2013 Payroll Breakdown: Part One

October 28, 2012 by Mike Axisa 63 Comments

The Yankees intend to get under the $189M luxury tax threshold by 2014, and they’re going to have to starting taking action this offseason to make sure that happens. Throughout the winter we’ll check in on the club’s payroll situation as they make roster moves to see how they’re setup for 2013 and potentially 2014 as well. Free agency will open sometime soon depending on the length of the World Series (it’ll start no later than ten days from now no matter what), so let’s first look at the money the Yankees have coming off the books this winter. It’s not a small amount.

Pending Free Agents ($76.14M): Mariano Rivera ($15M), Rafael Soriano ($14M), Nick Swisher ($10.25M), Hiroki Kuroda ($10M), Russell Martin ($7.5M), Freddy Garcia ($4M), Pedro Feliciano ($3.75M), Andruw Jones ($2.54M), Andy Pettitte ($2.5M), Raul Ibanez ($2.5M), Ichiro Suzuki ($2.25M), Eric Chavez ($1.85M)
Scheduled Raises ($3M): Curtis Granderson (+$5M), Robinson Cano (+$1M), Derek Jeter ($+1M), Alex Rodriguez (-$1M), A.J. Burnett (-$3M)
Buyouts ($0.50M): Feliciano ($0.50M)

I’m assuming Soriano will opt-out of his contract, which seems likely. The Yankees will pay $8.5M of Burnett’s salary next year after paying $11.5M last year, so that’s cool. Feliciano has a $500k buyout coming to him as well. Put it all together — (Pending Free Agents) minus (Scheduled Raises) minus (Dead Money & Buyouts) — and the club will have approximately $72.64M coming off the books this offseason. I’m ignoring minimum salary pickups like Derek Lowe, because who cares about guys making the minimum.

Anyway, I count nine arbitration-eligible players this offseason: Phil Hughes, Brett Gardner, David Robertson, Joba Chamberlain, Boone Logan, Jayson Nix, Casey McGehee, Frankie Cervelli, and Chris Dickerson. Dickerson and Cervelli are on the Super Two bubble, so they might fall short. McGehee seems like a safe bet to either be non-tendered or traded, clearing his salary. Hughes, Robertson, and Logan are due considerable raises (relative to last year’s salary) while Joba and Gardner will get slightly smaller raised due to their injuries. This will be expensive class though, probably an increase of $10M or so compared to last year. Suddenly that $72.64M becomes $62.64M. Once MLBTR posts their salary projections we’ll have a much better idea of the arbitration situation.

With that money, the Yankees will need to find a catcher, a right fielder, a DH, a late-inning reliever, at least one starting pitcher (preferably two), a bench, and miscellaneous depth players. That’s assuming they’re willing to spend as much in 2013 as they did in 2012. It is more than enough money, but Brian Cashman & Co. will need to find payroll-friendly solutions if they’re going to stick to this 2014 payroll plan. Either that or they’re going to be signing a bunch of players to one-year contracts, which isn’t necessarily a bad thing. I’d love to see both Kuroda and Pettitte on one-year pacts, that would be my ideal starting pitching solution.

As the offseason progresses and players to start to sign — both free agents and arbitration guys — we’ll have a better idea of what the Yankees will spend in 2013 compared to 2012. I think this will be the team’s busiest offseason since 2008-2009 (it probably won’t even be all that close when it’s all said and done), but it’ll be interesting to see how the Yankees plug those holes given what appears to be an utter lack of viable alternatives. This might be a winter heavy on trades and not free agent signings.

Austin Aunelowitzky

Is Part Two going to be Yankees available trade chips?
Bavarian Yankee

Cano’s and Jeter’s raises should be “unimportant” when it comes to the payroll because that’ll be the same as last year right (AAV)!?
But what about Granderson’s bonus for his MVP voting? Does that count against he payroll? A-Rod’s HR bonuses don’t count against he payroll if my memory serves me right.

If (some) bonuses don’t count anyway, why don’t teams (especially the Yankees) exploit that more?

How does it work exactly when it comes to the payroll with players like Burnett?
- Bavarian Yankee
  
  edit: forget what I said about Cano, somehow I forgot that it’s a club option.
- DC
  
  MLB will no longer allow bonuses like Arod’s to be excluded from the luxury tax calculations. They did that after the Pujols’ contract.
  
  In AJ’s situation, I believe only the actual cash amount still on the Yankee’s payroll counts toward the luxury tax.
- Need Pitching & Hitting
  
  Bonuses do count for luxury tax purposes. They just don’t count towards AAV, they only count in the year in which they are earned.
The Moral Majority is Neither

The Yankees should overpay on one-year deals to Torii Hunter, Kuroda, Martin (who might otherwise get two-year deals) and bring back Rivera, Pettitte and Ichiro.

