Note: In case there was any confusion, I recognize that this is firmly in Spoiled Yankees Fan territory.
Reactions to news that the Yankees desire to trim payroll by 2014 have resembled the Kübler-Ross model. First came denial: no way the Yankees would actually do this. They’re just setting a smokescreen. Then came anger: how can the Yankees trim their payroll while they raise ticket prices? That leaves three stages remaining: bargaining, depression, and acceptance. Let’s see if we can run though these in short order, so that we can prepare ourselves in case the Yankees actually do intend to duck the luxury tax cap in order to lower their payments once they re-cross the threshold.
The biggest issue with trimming payroll is that the Yankees need players to fill key spots. While they have all of their position players under contract for 2012, they could still use another starting pitcher. Nick Swisher then becomes a free agent after the 2012 season, leaving a spot in right field that the Yankees would be hard pressed to fill internally. These things cost money to fill.
Yet we still want the shiny toys. We want Yu Darvish this year, and we want Cole Hamels next year. We want a big bat to take over for Swisher in right — it was Matt Kemp previously, but surely fan desire will turn to another worthy candidate in time. Again, these players come with big price tags. It’s hard enough to fit them into a $210 million payroll, let alone a $188 million one. But we can make this work, right?
According to Joel Sherman’s original article on the payroll issue, the Yankees already have about $85 million committed to the 2014 payroll, at least as it concerns luxury tax. That covers Alex Rodriguez, Mark Teixeira, CC Sabathia, plus “about a $10 million charge for benefits, such as pensions.” Then there’s another possible $6 million if A-Rod hits his 714th homer in 2014; if he’s anywhere near that mark at the end of 2013 they have to assume that $6 million charge. That could conceivably put them at $91 million for three players.
Want to sign Robinson Cano to a long-term deal? That’ll likely mean a contract with an average annual value between $22 and $24 million. Even then, they’re covered at 3B (optimistically), 1B, 2B, and one starting pitcher. Derek Jeter could exercise his player option for $8 million. Brett Gardner will still be around, but won’t be cheap in his third year of arbitration. Ditto David Robertson. Jesus Montero, thankfully, will still make about a half million, which will soothe the payroll a bit. Ivan Nova will just hit his first year of arbitration, giving them another relatively cheap producer. That still leaves them with voids to fill in center field, right field, the bullpen and rotation, catcher or DH, and maybe shortstop. It’s a long list.
So where does that leave us? At a conservative $15 million estimate for Gardner, Robertson, and Nova, $23 million for Cano, and $8 million for Jeter, that brings us to $137 million. OK. That doesn’t look too bad. Counting Montero, that’s nine players. Surely they can sign the remaining 14 players for $50 million, right? Well, that depends on how you want to fill the spots. Want Darvish? That’s probably a $10 million AAV. Want Cole Hamels next off-season? That could be another $22 million. See how quickly that money gets spent? Even if they go with just Darvish, that still leaves them just $40 million for 13 spots, including two in the outfield.
That leads us to…
It does appear that the Yankees will have to scale back on spending at some point if they do intend to get to $189 million. The biggest obstacle is the money already on the books. That $91 million for three players puts the Yankees at a great handicap, since it represents essentially half of their available payroll. That leaves them with the same amount of money to sign the entire rest of the roster. Needless to say, that’s not an easy proposition.
Again, looking at the above back of the napkin calculation, the Yanks have 14 spots to fill for $50 million — and that assumes that Montero is the real deal and can either catch, or can hit well enough to remain at DH. But there are still those holes in the outfield, in the starting rotation, and in the bullpen. Sure, on the bench and in the bullpen they can probably get away with five or six guys making the league minimum, so that gives us eight spots to fill for $47 million. But even one high-priced pitcher changes that equation drastically.
That’s still do-able, in a way. If the Yankees can make use of six or seven guys making the minimum — and that can be guys such as Mason Williams and Manny Banuelos as starters, or guys such as Adam Warren, Brandon Laird, and Dellin Betances as reserves and bullpen arms — they’ll have a bit more flexibility. In fact, if they score a few key hits from the minors they very well could fall into this payroll range. No, that’s not the depressing part. The depression comes from the players already under contract.
In 2014 A-Rod will be 38, and turn 39 in July. Jeter will be 40 that June. Less troublesome are Teixeira at 34 and Sabathia at 33. No, the depression comes from the spots and money essentially guaranteed Rodriguez and Jeter. Maybe Jeter retires, though that opens up yet another spot without a viable replacement in the system. A-Rod, though, will make $26 million in 2014. What’s worse, Yanks fans had better hope he makes $32 million. He has 85 homers to go until he triggers his second home run milestone bonus, at 714. If he’s not poised to hit that milestone in 2014 it’ll mean he’s averaging fewer than 30 homers per year. For the money they’re paying him, the Yanks need that kind of production from Rodriguez. Yet given his injuries lately, it seems a longshot to think he’ll live up to that standard.
Is it going to suck watching the Yankees scale back their spending in the name of circumventing luxury tax payments? Absolutely. Will it mean they miss the playoffs a year or two? With the added Wild Card they’ll have a better chance of making it, but the competition in the AL has increased. The only fun that will come of this will be the chances they give prospects. If they’re not committing big money to additional positions, then they pretty much have to give the kids a shot.
The only thing to do at this point is accept it. The Yankees have these three huge contracts on the books, and nothing they can do will reduce their current 2014 luxury tax level. If the Steinbrenners really do want to save the luxury tax money, there’s nothing we can do to stop them. They know the repercussions of putting a subpar product on the field, and they know the consequences of missing the playoffs. We can only trust that they’ll make decisions with that knowledge in mind.
Bonus: Denial Again!
But seriously. With the three-team scrum in the AL East, combined with the enormous incentive to win the division, the Yanks can’t be serious about trimming payroll, right?