baseball-reference.com/teams/NYY/).”
Baseball-Reference.com – Major League Statistics and Information.
(http://www.baseball-reference.com/). (February 13, 2009)
Sources
Sports Reference LLC. “(http://www.baseballreference.com/teams/OAK/).” Baseball-Reference.com – Major
League Statistics and Information. (http://www.baseballreference.com/). (February 13, 2009)
Sports Reference LLC. “(http://www.baseballreference.com/teams/BOS/).” Baseball-Reference.com – Major
League Statistics and Information. (http://www.baseballreference.com/). (February 13, 2009)
USA Today salary database
(http://content.usatoday.com/sports/baseball/salaries/teamresults.aspx?t
eam=3),
http://www.ballparks.com/baseball/american/yankee.htm
http://mlbcontracts.blogspot.com/
Enroll Now
The Business of Baseball
June 22 - 26, 2009
in midtown New York City
The new summer intensive course offered by the
New York University Preston Robert Tisch Center
for Hospitality, Tourism, and Sports Management
Faculty: Wayne G. McDonnell, Jr., M.B.A., Clinical Assistant Professor
For additional information and to enroll: www.scps.nyu.edu/baseball
NYU Tisch Center Programs
Undergraduate Degrees:
-
B.S. in Hotel and Tourism Management
-
B.S. in Sports Management and Leisure Studies
Graduate Degrees:
-
M.S. Hospitality Industry Studies
-
M.S. Tourism and Travel Management
-
M.S. Sports Business
Professional Certificates:
-
Food and Beverage Operations
-
Hotel Operations
-
Meeting, Conference, and Event Management
For additional information: www.scps.nyu.edu/tischcenter
Additional Information
NYU Preston Robert Tisch Center for Hospitality, Tourism, and Sports Management
• A copy of this PowerPoint® presentation is available at:
- http://www.scps.nyu.edu/tischpodcast (Tisch Center
citation required when sharing podcast information)
• Questions and comments may be sent to:
- [email protected]
• Follow the NYU Tisch Center on Twitter at:
- http://twitter.com/nyutischcenter