This would inflate 2013 payroll but give them a chance to go for it this year with players they otherwise wouldn’t get while maintaining flexibility for 2014.

An outfield of Granderson, Hunter, Gardner and Ichiro is good and a rotation of Sabathia, Pettitte, Kuroda, Hughes, Nova, Phelps will work.

During 2013 the landscape will change in terms of prospect progress, player trade value, availability of other players, so this would buy them some time with a team good enough to win.
- jjyank
  
  Yeah, I think this is the right course of action, unless Cashman can swing a trade for a younger, cost controlled player. Overpay for 2013-only contracts, and hope a couple prospects take a few steps forward. I’m starting to really warm to the idea of Hunter. Even though he’s 37, he’s still productive. If he will take a one year deal and switch coasts, I’m all for it.
- Mike HC
  
  I mentioned this in an earlier thread, but the goal of the 2014 budget is to make more money. If you are going to overpay this year, just to save money next year, it is counterproductive.
  
  I agree they should be looking at one year deals, but I don’t agree that they should overpay guys on one year deals.
  - jjyank
    
    If I understand correctly, the goal of the 2014 budget is to save money over a period of several years, though. It’s not like overpaying on a couple of one year 2013 deals will completely negate that. I mean, if you want to look at it as 100% a business, then sure, spending big on 2013 cuts into the overall profit margin.
    
    However, I think the Yanks would still be saving more money in 2014 and beyond than they would be spending extra in 2013. My point being, I don’t think throwing a couple extra million at guys like Hunter, Kuroda, Martin, etc. is much of a disincentive if they can field a competitive team and still get under the budget the following year.
    - Mike HC
      
      I get what you are saying. But those “a couple extra million” add up, and might be more than just a couple million if you are trying to persuade guys to take 1 year deals rather than 2 or even 3 year deals. It would leave us with what, like a 225-230 mil payroll for this year, and little future planning for when they have to drop like 30-40 mil in just one off season. It just doesn’t strike me as the best of strategies.
      - jjyank
        
        See, I think this actually helps with future planning. Getting guys on 1 year deals allows the Yankees another year to explore trades for cost controlled players and see how the farm system shakes out. I think it’s in the realm of possibility that the Yankees overpay a bit for Hunter (just as an example) and Tyler Austin happens to take a huge step forward and has already experienced success at AAA. Now in 2014, the Yankees have a shot at going cheap for RF.
        
        That’s just a hypothetical, but I see a lot of merit in one year deals to buy some time for the farm system and see if the trade landscape changes.
        
        Mike HC
        
        I didn’t think any of our position prospects were realistic options for 2014 short of an epic rise. Austin has 7 at bats in AA. He has a ways to go.
        
        jjyank
        
        Oh I know. I’m just saying that it’s a possibility for mid-2014 or beyond. Or, if a prospect takes a huge step forward, their trade value rises, and they get shipped out for a more MLB-ready player.
        
        My point isn’t “Tyler Austin 2014!”, just that rolling with 1 year deals (even if you need to overpay) buys the team time to see how the farm system plays out and work on long-term oriented trades.
        
        Mike HC
        
        I got you and I’m just trying to start conversation more than anything. Neither of us have any say in the decision! ha
        
        Just looking forward though, our outfield would be Gardner under team control, and then Granderson, Ichiro and Hunter all on one year deals. Our catcher and second baseman also on one year deals. So after next season, all of a sudden we have nobody but Gardner left in the outfield, openings at second and catcher, a constrictive budget we want to get under, and really no outfield prospects realistically ready to play short of a low percentage chance somebody explodes and skips a level of the minors. Only ARod, Jeter, Tex and Gardner would be under contract. It just doesn’t sound like a great position to put ourselves in.
        
        jjyank
        
        You’re right, it’s definitely not ideal. Hopefully a David Adams or a CoJo type can take a step forward.
        
        I just don’t see a free agent market that is really worthy of being part of the long term plans. Maybe they bring Swisher back, I’d be fine with that if he won’t be too expensive. But other than him, you’re mostly looking at one year stop-gap types.
        
        The Yankees have quite a bit of talent in the lower minors. 2013 will be a very important year for the farm, perhaps more so than in a long time, given the context.
        
        Ted Nelson
        
        It will take luck, but nothing epic. AA to MLB in a year by 22 is not really epic.
  - The Moral Majority is Neither
    
    The goal of the 2014 budget is to save serious money (on top of the money they save with the 2014 budget itself). But the risk of this plan is losing money and/or missing out on a chance to win with players on a very small window (Rivera, Jeter, Pettitte, Sabathia’s prime).
    
