2012 Organizational Rankings: #1 – NY Yankees

Read the methodology behind the ratings here. Remember that the grading scale is 20-80 (50 representing league average) with extra weight given to 2012 and Revenue rankings.

2012 Organizational Rankings

#30 – Baltimore
#29 – Houston
#28 – Oakland
#27 – Pittsburgh
#26 – San Diego
#25 – Minnesota
#24 – Chicago AL
#23 – Seattle
#22 – Kansas City
#21 – Cleveland
#20 – New York NL
#19 – Los Angeles NL
#18 – Colorado
#17 — Miami
#16 — Diamondbacks
#15 — Cincinnati
#14 — Chicago NL
#13 — Milwaukee
#12 — San Francisco
#11 — Washington
#10 — Tampa Bay
#9 – Toronto
#8 – Atlanta
#7 – Detroit
#6 – St. Louis
#5 – Philadelphia
#4 — Anaheim
#3 — Texas
#2 — Boston

New York Yankees’ 2011 Ranking: #1

2012 Outlook: 69 (1st)

The Yankees are never going to be an overly efficient franchise. They’re well beyond the point of diminishing returns, as every additional dollar tacked onto the payroll brings less and less in terms of on-field production. That said, they are a winning machine and a powerhouse team that has become increasingly more well-run in recent years. Once top heavy, the roster is more well-rounded than at any point since the late-90s dynasty.

The headliners are unchanged. Alex Rodriguez and Derek Jeter are still the A-list celebrities in a lineup that went relatively unchanged after posting a 113 wRC+ last year, the second best mark in the game. Those two are no longer the key cogs, however. Robinson Cano and Curtis Granderson drive the offense with Mark Teixeira and Nick Swisher providing plenty of support. Russell Martin rediscovered his power stroke last year (with some help from his home park, obviously), and Brett Gardner provides the speed element the club lacked for the better part of a decade. Andruw Jones is arguably the best fourth outfielder in baseball, and Eduardo Nunez offers speed off the bench. Offensively, the Yankees can beat you with power or their legs.

After winning 97 games despite a questionable rotation last year, GM Brian Cashman went for broke this winter. Bartolo Colon and A.J. Burnett were replaced by Hiroki Kuroda and Michael Pineda. Freddy Garcia returns to the back of the rotation, as does Ivan Nova (88 ERA- and 96 FIP- as a rookie in 2011). Phil Hughes may or may not return to his 2010 form, but the Yankees are going to give the 25-year-old another shot anyway. Andy Pettitte got sick of sitting at home, so he came out of retirement and will step back into the rotation once he’s ready to go, tentatively scheduled for May. Then there’s CC Sabathia on top of all that, the rare example of pitcher getting better after a move into the AL East. Pineda’s shoulder-induced DL stint and Pettitte’s late signing take care of the seven pitchers for five spots thing, at least temporarily.

With a bullpen led by Mariano Rivera, Rafael Soriano, and David Robertson, the Yankees have a strikeout end-game trio that is arguably the best in baseball. Gardner provides elite defense while Swisher, Teixeira, A-Rod, and Cano rate no worse than average depending on which metric you prefer. They also have guys like Jack Cust, Jayson Nix, Dewayne Wise, Chris Dickerson, and Russell Branyan stashed away in Triple-A as emergency replacements. The Yankees are deep with bats and arms, both right-handed and left-handed.

2013+ Outlook: 61 (t-3rd)

Acquiring a pitcher of Pineda’s caliber is going to hurt, and the Yankees traded their best position player prospect arguably since Jeter to get him. Even without Jesus Montero, Marc Hulet ranked the team’s farm system as the tenth bast in the game. The top prospects are levels apart, with quality arms like LHP Manny Banuelos, RHP Dellin Betances, and RHP Adam Warren at Triple-A and high-end bats like 3B Dante Bichette Jr., C Gary Sanchez, and OF Mason Williams in the low minors. There’s not much between the two groups, but that upper level pitching depth will be useful either on the roster or in trades.

