The Yankees’ 2018 payroll, for luxury tax purposes, checked in at $192.98 million. This represented their lowest total since 2003, when they spent $184.4 million. No one was surprised when these numbers were released at the end of the year, considering the running tally indicated that the Yankees indeed ran on track to achieve their goal of ducking under the $197 million competitive balance tax line.

By the time MLB revealed its final payroll figures, everyone was already enthralled with the drama surrounding the much-anticipated offseason. Many assumed that the primary reason that the Yankees’ brain trust had been so driven to get under the threshold in the first place was to prepare for this winter’s celebrated free agent class — one headlined by superstar position players Bryce Harper and Manny Machado, but which was originally expected to also feature ace pitchers Matt Harvey and Clayton Kershaw.

When it became clear that the Yankees were not nearly as aggressive in the market as most fans hoped they would be, I undertook the task of collecting and analyzing a large amount of data, all in an effort to better understand the Yankees’ austerity posture and where they might be headed with it. What I found was alarming. The club’s spending on MLB salaries as a percentage of revenue had been dropping steadily for some time, and had apparently just hit rock bottom.

The Yankees earned a record $668 million in 2018

Every year around Opening Day, Forbes Magazine publishes a report on MLB teams which includes estimates for each club’s revenue and franchise value. When I worked on this in December, the latest data was from 2017, so I used historical figures to estimate the Yankees’ revenue at $650 million for 2018. This meant that the Yankees spent slightly less than 30% of their revenue on big-league payroll.

As it turns out, my estimate proved too conservative. In the just-released report, Forbes put the Yankees’ revenue for 2018 at $668 million, so their spending on payroll as a percentage of revenue was only 28.9% — by far the lowest among the 30 teams. Combined, the clubs spent 46.57% of revenue on payroll last year. While 12 teams spent at least 50% of their revenue on payroll and 26 spent more than 40%, the Yankees were the only organization under 30%.

The Yankees’ spending on payroll as a percentage of revenue reached an all-time low

Not only that, but the Yankees’ spending on payroll as a percentage of revenue reached an all-time low (since Forbes began investigating and reporting this information in 1998). Meanwhile, their revenue reached an all-time high, as did Forbes’ valuation for the team. They valued the Yankees at $4.6 billion, easily making them the most valuable MLB team — just as it has been every year since Forbes began publishing these valuations over 20 years ago.

Exactly half of MLB’s 30 teams were valued at $1.5 billion or less — one-third of the Yankees’ value. The Dodgers ($3.3 billion), Red Sox ($3.2 billion), Cubs ($3.1 billion), and Giants ($3 billion) were the only other clubs besides the Yankees to reach the $3 billion valuation mark, while the Mets ($2.3 billion) and Cardinals ($2.1 billion) were the only other teams to hit the $2 billion threshold.

Looking at Forbes’ data, there appears to be a clear correlation between each franchise’s value and its annual revenue. There also seems to be an obvious link between revenue and spending on payroll, with nearly every team currently between 40 and 60 percent — just as they are every year. The Yankees, though, sit in a class by themselves. They are the richest franchise, and also the stingiest when it comes to spending on major-league payroll.

Hal Steinbrenner reacts

My article on this topic in December generated a lot of conversation, and a lot of questions. Hal Steinbrenner reacted tersely when asked about the subject by the assembled press at the Owners Meetings in February. He complained that the narrative was “false” and that it provided “no discussion of our costs.” He also attacked Forbes’ data — but not the part where they valued the Yankees as the richest baseball team in the world.

I reached out to the Yankees media relations department last week to see if Mr. Steinbrenner wanted to comment for this article, but received no response. In my e-mail, I specifically mentioned his previous complaint about the lack of discussion about the team’s costs, and offered an opportunity for him to engage on the subject. I didn’t actually expect a response, so I gathered additional data elsewhere.

The just-published book, Inside the Empire: The True Power Behind the New York Yankees, by Bob Klapisch and Paul Solotaroff, provides quite a lot of valuable insight, especially regarding the ongoing stadium costs. Klapisch and Solotaroff report that the deal to get the new Yankee Stadium built utilized $1.4 billion in public funds. Plus, because IRS rules prohibit raising public funds without incurring federal taxes on the loans, club officials negotiated with then-mayor of New York Michael Bloomberg for the city to own the new ballpark. This saved the club hundreds of millions of dollars in future taxes, and enabled them to borrow at the municipal rate.

The team pays $75 million per year in mortgage and interest on the bond, but “pays the city not a cent in rent nor a cent from what it earns from the stadium.” Not only that, but MLB allows the Yankees to deduct the $75 million from their revenue sharing bill.

”In effect, the other teams are paying one-third of our note for the new stadium,” Yankees president Randy Levine was quoted as saying in Inside the Empire.

A cash cow on steroids

Taking all these factors into consideration, I’m not sure how much — if anything — the Yankees actually pay toward the new stadium each year. Consider the explosive revenue streams from the new cathedral’s sixty-seven luxury suites, ticket revenues which reportedly more than doubled, the new moat seats, and the licensing fees the team receives from partners like Mohegan Sun, Hard Rock Cafe, and other companies that have ponied up to rent space and purchase naming rights for just about every square inch of the new stadium. I don’t think the Yankees can credibly claim the new ballpark as an “expense.”

There’s more. According to Forbes, since MLB encourages teams to upstream revenue and downstream expenses, certain Yankees revenue streams weren’t included in their figures. Among those are Yankees ownership stakes in YES, Legends Hospitality, and NYC Football Club — all cash cows. The team’s 20% stake in YES, which was valued at $5 billion before the Steinbrenners bought it back from Fox last month, pays an estimated “tens of millions in dividends” annually, according to Inside the Empire. The book also reports that Legends posts annual sales of over $700 million, and as a separate company is valued at over $1 billion. The Yankees also own 20% of the soccer team.

