Since the beginning of the Steinbrenner era, the Yankees have been notorious for purchasing high-priced and sometimes overvalued free-agents. George Steinbrenner’s willingness to spend an exorbitant amount of money on his team has made Sports Agents eager to have their clients signed by the New York Yankees (for recent story, see: Johnny Damon).
But when the media, fans, and Mr. Steinbrenner himself, become aware that a fantasy team may not earn a World Series Championship, may the average salary of a Sports Agent go down along with the New York Yankees payroll? If the Yankees figure out that money alone does not buy championships, will other teams follow the Yankees in cutting costs?
In 2005, the Sports Law Blog looked at the influence of payrolls when it comes to success in Major League Baseball. The result: a high payroll does not equal success, but that a team should spend between $60 million and $80 million to have a shot at making the playoffs. Once a team makes the playoffs, throw all numbers out the door; any team can win it all.
The Sports Law Blog has decided to run the same study again this year. The most interesting point that I found was that out of 12 teams that spent between $60 million and $89 million, 5 teams made the playoffs, wheres only 3 out of 10 teams that spent more than $89 million made the playoffs.
Their conclusion is that salary caps are not needed. My conclusion is that baseball agents may be looking at lower commissions in the future as teams get smarter with the money that they spend. Yes, the data should conclude that salary caps are not needed because market forces should automatically drive payrolls down due to anticipated results. This in turn will cause a decrease in the average player salary, unless of course, teams below the $60 million benchmark decide to stop pocketing the money they receive from luxury taxes and spend it on the advancement of their teams.
It’s not particularly good for baseball agents when there are reports that the 2006 New York Yankees may be the Worst On the Field Return on Investment in Team Sports History. Then again, it should be noted that the Yankees have had more wins than any other team over the past 10 years and have won 4 World Series [Yankee dollar falls again].
So maybe this is just an instance where people are getting heated in the moment, but one we will forget easily when the Yankees win another World Series in a couple of years. Maybe Sports Agents will not feel the effect of the continued success of the low-budget Athletics for a while. Still, it is something that future agents should look at and understand as commissions could go down if the Yankees do not achieve at levels that their fans, the media, and the management expects.