Are the Yankees Evil? Or just unseemly?

Posted by: Michael Mandel on December 26

I’ve taken a ten-day break from posting, but now I’m refreshed and ready to go. Let’s warm up with something light and easy: The Yankees. For full transparency, I was a New York Mets fan growing up, so I never idolized the Yanks. But I did appreciate their winning ways under George Steinbrenner.

These last set of expensive free agent signings, though, did take me aback. Let me quote from a columnist for the Philadelphia Inquirer. Phil Sheridan writes:

The New York Yankees represent the very worst of America.
Overstatement? Consider the times. Cornerstone industries are faltering, taxpayers are being asked to bail out mismanaged financial institutions and their overpaid CEOs, and decent, hard-working men and women are being laid off or worrying that they could be next.

Now consider the eight-year, $180 million contract the Yankees reportedly handed first baseman Mark Teixeira yesterday. Stack it on top of the $161 million deal signed by pitcher CC Sabathia and the (relatively) modest $82.5 million promised to A.J. Burnett and you have the most egregious display of financial irresponsibility in the history of sports.

Most egregious? Perhaps not. But the Yankees’ free-spending ways certainly are unseemly during this period. I know that they have the right to spend their money anyway they want. But especially given the way that the collapse on Wall Street is going to hurt all New York area workers, it’s going to look terrible for them to be adding these high-priced ball players.

On a broader note, the Steinbrenners are also not clearly considering what might happen to the revenue flows as the recession worsens. Right now sports teams—even the richest—need to moving into hunker down mode. Sports is a discretionary expense, not a necessity, at a time when consumers will be cutting back.

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Reader Comments

Joe Cushing

December 28, 2008 12:38 AM

By now you've figured out that I'm a big fan of free markets. In a free market society a business should be able to pay whatever it wants to its employees if the business feels it will make more profit by doing so. With this attitude you might think I have no problem with sports teams pay levels. You'd be wrong. The problem is that sports teams do not operate in a free market. The City and maybe the state of New York should be confiscating that money to pay for a tiny portion of the stadium the Yankees play in. This should be written into the contract they make when municipalities build these stadiums. Better yet, municipalities shouldn't build stadiums. Then players would receive a REAL market wage. If the team could afford to build a stadium, it would have a lot less money left over for players wages.

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Michael Mandel, BW's award-winning chief economist, provides his unique perspective on the hot economic issues of the day. From globalization to the future of work to the ups and downs of the financial markets, Mandel-named 2006 economic journalist of the year by the World Leadership Forum-offers cutting edge analysis and commentary.

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