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<p>The Mets are relativbely new yes, but they have been around long enough to have som more success, that arguement is a bit weak. The Ravens were an expansion team, and have won one SB and contended for more. That’s a little messed up because the Yankees spent $60M more than the Mets, which is significant. </p>
<p>And let’s talk about those same Mets. Last year, and the year before that, they looked to be in good shape to head to the playoffs. This got nearly every Met fan excited, but they imploded at the end. They made a fair amount of cash from fielding a pretty good team for 9/10ths of the year. I think they generated around $240M this past year, which is not bad (with a $140M payroll). But, they opened a new stadium, a big fn draw. And a testement to fans, who did keep buying stuff and posted pretty good attendance I think (please check me here, I think maybe 40,000+ showed up). Fans kept hope, an especially good sign considering the owners have lost a fortune because of Madoff. Plus, like you said, a large market, and all those people are not Yanks fans, the same that not all Chicagoans are Cubbies fans, people form allegiances. </p>
<p>Now about generating revenue. The Washington Redskins spend the most on free agents in the NFL (look at Haynesworth and Deion Sanders). Yep, they do reeeally well nowadays. Snyder spends every off season, and they lose, yet he still makes money. The Yanks, unlike Mets and Redskins, target the correct players that fit in with their team,a nd the right coaching staff to boot. Plus, the Yanks have a pretty stable continous ownership. So, bad teams still generate revenue from TV and whatnot, but that does not garauntee succes. That is a point I have maintained: The Yanks spend money on the right pieces at the right time. Nearly everybody thought that Haynesworth was/is the ebst NT in the entire NFL. The Redskins got him, and it’s been ho-hum so far. It takes a complete team to win, and the Yankees strive to do so. Yes, they missed the playoffs last year, but the brand alone that the Yankees have built up is worth over $240M, and that generates healthy returns. Brand’s get built up by success and renown, and big spending on the right people gets you there. </p>
<p>Well, law of dimishing returns is correct, but what is “the limit” here? The Yankees were at an opperating loss in 2007, shows how much they care about winning (and hence the spending to ensure that a good product is fielded. It shoudl be noted that revenue was still made through TV contracts). So, what do the Yankees do? they manage to have a new concessions deal, inked with the Dallas Cowboys, to generate more profit. You see ways to generate more money, so you don’t hit the glass ceiling. Harvard increases their revenue by investing in stocks for funding reasons. When they ran into one wall, they found a way to work around it. There is a “limit” that businesses reach, but in 2008, right before the economic meltdown, the busienss of baseball increased again. So, yes, there is a limit, but some people find ways to stretch the limit. That is like saying that, for most people (dependent on religion), that there is no limit on extent of life on this earth. Of course there is one, according to beliefs, and that does exist in baseball true. But, the Yanks are stretching that limit so far, but a wall may be soon hit again.</p>
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<p>Let me clarify because that is not what the intent was of that group of statements. Having a good team helps of course. Why would people want to see a horrible team (Nationals)? I am saying that the best product available usually garners the most money. TV contracts and most merchandising sales are generally fixed at the beginning of the season, only percentages of revenue are not set in stone. So, a good portion of the money the Yanks generated was set before the season, and payed through the season. Amount of concessions, merchandise, etc were obviously not known yet, but most people do anticipate that the Yankees do contend every year because of the big spending, which is done correctly, not like the Mets or Redskins spending is done.</p>