George Steinbrenner and the Business of Winning
Steinbrenner purchased the Yankees for $10 million in 1973. When he died in 2010, the franchise was worth over $1.6 billion. His legacy is contradictory, but no owner in modern baseball history matched his results.
On January 3, 1973, a group led by George Steinbrenner purchased the New York Yankees from CBS for $10 million. At his introductory press conference, Steinbrenner said, "I won't be active in the day-to-day operation of the club." He was lying, and everyone in the room probably knew it.
Over the next 37 years, Steinbrenner transformed the Yankees from a declining franchise into the most valuable brand in American sports. When he bought the team, the Yankees had not won a World Series in a decade and were playing in a deteriorating Yankee Stadium. When he died on July 13, 2010, the franchise was worth over $1.6 billion.
Steinbrenner's approach was simple and expensive. He spent more money than anyone else. When free agency arrived after the 1975 season, Steinbrenner was the first owner to exploit it aggressively, signing Reggie Jackson, Catfish Hunter, and Goose Gossage. The Yankees won World Series titles in 1977 and 1978 and returned to dominance in the late 1990s, winning four championships in five years from 1996 to 2000.
His management style was chaotic. He hired and fired managers compulsively. Billy Martin was hired and fired five times. Steinbrenner publicly criticized his own players, demanded trades after bad games, and made personnel decisions based on emotion rather than analysis. His front office was a revolving door. The clubhouse was a pressure cooker.
He was also banned from baseball twice. In 1974, he pleaded guilty to making illegal contributions to Richard Nixon's reelection campaign and was suspended for two years. In 1990, Commissioner Fay Vincent banned him permanently for paying a small-time gambler $40,000 to dig up damaging information on Dave Winfield, with whom Steinbrenner was feuding over a charitable contribution. The permanent ban was later reduced to a suspension, and Steinbrenner was reinstated in 1993.
Steinbrenner's most lasting business innovation was the YES Network, which launched in 2002 as a regional sports network owned primarily by the Yankees. By controlling their own television distribution, the Yankees captured revenue that had previously gone to outside broadcasters. The YES Network became one of the most profitable regional sports networks in the country and gave the Yankees a financial advantage that other teams could not replicate without similar market size.
When Steinbrenner died, the Yankees had been to the playoffs 15 of the final 16 seasons of his ownership. The team was worth roughly 160 times what he had paid for it. His legacy is contradictory. He was a bully, a convicted felon, and a twice-banned owner who treated employees and players poorly. He was also the most successful owner in modern baseball history, and the franchise he built remains the standard against which every other team measures itself.