”Most of that off-site income is not subject to revenue sharing, so the Yankees keep 90% of it,” wrote Klapisch and Solotaroff. The co-authors also describe YES as “a cash cow on steroids.” The Yankees could conceivably be reaping hundreds of millions of dollars in revenue from these various streams that weren’t included in Forbes’ $668 million figure. Forbes managing editor Mike Ozanian called the Yankees “the most incredibly lucrative property in the history of sports-entertainment content.”

The Yankees believe that for millennials, the game is incidental

Hal paid for studies to see what millennials wanted when they came to a game. One of the things he learned was that, for many of them, the game was incidental. Instead, they went for the experience of watching the game and to document that experience on Snapchat or Facebook in the story they told friends about their lives. So informed, Hal spent millions resetting the stage. He converted the concourse overlooking monument park into an enormous outdoor bar, and built selfie stations, with strategic backdrops, all around the park. - from Inside the Empire: The True Power Behind the New York Yankees, by Bob Klapisch and Paul Solotaroff

This quote might go a long way to explaining the Yankees’ current thinking. For decades, other teams didn’t bother spending to pursue a championship, because they reaped huge profits regardless. The Cubs went over 100 years without winning a World Series, and the the Red Sox nearly as long. Fenway Park and Wrigley Field were always packed anyway.

Could it be that the Yankees are now adopting this same attitude? Maybe they decided that they can make more money by simply fielding a team that is good enough to compete for a playoff spot, rather than constructing a team designed to be a world beater.

The ghost of Robinson Cano

Inside the Empire confirms that Brian Cashman didn’t grab Justin Verlander in the summer of 2017 (when he had a chance to put in a waiver claim on the ace), because he was “following Hal’s directive to keep payroll flat.” The authors also remind readers that the Steinbrenner heir wasn’t always against spending money freely like his father did. Klapisch and Solotaroff point out that Hal was the one who approved the massive spending spree before the 2009 season, which led directly to that year’s World Series title. He also green-lit the half-billion commitment in salaries before the 2014 season. The disappointment caused by the team’s failure to make the playoffs for a second-straight year contributed to him ordering the franchise to make a move toward austerity.

That’s unfortunate, considering it was the Yankees’ refusal to negotiate with their homegrown star, Robinson Cano, that set off a chain reaction which included signing Jacoby Ellsbury as a consolation prize. Cano had finished fifth in the MVP voting playing for the Yankees in 2013, and did the same during his first season in Seattle, producing 6.4 WAR for his new team in the process.

He amassed 23.6 total WAR in his five years with the Mariners, a tally eclipsed by only 16 position players in MLB over that span — none of whom did so playing for the Yankees. Cano now stands just a tad over 500 knocks away from joining the ranks of the prestigious 3,000 hit club — a mark which, under ordinary circumstances, would likely result in him getting enshrined in Cooperstown.

Naysayers swear that the Yankees did the right thing by letting Cano go. “No one is worth $240 million,” they bellow. Well, apparently lots of people are worth that kind of money, as evidenced by the growing number of even larger contracts which have been handed out. Besides, Seattle didn’t even enter the picture until the Yankees low-balled Cano and refused to negotiate with him. Had they shown a sincere interest in keeping him, they quite possibly would have been able to for less than what the Mariners paid.

Some may claim that the Yankees dodged a bullet by letting Cano go, pointing to his PED suspension last year. It’s no sure thing that would have happened if Cano stayed in the Bronx, and plenty of reasons to remain hopeful that it wouldn't have. By all accounts, Alex Rodriguez was a changed man when he returned from his own PED suspension, and could have counseled Cano against heading down that path.

Cano also left veteran leaders like Brett Gardner and CC Sabathia behind when he departed for the West Coast, along with their wisdom. Not to mention, had Cano re-upped, the team probably still would have signed Carlos Beltran that winter, who would have served as yet another veteran role model for Cano to follow. Any way you slice it, this austerity nightmare began when the club let Cano go, and they’re now haunted by that ghost.

Yankees fans root for the Legend

I don’t know what’s worse: Steinbrenner’s notion that millennials would rather take selfies than watch the game, or that he prefers spending his energy on in-game experience rather than embracing the legions of fans who live and die with what the team does on the field every day. “You shouldn’t have to have a $250 million payroll to compete for a pennant,” Hal is quoted as saying in Inside the Empire.

No, you shouldn’t. Neither should you have to spend $100,000 to buy Babe Ruth. Nor should you have to make Joe DiMaggio the first player to break $100,000 in earnings. You also shouldn’t have to sign free agents Catfish Hunter and Reggie Jackson to successive record contracts. But the Yankees did all of those things, and they won many championships as a result.

Spending millions to create selfie stations remind me of gimmicks that owners of lousy teams have deployed at times in a desperate attempt to get people to the ballpark, like Disco Demolition Night and 10-Cent Beer Night. The problem may be that Hal Steinbrenner isn’t actually a fan. His dad was a fan, and like most true fans, George Steinbrenner was obsessed with winning.

Yankees fans root for the Legend. Yankees fans strongly desire the chance to witness the growing of the Legend. Regular-season awards and records don’t matter, except to form the opening chapters of a book about a championship. What matters to fans is getting to October and watching that ring count change from 27 to 28, and then to 29, and then to 30. That’s what Yankees fans want, Hal.

One way or another, history will be made this season. Either the Yankees will reach the World Series for the 10th straight decade, or their incredible streak will come to an end. Either way, it’s on Hal.