Those trades have become more focused in recent years as well. Because the whole “win at all costs” mentality isn’t well suited for watching young kids take their lumps, the Yankees have used a number of their best prospects to acquire “now” players over the last few years. Swisher was a heist that cost nothing of value, but they gave up Ian Kennedy, Phil Coke, and Austin Jackson to get Granderson. Pineda (and RHP Jose Campos) cost Montero and Hector Noesi. The ill-fated Javy Vazquez reunion sent Arodys Vizcaino, Melky Cabrera, and Mike Dunn packing.

Trading top prospects is nothing new for the Yankees, but they have gotten smarter about it. They’re no longer trading for big-name players on the downside of their career (think Raul Mondesi and Kevin Brown), they’re targeting players in their prime years with several seasons of contractual control remaining (think Granderson, Pineda, and Swisher). There’s no reason to expect Cashman to change course going forward, so that tenth ranked farm system is as much for the rest of baseball as it for the Yankees. Add in the under-30 guys already on the team like Cano, Pineda, Gardner, Hughes, and Nova, and the Yankees will remain competitive well into the future even as A-Rod, Jeter, Teixeira, and Sabathia succumb to age-related decline.

Financial Resources: 77 (1st)

Forbes estimates the franchise’s current value at $1.85 billion, easily the highest in the game. The YES Network generates huge revenue and is the regional network all others strive to be, although the Yankees technically only own ~33% of their flagship station. Over 3.6 million people walked through the turnstiles at three-year-old Yankee Stadium in 2011, the tenth consecutive year the Yankees ranked either first or second in total attendance. All that attendance means big concessions bucks, and the Yankees happen to control the majority of the concessions at their new stadium through Legends Hospitality Management, which they own along with the Dallas Cowboys. If that’s not enough, the club’s deal with WCBS AM is up after this season and their radio broadcast rights will be one of the most sought-after free agents on the market.

Most teams couldn’t dream of having a $189 million roster, but the Yankees are actually looking to shed $20-30 million off their payroll to get down to that number by 2014. If they manage to pull it off, they’ll get under the luxury tax threshold for the first time since the system was implemented in 2003. It’ll reset their tax rate (currently 40%) and also refund a portion of their annual revenue sharing payment thanks to the new Collective Bargaining Agreement. The Yankees paid more than $100 million to other clubs as part of the revenue sharing program back in 2010, so even a small-percentage rebate will be a bit more than chump change.

The Tri-State area — New York, New Jersey, Connecticut — is home to over 22 million people, by far the largest local market in baseball even when you consider that a significant (and unfortunate) portion of the locals support the Mets. The Yankees are a global brand and the interlocking NY is one of the most recognizable logos in the world. They’re a money-making machine; an unmatched financial giant thanks to ticket sales, concessions, the new stadium/shopping mall, and the YES Network. That 77 financial grade on the 20-80 scale might actually be a little light.

Baseball Operations: 64 (t-2nd)

Cashman is baseball’s third longest-tenured GM, but it hasn’t always been clear which moves were his and which came from over his head. The line has gotten a little less blurry in recent years, but every once in a while ownership will get trigger happy and spend lavishly on a Soriano-type. It’s in their blood.

The pro scouting department Cashman created prior to the 2006 season has been an unheralded piece of the club’s success, unearthing surprise contributors like Colon and Cory Wade. The statistical department led by Michael Fishman handles all the grunt work. The Yankees do still have some issues trusting their own prospects — they went through a period of being overly aggressive with promotions before becoming overly conservative — but they’ve streamlined the decision-making process at the big league level.

The number of knee-jerk reactionary moves has gone down in recent years while the number of well-informed decisions has risen. Cashman’s ultra-patient personality is a stark contrast to vintage George Steinbrenner, but the Yankees are always going to have some element of day-to-day chaos. The front office is smarter than it has been in the past, and that huge payroll sure helps cover up any mistakes.

Overall: 70 (1st)

Our methodology has changed but the results have not — the Yankees are still the class of baseball. They’re atop our organizational rankings for the third straight year, and you can argue that the current roster is the best they’ve fielded during that time. The revenue streams continue to be best in the game and the decision-making processes continue to be refined. Money doesn’t guarantee success in baseball, but it sure makes it a lot easier when you can afford the best talent available. Adding money to smart people is how you end up with one of the most valuable sports franchises in the world and baseball’s premier organization.