The Bronx Bombers are the most valuable team in baseball, and in large part because of the late George Steinbrenner’s moves, his heirs are billionaires.
The lasting image of the New York Yankees’ 2022 season will be members of the hated rival Houston Astros mobbing one another in celebration Sunday night on the Yankee Stadium infield after completing a pennant-winning four-game sweep. It was the third time since 2017 that the Yankees had fallen to the Astros in the American League Championship Series.
The humiliating defeat to their nemesis means the Yankees—the team with 27 championships, the most of any major league franchise—will miss the World Series for the 13th consecutive year. The last time the Bronx Bombers climbed Major League Baseball’s proverbial mountaintop was in 2009, when legendary owner George Steinbrenner was still at the helm. Although the drought weighs heavily, it has hardly dented the fortunes of Steinbrenner’s three surviving children. They’re all billionaires, and the team has never done better financially.
George Steinbrenner, at the time of his death 12 years ago, was worth $1.1 billion. Forbes estimates that siblings Hal Steinbrenner, Jessica Steinbrenner and Jennifer Steinbrenner Swindal each got one-fourth of George’s estate and are now each worth roughly $1.3 billion or more, primarily from the family’s controlling ownership of Yankee Global Enterprises (YGE). Hal’s assets also include a group of hotels, which would likely add another $100 million to his fortune. George’s eldest son, Hank, also got one-fourth but died in 2020, and it’s unclear what happened to his estate. Divorced, he was survived by his four children.
The Yankees are the most valuable baseball team at $6 billion. Since 1998, when Forbes started publishing sports team valuations, the Yankees have appreciated at a nearly 1,560% clip, well above the league average of 970% and the S&P 500’s performance of 180%. The team’s valuation is also up from $1.6 billion in 2010, the year George Steinbrenner died.
Only two teams in baseball spent more on their rosters than Hal Steinbrenner and the New York Yankees—the Los Angeles Dodgers and the New York Mets.
Adam Hunger/AP
The family has parlayed the success of YGE, founded in 1999, into success with other sports ventures. YGE owns more than 25% of the YES Network, which broadcasts games of the Yankees and other teams; 20% of New York City FC of Major League Soccer; and a stake in Legends Hospitality. In January, Forbes valued YGE at $6.81 billion, sixth among the world’s most valuable sports empires. That was before it took a reported 10% stake in RedBird Capital Partners’ $1.28 billion acquisition of Italian soccer club AC Milan.
“In the sports business, you don’t rise and thrive on your own,” says Martin Conway, a professor at the Georgetown University Sports Management Institute. “It’s a result of the assets around you, the market you’re in and the media, and what I think they’ve done successfully is leveraged their position in one of the, if not the, most important markets in the world economically.”
It all starts with George, who in 1973 led a 12-person group of investors that bought the Yankees from CBS. The price, $10 million in cash, was $3.2 million less than what CBS had spent to acquire the team nine years earlier. (The net cost ended up being $8.8 million after CBS bought back two parking garages included in the deal for $1.2 million.) Steinbrenner had built his initial fortune in the shipping business.
Although Steinbrenner had to serve a 15-month suspension from baseball starting in 1974 for making illegal campaign contributions, his impact on the Yankees came quickly. The team was back in the World Series three years into the new regime, and later won championships in 1977 and 1978. Steinbrenner signed stars like Catfish Hunter and Reggie Jackson, at exorbitant prices for that time, leading to criticism that the Yankees were buying championships.
Meanwhile, Steinbrenner’s big personality, fiery temper and commitment to winning brought notoriety to the club. He changed managers 20 times in his first 23 seasons—firing and rehiring Billy Martin five times—and went through 13 publicity directors in 26 years, according to Sports Illustrated. Conway, the Georgetown professor, who spent 15 years working in Major League Baseball, saw it firsthand. He recalls witnessing Steinbrenner and a small-market owner “argue nose to nose” at a meeting around 40 years ago over free-agent spending.
“It was like he was on a step ladder, no matter how big the other owner was,” Conway says. “Everybody who wanted to pick a fight with him had to look up.”
The Yankees’ early on-field success faded, and from 1982 to 1994, the club failed to qualify for the postseason. Controversy enveloped the franchise again after Steinbrenner was banned from day-to-day management in 1990 for shady business dealings. He was reinstated in 1993. But he had already laid the groundwork for the club to dominate financially over the next three decades.
In 1998, Madison Square Garden, which owned Cablevision, committed $486 million over 12 years for the Yankees’ regional broadcast rights, more than triple the previous mark. Steinbrenner in 1996 added a ten-year, $95 million sponsorship pact with Adidas that MLB tried to and failed to block, arguing that it violated baseball’s existing agreements. Steinbrenner later scorned a $600 million offer for the Yankees from MSG owner Charles Dolan and opted to create his own broadcast channel in partnership with the then-New Jersey Nets rather than sell away the media rights. All the while, the Yankees had returned to winning, collecting four championships from 1996 to 2000. In 2006, the club became the first in MLB to be valued at $1 billion.
While the Yankees were building a new stadium in the mid-2000s, Steinbrenner came up with a way to take another piece of the revenue pie. He joined forces with Dallas Cowboys owner Jerry Jones, who was also building a new stadium, to form Legends Hospitality in 2008, focused on event management and concessions. “I would do this on a handshake; we don’t even need to have paper,” Jones recalls Steinbrenner saying about the formation of Legends. The company has since expanded to other segments such as sponsorship, merchandising and technology. This year, private-equity firm Sixth Street purchased a majority stake that valued Legends at $1.35 billion.
Steinbrenner was 80 when he died of a heart attack. A temporary one-year repeal on the federal estate tax—the new rate of 55% would kick in on January 1, 2011—saved Steinbrenner’s kids an estimated $600 million, although it’s unclear how much of the fortune was divvied up into tax shelters.
Hank and Hal stepped in to run YGE, and today, it’s Hal’s baby. In the post-George era, the Yankees have been characterized by a “more peaceful, quiet and tranquil” regime, says Conway. That hasn’t stopped the club from keeping up its reputation as a big spender. In 2017, the Yankees acquired slugger Giancarlo Stanton and his 13-year, $325 million contract from the Miami Marlins. Two years later, the Yankees signed Gerrit Cole to a nine-year, $324 million deal, the richest ever for an MLB pitcher. But unlike in their father’s time, Hal’s Yankees have no pennants or world championships to show for that kind of outlay. By contrast, the most valuable player of the championship series just concluded was Astros rookie Jeremy Peña. His 2022 salary, according to Spotrac: $700,000.
George’s larger-than-life legacy still looms over the club. Forbes attributes $843 million of the team’s valuation to its brand, the leading mark in MLB. References to the Yankees have become commonplace in pop culture, such as in the lyrics of hip-hop artists Method Man, Jay-Z and the Beastie Boys. Steinbrenner’s persona also took on a life of its own. He hosted Saturday Night Live in 1990 and was parodied as a recurring character on Seinfeld.
Since George’s death, however, the romantic notion of the overbearing boss wanting to win so badly he’d make a fool of himself to do it has vanished from the Yankees. They may be the richest team, and their owners might be billionaires, but they’re just not that much different from everyone else in Major League Baseball. George had made them extraordinary. Now they’re not. Just ask the Astros.
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Source: https://www.forbes.com/sites/justinbirnbaum/2022/10/25/the-yankees-blew-it-again-but-the-steinbrenner-family-is-richer-than-ever-thanks-to-georges-legacy/