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.
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.