Yankees, Bank of America End Sponsorship Talks

The New York Yankees and Bank of America have ended talks on pursuing a major sponsorship deal.

The deal was being termed as a "pseudo stadium naming rights deal" because the two parties had discussed giving the bank premium branding in the new Yankee Stadium.

On Thursday afternoon, Bank of America confirmed to Newsday that talks were suspended last month.

A Yankees official told CNBC on Thursday that the two mutually agreed to part ways after seeing the heat that Citigroup was getting for putting its name on the new Mets stadium.

New York Yankees spokesperson Alice McGillion released this statement Thursday afternoon:

"During our discussions with Bank of America, we discussed a special relationship, not a naming rights relationship, with the bank at the new stadium. In light of recent events, with the downturn in the economy and the effect on financial institutions including government support of those institutions, we have determined that it is better to enter into a traditional business arrangement with a financial institution."

Both Bank of America and Citigroup received $45 billion in TARP funds.

Source: CNBC

Rovell: Why The Yankees Can Sign Who They Want

By Darren Rovell, CNBC

ESPN is reporting that the New York Yankees have signed free agent first agent Mark Teixeira. Add up Teixeira's contract with the offseason signings of A.J. Burnett and C.C. Sabathia and you have $423.5 million in guaranteed contracts. Pretty amazing, huh?

Sure, the Yankees have contracts that come off the books, but that's not the reason why the Yankees can do this. The reason the Yankees can do this is because their owners, the Steinbrenners, have no other primary business besides the Yankees.

What am I talking about? Think about all the other owners who have gotten pounded this year in the sector of the economy that they might still have their money in.

Think about the New York Mets, whose owners not only lost money from the Madoff mess, but are in the real estate investment business. So too is Theodore Lerner, the owner of the Washington Nationals, who were hoping to land Teixeira. The Chicago Cubs are being sold by an entity that is bankrupt.

Go down the list and you can see that there's a lot of people that lost money this year in other businesses. I have no idea where the Yankees are investing their personal money, but the bottom line is that their business is only the New York Yankees.

What does that mean? It means that as long as the Steinbrenners believe that the business of the Yankees will be good, they are not as affected as the others are. Will people still go to games? If not, will they watch the YES Network. It's a pretty simple equation.

Here's a quote from an owner: "One of the challenges I have is buying into a falling market," he told the Milwaukee Journal-Sentinel. "When you buy into a rising market, you can't move fast enough. The challenge here is that, look, any investment you made in 2008 on Wall Street, 12 months ago, 12 weeks ago, 12 days ago, even 12 hours ago, you are down. We have to be careful with what is going on here."

That owner was Mark Attanasio. He is the owner of the Milwaukee Brewers. He gave up C.C. Sabathia. And you have to believe that some of that has to do with the fact that he's an investment banker. Hank and Hal Steinbrenner are not.

Yankees Assessed $27 million Luxury Tax

The New York Yankees not only failed to make the playoffs, they were hit with their highest luxury tax in three years.

The Yankees were assessed a $26.9 million tax by the commissioner's office on Monday, up from $23.9 million last year and their biggest bill since paying nearly $34 million for 2005.

The Detroit Tigers, who also failed to qualify for the postseason, are the only other team that must pay tax and owe $1.3 million to the commissioner's office.

Checks are due by Jan. 31.

Both teams got little for what they spent. The Yankees' streak of 13 consecutive playoff appearances ended, and they finished third in the AL East at 89-73, prompting them to spend nearly a quarter-billion dollars to sign pitchers CC Sabathia and A.J. Burnett.

Detroit entered the year with lofty expectations after acquiring Miguel Cabrera and Dontrelle Willis but went 74-88 and finished last in the AL Central.

While the Yankees pay at a 40 percent rate for the amount over $155 million, the Tigers pay at a 22.5 percent rate because they exceeded the specified threshold for the first time.

This year's figure brings the Yankees' total tax to $148.5 million in the six seasons since it began - 90 percent of the total.

Before this year, the only other teams to pay were the Boston Red Sox, who owed $13.9 million for exceeding the threshold in four seasons, and the Los Angeles Angels, who paid $927,000 in 2004.

New York's payroll was $222.2 million and Detroit was second at $160.8 million for the purpose of the luxury tax. To compute it, Major League Baseball uses the average annual values of contracts for players on 40-man rosters and adds benefits.

The threshold rose from $148 million last year to $155 million this season. It goes up to $162 million next year and rises by $8 million in each of the following two seasons.

Source: Associated Press

MLB: Economy Makes Free Agent Signings More Risky

Associated Press

Major League Baseball's free-agent market opened for business at 12:01 a.m. EST Friday morning and the Yankees, who missed the playoffs for the first time since 1993, are expected to dominate proceedings.

"We're going to do what we do every year, and that's try to field a championship team," co-chairman Hal Steinbrenner told reporters on Tuesday. "That's not going to change. We know that we've got some weaknesses, and we're going to fix the problems as best we can. If that means spending money, obviously that means spending money. The philosophy has not changed."

Yankees GM Brian Cashman got things started Thursday by signing reliever Damaso Marte to a three-year, US$12-million contract and trading for Chicago White Sox first baseman/outfielder Nick Swisher.

That will likely not be the end of the moves for baseball's richest team.

New York is moving into a new Yankee Stadium that will generate tens of millions of dollars more than the team's former home, although a slowing economy has impacted luxury suite sales for this season. Seven were still available this week.

But with single-game ticket prices as high as US$2,500, the team will not be hurting for cash.

A.J. Burnett must be hopelessly underpaid because he didn't think twice about telling the Toronto Blue Jays that his current contract guaranteeing him $12 million a year just wasn't going to cut it anymore.

Hard to blame him, because fellow pitcher CC Sabathia figures to make double that by the time he reports to spring training a few months from now. Besides, there's always the nagging worry that a new administration taking office soon just might be coming after some of his fortune.

Some team, perhaps even the Blue Jays, will pay Burnett what he wants. They will because this is baseball and, as super agent Scott Boras points out, the economic rules that govern normal civilized society don't apply.

"In our myopic world," Boras said, "there's a lot of fixed elements that frankly are not as applicable to the outside world."

They may listen and nod approvingly when Bud Selig says times are tough and that teams should watch what they do with their money, as he did in a video call to general managers meeting this week in Dana Point, Calif. But toss a top starting pitcher in front of them, and even the mid-market teams start salivating and begging their bankers for a loan.