Strangle and Hug.

So the aforementioned 7-point response has caused quite the conversation. (the points are included) Its one of those conversations where in the core of your "being" you know the other person must just be misguided and that when it comes down to it they just don't know. The issue is that "they" are making sense, and have valid points but in the end they are just wrong. These conversations are what keep people up at night strategizing on how to enlighten the other, thinking about how to finally convince them. It's an intelligent, quick discussion...so I hope everyone can keep up!

1. The Yankees are not solely responsible for running-up prices and causing this overall 'lack of loyalty.' I mean free agency has been in effect for over 30 years and lots of teams have thrown money around. Who gave ARod $250M? Who signed Gil Meche (Gil Meche!!) for $11M/year? Not the Yankees. Who gave Barry Zito $126M? Not the Yankees.
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Is this where the line to congratulate the Yankees for not offering the two worst contracts of this last off-season starts? Or did the movement disband when they gave Roger Clemens 17.4mm for 20 starts of almost exactly league-average pitching?

Obviously the Yankees aren't the only team with horrendous spending habits, and along with the Red Sox I'm happy to give them a gold star for actually doing it and winning once and awhile, unlike some fairly recent incarnations of the Mets and Cubs and Rangers. That said, the Yankees aren't just at the head of the class when it comes to this irresponsibility. They own the classroom and the school. It's rather telling that your friend couldn't pick three enormous contracts without including one that naturally found its way to the Bronx. New York is the place where horrific, burdensome contracts go to die: Rodriguez, Abreu, Randy Johnson, Kevin Brown.

The problem isn't that the Yankees make players disloyal, or even that they spend more than other teams. It's that the spend so much more than other teams that their mistakes are completely irrelevant budget-wise. Any remotely responsible team would have been crippled by giving Carl Pavano 39.95mm over 4 years with a return of 111 innings over the first THREE seasons of the contract. The Yankees response to what would be a huge millstone around any budgetary neck has been... atypical: finding more expensive, less insurable pitchers to fill the gap, like Andy Pettitte and Roger Clemens.

A less dramatic example is the recent weirdness with Johnny Damon. After winning the bidding for the player Scott Boras billed as "better than Rickey Henderson" with a comparatively modest and non-escalating 4y/52mm, they discovered just a year and a half into the deal that he can't really play centerfield that well anymore and is kind of falling apart. But what would have been a disaster for most other teams turned into a stroke of luck for the Yankees: Jason Giambi, who is owed 42mm (yeah, you read that right) over '07-'08 with a 22mm club option for 2009 (the Yankees have a 5mm buyout on this) can't stay healthy or field a position either. So, Damon and his 93 OPS+ is available to take over the "position" of DH that Giambi isn't often physically capable of filling. So the Yankees are paying a total of 34 million dollars to fill their DH need at below league-average offense.

Spending money for elite talent doesn't bother me. Guys like Jeter, Rodriguez, etc. are generational talents who should be retained at almost any cost for a winning team. Choosing to spend money on players like this would be bold and aggressive, and I don't believe the contracts for HOF-calibre players really has any great effect on the market. Aramis Ramirez had a comparable 2006 to Alex Rodriguez, but it didn't get him ARod money when he opted out of his current contract. The problem, however, is that the Yankees don't stop at bold and aggressive. They spend their money like a bludgeon, raising the rates on production that is either mediocre (Damon) or uncertain (Pavano). Pointing out that other owners are billionaires and theoretically can keep up with the Yankees misses the point: that they shouldn't keep up with the Yankees.
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(in response) My larger point on the worst of the off-season contracts is completely missed. If the Royals pay Gil Meche, an average pitcher at best, $11M per year then how much will a pitcher with nearly 200 victories (and, I might add, a product of the Yankee farm system) Andy Pettitte going to demand? Or a hall of famer like Clemens? So, because the Yankees look to fill holds on the staff with reliable arms for the year, they need to overpay because the Royals are a moronic franchise. That leads to the overall larger expense
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2. The Yankees have paid the other 29 teams $100M in luxury tax and revenue sharing money. That's over $3M on average, per team. So, they pay for their excesses more than any other franchise on the planet. What do most owners do with this money? Pocket it. Can anyone make a serious argument that owners couldn't afford to take this money and pay a draft pick an extra $500K not to go to college? Seriously?
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This is an even stranger attempt to reframe the conversation in order to make the Yankees' behavior look prudent, since New York only somewhat recently decided that their consistent waste of money should also be applied to the amateur draft and international scouting. I refuse to argue along the lines that wasting money should be standard, preferable practice. A half-million dollars for an 18 year old player with no real certainty of even making an MLB roster is a ton of money. Refusing to pay above slot isn't cheap, it's smart.

