Baseball fans, do you think I'm onto something here?

Question

I think that over the next 3 or 4 years, the Boston Red Sox are going to be making a lot more money in merchandise just because they have a pretty good team right now and have a lot of fans that like to show their team pride when their team is on top.

Because of this, the Red Sox are going to have a much larger budget to use during trading and negotiating contracts. This already happened when they paid $50,000,000 just to talk with their pitcher from over seas.

On the other hand, a lot of the New York Yankees star players contracts are coming up for renewal in the next few years. They will be keeping some of these players, but like Joe Torre, a lot of them are going to be getting thrown out or traded. The Yankees also have good double and triple A teams for developing young players. They aren't going to need to spend so much money on their players anymore since they pretty much will be raised Yankees.

So here is my theory: (Wait for added details.)

Over the next 3 - 5 years, the Yankees salary for their players is slowly going to decrease and come within a reasonable distance to those of teams that do not have as large of a budget. The Red Sox on the other hand will have nothing to do with their money accept give it to the team owners and purchase players. They are also going to need to pony up some serious dough when the contracts for some of the young stars on their team contracts run out. This is why I think that in a few years, the Red Sox are going to have the highest paid team and baseball, and the Yankees are going to be coming back down to Earth with their salary.

If you disagree with me please explain why.

Did not know that teams share merchandise revenue, but the Red Sox do sell out their stadium almost as much as the Yankees do now.

Answer 1

Merchandise revenues go into baseball's general fund, which is shared by all the teams. The only "extra" revenues from merchandise would be from game-used materials, and that's a drop in the merchandising bucket.

The Yankees will continue to have more money to spend for as long as they reap the rewards of the YES network and all the extra money given to the team by the network. Strong attendance helps, but TV revenues are far more valuable.

Answer 2

Your theory is wrong. The Yankees are always going to be the largest market team in the largest city in the US, and there is no way that the ownership will allow them to not give their fans an opportunity to win every year by purchasing talent. The only way this will change is if they sell their ownership to someone who puts all of their efforts into recruiting and developing new talent in the farm leagues.

The money that comes in through merchandise is a help for the Red Sox. The Yankees have at least as much if not more they they sell every year (look at the numbers if you can find them). That money doesn't stop the yankees from spending though, and the reason the red sox spent the 51 mil on talking to daisuke was to be a perverbial cack block to the yankees more than anything.

Answer 3

There is one BIG asumption on your part; That the Yankees payroll WOULD go down IF. What makes you think that? Their payroll has risen steadily every year and now they are paying Joe Girardi 7.5 Mil for the next 3 years. That's .5 Mil more than Torre. Most of A-rod's salary was paid for by the RANGERS so with him gone they don't reallty save that much. They will have to tender contracts to any of their minor leaguers they bring up full time like Joba, Hughes or Kennedy. They are already saying they will try to give Posada around $40 mil and who knows about Rivera probably something equally as insane money wise. Bobby Abreu probably will get his 11+ million too. Plus, if you think the Steinbrenners won't go after a couple big $$ free agent pitchers this year you ARE CRAZY! And on and on it goes. What indication do you see that they are cutting back on spending at all?
You can't predict 2009 or beyond based on what's happening now or you'd have to assume an even bigger payroll growth will be the case; as it has been every year for a long time.

As far as the RED SOX go with the extra revenue they've gotten from their investments what is the indication their payroll would go up? The $51 mil posting fee for DICE K was well spent and already recouped (plus some) with TV deals, sponsorships & merchandise.
What about the $20 mil posting fee the YANKEES paid for Kai Igawa...money well spent I'm sure.
The RED SOX had they're farm system voted the best in baseball this year and I don't see them having to raise their payroll anytime soon with the trades they can make. If anything it will probably go down a bit since Coco Crisp & Curt Schilling will be gone next year, replaced by lower priced better playing rookies in Jacoby Ellsbury & Clay Buchholtz. This RED SOX management is a whole lot smarter that those of past & smarter than the YANKEES. The offer to Roger Clemens was a perfect example of that.
The RED SOX have out managed & out performed & out dealed the YANKES for a while now and there is no reason to believe that that will change anytime soon.

Answer 4

Yes but you just spent a long time making a point that is a known factor to most baseball fans. The real question is will John Henry Larry Luchinno Tom Werner and Theo Epstien be able to spend that money a little better than George and Hank Steinbrenner and Brian Cashman and I think the brain behind the red sox organization is just that brains when the yankees are mostly money and not quite as much brains.

Answer 5

Well, the Sox sell out all their games, the Yankees don't. But, then again they have 20, 000 less seats to fill. I don't necessarily agree with what you're saying. Because, the Yankees will have to start paying Melky, Cano, Wang, Hughes and several others, within the next few years. So they will have to pay them a lot of money. WIthout A-Rod's salary, and Giambi's then yes, it will go on. But the Yanks and Sox will probably have similar payrolls.

Answer 6

I would have to say that you are somewhat off base. Yes, the Red Sox will sell many more tee shirts, caps, etc. but have you ever of a thing called "revenue sharing"? They have to share that revenue with the rest of the teams in baseball.

Here is something that you are probably not aware of but one thing that has set the Red Sox apart from most, if not every other team in baseball, is the fact that they, as a company, invest in things that do not have anything at all to do with baseball. Therefore, whatever money they make from those non-baseball investments is theirs to keep and does not have to be shared with the other teams. How do you think they came up with all that money to get Matsusaka or whatever his name is from Japan?

Answer 7

Your theory is partly correct. A lot of people have jumped on the Sox bandwagon in recent years. However, most joined it because the Red Sox are the anti-Yankees brand ID that so many fans seek. You either love the Yankees or you (rightly so) hate them.

The Sox' success may actually hurt them in the long run, however. As they become just as successful as the Yankees in the coming years (due to the signing of high-priced free agents like the Yankees), those very same bandwagon fans may jump ship to root for the Phillies or another small market alternative. God forbid everyone becomes an Orioles or Blue Jays fan, but it may just happen.

Part 2:
Yes. That's logical. That's pretty much the established cycle in every sport with free agency.

Duh? Why don't you come up with a theory that says the sky is blue or something?

Answer 8

Both teams will continue to spend all the money they need to put together a winner. They are #1 and #2 in spending now and I believe it will stay that way.

Answer 9

yeah i'm onto something... why is acceptable for bandwagon jumpers to cheer for the yanks but it's totally wrong if they go to the red sox???

Answer 10

Ummm 12?