Hal Steinbrenner Helped Write Baseball's Salary Cap Offer. George Would Be Ashamed.

Last week a reporter put a simple question to Hal Steinbrenner: would he support capping baseball payrolls? He did not answer yes or no. What he said was more revealing.

At the Oct. 21 video news conference where general manager Brian Cashman confirmed a new contract, the Yankees owner noted that he sits on the league's labor policy committee and said, "I helped craft, one of many, the proposals that we have given at the bargaining table." He added, "And I support those proposals in their entirety." A television clip circulating since then has him saying he helped "draw up" the plan. Those were not his words, but the substance holds. The owner of baseball's most famous big spender helped write the owners' cap offer.

Owners went public with their opening offer in May. Starting in 2027, no club could top $245.3 million or drop below $171.2 million, using luxury tax accounting. The league itself figures eight teams sit above that line today, and that together they would need to trim $578 million. The current labor deal runs out at 11:59 p.m. on Dec. 1. A lockout is expected to start as soon as it lapses.

Owners mostly get rich not from the yearly ledger but from what the franchise fetches when it is sold. Two separate valuation estimates published this year put the Yankees at $8.5 billion and $9 billion, each about 12 times annual revenue of roughly $710 million to $750 million.

Here is an illustration, not a forecast. Counted the way the luxury tax counts it, the Yankees' 2026 payroll came to roughly $342 million, trailing only the Dodgers and Mets. A $245.3 million cap would force about $97 million a year off that figure. If a buyer valued each added dollar of dependable yearly profit at just 10 times, that saving alone would lift the team's price by close to $1 billion. A cap tells a buyer what the biggest expense will be for years ahead, and predictable costs command a higher price. A lost season is a one-time hit. A higher sale price lasts.

Players live on a different calendar. A 2007 study of position players who debuted between 1902 and 1993 found a rookie could expect about 5.6 years in the majors, and about one in five lasted a single season. A player is not paid in franchise appreciation. He is paid one season at a time, and a lost year is money he never recovers.

As an example, a player like Ben Rice is 28 years old, has one more year of team control and then 3 years of arbitration. As it currently stands Ben will be a free agent as he enters his age 32 season. If he continues to perform, he likely has something like 4 years of huge earnings power at that point - his age 32 through 35 seasons would command, on today's market, something like $120 million (4 years at $30 million per season). If we enter a work stoppage and there is no baseball in 2027, Ben Rice's service clock PAUSES. If we resume baseball in 2028 with a salary cap in place, Hal Steinbrenner will be $1 billion richer, and players like Ben Rice will have lost a year of his prime earnings years, won't hit free agency until he is 33, and of course will then be subject to the new salary cap structure. That is a disaster for Ben and the players union, and a bonanza for the owners.

That mismatch is the whole fight. Owners can wait. Most players cannot. Hockey has already run the experiment. On Feb. 16, 2005, Commissioner Gary Bettman scrapped hockey's whole 2004-05 schedule. The gap at the finish was $6.5 million: the players would go as high as $49 million, while the owners would not move above a $42.5 million cap, and no deal came. That July the players took a lower $39 million cap for 2005-06, along with a $21.5 million floor, pay tied to 54 percent of league revenue and a 24 percent cut to every existing contract. The owners got the cost certainty they had demanded, at the price of one season.

If baseball follows that script, the likely ending is a cap. The open question is whether players accept one at the table or after a season is gone. Is there any way to avoid those outcomes? For starters the players union needs better leadership - a story for a different article.

Now for the Yankees...and this is where it gets strange. For a Steinbrenner to favor spending limits, he must believe the club can win on scouting, player development and coaching. Hal has said as much. In 2024 he told reporters, "I don't believe I should need a $300 million payroll to win a championship," and ranked the club's farm system among the stronger ones in the game.

Odd thing to believe if you have been watching baseball for the last decade. The Yankees routinely outspend all but a few teams, make the playoffs most years, but get bounced early in the playoffs, typically being embarrassed by younger, scrappier and cheaper rosters. That seems like an acceptable outcome to Mr. Steinbrenner, who keeps rolling out the same leadership year after year. Now Hal wants to add to that quagmire by reducing his payroll by 30%. Exciting news for the fan base.

The other possibility is that winning is no longer the point. Judged by his actions, that reading fits Hal better.

George Steinbrenner, who bought the club in January 1973, built his name on spending to win. His son now helps write rules that would end that. George would be rolling in his grave. Sad.