“Oh my God, I’m going to die next to George Steinbrenner,” Rob Manfred, Major League Baseball commissioner, said in a phone interview when asked about personal remembrances of one of baseball’s most colorful owners. By coincidence, the two of them were seated next to each other on a commercial flight from Tampa to New York in the late 1980s that was struck by lightning. Manfred calls it his most frightening experience ever on a plane. Yet even lightning was no match for The Boss.
It was 50 years ago this week that a Steinbrenner-led group bought the New York Yankees for $8.8 million from CBS. Today, 12 years after George’s death, the Yankees are worth $7 billion, including its related business interests, and $2 billion more than any other baseball team. They are the world’s third most valuable sports franchise, after the Dallas Cowboys ($7.64 billion) and Golden State Warriors ($7.56 billion).
“We plan absentee ownership as far as running the Yankees is concerned,” Steinbrenner said at his introductory press conference in 1973. “We’re not going to pretend we’re something we aren’t. I’ll stick to building ships.”
More famous last words have rarely been uttered.
Steinbrenner quickly put his hands on every aspect of the club, on and off the field. The Yankees won 22 of 29 American League pennants through 1964, but then endured seven straight years of finishing at least 15 games out of first place. In 1972, attendance dipped below 1 million for the first time since World War II. CBS had paid $13 million for the team in 1964 and became the rare sports team owner that exited at a lower sales price.
“The Steinbrenner family has preserved and enhanced one of the greatest brands in professional sports,” Manfred said. “They took a franchise that had had some lean years and restored it to the brand that stood for greatness.”
Steinbrenner bought the Bronx Bombers just ahead of free agency entering the sport, and he used the new tool to lure star free agents Reggie Jackson, Catfish Hunter and Goose Gossage to New York. “His good friend and one of his original limited partners, Jim Nederlander Sr., always told George, ‘Remember New York is a town of stars, and you always want to get the stars,’” Randy Levine, Yankees team president, said in a phone interview. “That impacted George, and why he used free agency to bring star power here.”
As the Yankees built a roster of marquee names and racked up World Series appearances, the finances of the club rebounded. Attendance topped 2 million in 1976 and rarely dipped below the mark again, including a record 4.3 million in 2008. “They have been consistent innovators on the business side,” Manfred said. Changes included a 12-year, $500 million TV deal signed with MSG in 1988. “It changed local broadcasting; nobody had ever seen anything like it,” Manfred said. In 1997, the club signed a 10-year deal with Adidas worth nearly $100 million that baseball originally tried to block. Manfred now calls it “groundbreaking.”
Levine was hired in 2000 to transition the Yankees from a strong baseball team and brand to a “sports and entertainment company.” The YES Network launched two years later, and while it was not the first regional sports network, it took the art of being an RSN to a “higher level,” per Manfred. The RSN model is hemorrhaging in many cities, due to cord-cutting, but the Yankees’ network generated an estimated $486 million in affiliate revenue last year, according to S&P Global Market Intelligence. That’s 56% more than the second biggest RSN, MSG Networks.
Ratings for Yankees games on YES rose 27% last year during Aaron Judge’s home run chase, and viewership was more than three times the typical RSN for MLB games. The Yankees currently own 26% of the network, and last year the team dabbled in a new streaming world with 21 games exclusively on Amazon Prime Video. The e-commerce giant bought a stake in the network in 2019. “It was the strength of the Yankee brand that attracted Amazon to doing that deal,” Manfred said. “Amazon being involved in baseball, whether it’s one team or 30 teams, is a good thing.”
The Yankees launched a hospitality company, Legends, in 2008 in conjunction with the Dallas Cowboys and owner Jerry Jones. Private equity firm Sixth Street bought a controlling stake in the venture two years ago that valued the company at $1.35 billion. In 2009, the opening of a new $1.5 billion Yankee Stadium spurred new revenue from premium seating and sponsorships. The Yankees consistently generate $150 million more in annual revenue than baseball’s next-best performer, the Los Angeles Dodgers.
“I’m willing to bet you that in 100 years, the Yankees will be here, and Apple won’t,” Sal Galatioto, longtime sports investment banker, said at Sportico‘s Invest in Sports Summit in October. “It’s a much better bet.” Galatioto was speaking about the ability of sports teams to endure technological and economic changes, as well as the strength of the Yankees brand when comparing the team to a company with a $2 trillion market cap.
The Yankees have built the most international baseball brand, with NY logoed hats in every corner of the globe. The signings of Hideki Matsui and Masahiro Tanaka helped establish the team in Asia. And when MLB decided to play its first European games in London in 2019, Manfred said, “It was an easy pick for us on who should go first, and they really delivered for us during that series.”
George Steinbrenner was in the crosshairs of MLB multiple times during his ownership tenure. He was suspended twice for a total of 39 months, first for illegal campaign contributions to Richard Nixon and then for hiring someone to dig up dirt on one of his players, Dave Winfield. MLB implemented policies like revenue sharing and a luxury tax to try and curb the Yankees’ financial advantages. “Did he love it? No,” said Manfred in reference to revenue sharing. “Did he go along with it? Yeah.” Manfred added that there has been “no more consistent supporter of industry initiatives” than Hal Steinbrenner, who has run the Yankees since 2008.
Manfred worked with MLB as an outside lawyer focused on labor issues for roughly a decade before joining the league full-time in 1998. He says George was convinced he was an accountant when they first met, because he was focused on economic matters. “I’m tired of hearing from that young accountant,” Steinbrenner used to say in reference to Manfred.
The Steinbrenner family are baseball’s longest tenured owners, with the Philadelphia Phillies’ group the next longest at 41 years. Today, Yankees Global Enterprises encompasses the baseball team, stakes in YES and Legends, a 20% share of New York City FC and dozens of other investments. The latest is a 10% interest in AC Milan, which RedBird Capital bought for $1.3 billion last year.
“It was one man’s force of personality and vision and commitment to restoring the Yankees’ greatness, and it worked,” Levine said. “I think George Steinbrenner is the greatest owner in the history of sports.”