It's also not entirely correct to suggest that the Yankees are throwing money at HS draftees. Dellin Betances was their only prep pick in the first 10 rounds of the 2006 draft. With the exception of Betances and Hughes, most of their prep picks in the last few years have sort of languished. CJ Henry has been the most useful prep 1st rounder (until Hughes gets his feet set at the MLB level) since he managed to net Abreu - a return that, as far as I can discern was appealing simply so Gillick could tell people Henry was a 1st rounder. They went with a few prep position players in the 2007 draft, but the pick that most defined this recent draft and their draft strategy of late was Andrew Brackman at #30. Brackman will end up being signed for above-slot money, in spite of regressing in K/9 for his junior year and having basically no leverage due to injury problems. All because he's really tall.

This isn't an example MLB teams need to be following.

Besides, the "pocketing the luxury tax" argument only really applies to a couple teams, like the Pirates and the Royals. I don't have much trouble lumping them in with the Yankees as far as "things that are wrong with baseball's financial structure". I'm perfectly comfortable disliking both ends of the spectrum equally.
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(in response) Also, keep in mind the Yankees’ longer term strategy with the pitching staff. The contracts signed by Pettitte, Mussina, and Clemens are all short term…1 or 2 years. By 2009 the rotation will largely be made-up of prospects developed within the organization. Which leads to my next point…

Overpaying at draft slots is not sound? The Yankees do it not only for prep players like Betances. Look at the players every team has asked the Yankees for this year in trade deals: Ian Kennedy, Joba Chamberlain, and Alan Horne. All college players drafted in the last few years…all top shelf prospects that are projected to have good major league careers. Because they’re not quite up to the Bronx yet doesn’t make them bad investments. And, by the way, why was Kennedy available where the Yankees picked, late in the first round? Injury concerns during his last season at USC. So, the point about Brackman is valid, he certainly may end up being a reach. But, for a guy that throws that hard is it not worth a risk at pick 30? I mean if the Yankees had the top pick this is a different conversation. Not taking into account their draft status when making that point causes you to miss the point. The Yankees are strategic in how they go about making-up for their lack of draft position each year.

This all gets me to my point in noting the Yankees are richer than everyone else is not born of arrogance. I’m trying to make the point that good baseball decisions end up leading to championships, period…rich teams or poor teams. I don’t buy the argument that the Yankees have good pitching prospects simply because they’re rich. They have good pitching prospects because they make good decisions on who to draft and where to draft them. Same thing with their latest dynasty. Built from free agency? Partly. However, does anyone think the Yankees would have won any of those titles with Pettitte, Rivera, Jeter, or Posada? I don’t. The Yankees built a solid core of players and used the rest of their prospects to land the other pieces of the puzzle.

The next argument that usually gets thrown around is that the Yankees spend more on scouting than other teams. Likely yes overall. But by how much? How many teams scouted and could have drafted Hughes, Kennedy, or Chamberlain…lots. If other teams are dedicated to ‘building from within’ then shouldn’t their scouting department be getting the bulk of the investment dollars (as Stan Kasten has recently done with Washington, building off the model he used in Atlanta)? At some point the fact that the owners have resources to spend IS valid. They don’t want to spend on salaries like the Yankees? Fine. Where IS the money going? Teams that don’t spend money on their major league roster (I think that extends beyond Pitts. And KC) are also largely guilty of not investing in player development.

The points about the Damon and Giambi contracts are certainly valid. I would add that part of Johnny’s lack of playing time in center is also because the Yankees have a budding, 23 year old star in CF in Melky Cabrera that was developed through the farm system.

To the last point about overpaying 18 year olds. I agree that the draft is a gamble. But saying that it’s not smart to overpay because a player may not make it, to a degree, misses the point. That’s the nature of all drafts in all sports. At some point, you NEED to take chances on players. Can someone say for sure that when the Twins signed Rod Carew as an 18 year old he’d be a hall of famer? I’m sure not, but he was signed anyway.