    If they can figure out a plan that allows them to compete for a World Series in 2013 and make the 2014 budget without overspending, I’m all for it. I just think overspending in 2013 gives them a better chance of achieving both.
    - Mike HC
      
      The plan is to get under the 189 target and still be a contender. I don’t think selling out for this season, and then leaving the team in 2014 in an even worse position than they would be if they started making moves with continuing to be good in 2014 and beyond in mind. You are looking at it more like, in 2014 we are already fucked with the budget, might as well go all in this year. I get the strategy, it is just not one I would use.
      - The Moral Majority is Neither
        
        I understand that the plan is to contend in 2013 AND contend in 2014 within budget. I just think that finding those pieces to pull this off will be very difficult and that the pieces we need to contend in 2013 are likely to be different than the pieces we need to contend in 2014 and going forward.
        
        For example, overpaying for one year of Russell Martin gives them a year to see what Romine might be and how Sanchez/Murphy look and what catchers are going to be on the market, etc.
        
        Finding cost-effective longer-term solutions at catcher, in the outfield and rotation is a lot of work for a single offseason. Buying a year of time as a contender with flexibility going forward can help the process, so it wouldn’t be giving up on 2014.
  - Ted Nelson
    
    They’re going to save serious, serious money if they stay under in 2014 and 15. They probably won’t even match last year’s payroll if they spend “big” on guys like Hunter and Kuroda.
- Need Pitching & Hitting
  
  Instead of trying to get two year deal players to accept one-year deals, they might be better served using a one year deal with an option and a big buyout.
  Hypothetical example: if Kuroda could get 2/25M. Offer something like $15M for the first year with a second year team option for $10M with a $5M buyout. That way if they pick up the option, he would still end up with 2/25M, but for luxury tax purposes, he would count for $20M in 2013, but only $5M in 2014. This way he could help in both years.
  If they declined the option, Kuroda will essentially end up with $20M for one year, so he wouldn’t really lose much.
thehughesunit

Pirates paid $5 million of Burnett’s money last year and now pay $8 million of it this year. So it’s not money added on, it’s money taken off.
- Steve (different one)
  
  Beat me to it…
  - JobaWockeeZ
    
    Mike put a negative sign next to Burnett so I’m not seeing the confusion here.
    - Steve (different one)
      
      The confusion is that I can’t read.
      - Deep Thoughts
        
        You can read all right; he had it the other way then corrected it.
Andrew Brotherton

I would guess that it would be Kuroda, Pettitte, Ichiro, and Martin. Martin for 1yr for 8, or 2 for 16, Kuroda for 1yr 12 million, and Pettite for 1yr 8 million, Ichiro for 1yr 5 million. That would be two starting pitchers, a catcher, and a right fielder. Your late inning reliever can come from within, unless we wanted to take a 2 to 3 million dollar chance on Soria or Madson. We have the depth to live without them and manage but it could be worth the gamble. We would have a balance of 20 to 23 million less than last year in my scenario to work with. Your buy low candidate for DH would be Carlos Pena, Ibanez, or Hafner or another option would be to trade for Kendry Morales. I think we could field a very competitive team and still save 10 to 15 million from last year.
The Moral Majority is Neither

Why are we trying to save money in 2013? This is like the year before the draft/international spending limits.

If the team can afford to spend $400M in 2013 and 2014 then they should be ok spending $211M in 2013 and then $189M in 2014 if it increases their ability to win.

The 2014 mandate is for accounting benefits, not an actual ability to spend.
- Ted Nelson
  
  What business wastes money now because they can’t spend it later?
viridiana

Not sure why we’re discussing an economy budget for this year. Nobody has said anything (that I’m aware of) about budget constraints in 2013. Of course, we can’t take on contracts that would affect 2014. So yes, one year deals will be the way to go.
I think another resource is in extensions. By extending Hughes, for example, you can pay him more in 2013 than he’d get thru arbitration. This could convince him to take a more reasonable deal for say three years. He might lose a tad in 14-15 but gain quite a bit next year. Meanwhile, he gets the security of not having to worry abut injury this year.
With Joba, economies could be greater yet as he has lesser arbitration prospects. Might not be a bad idea to lock up Joba for 2 or 3 years. These two would be my top extension candidates. Locking up Joba and Phil would really help going forwrd in many ways (assuming of course they’re healthy and return to reasonable productivity).
- Francesa
  
  Average Annual Value. Remember those words.
  - Hugh
    
    I think that Viridiana is saying that Hughes might be extended now for two or three years at an AAV over those years less than he might command on a FA contract this time next year.
    - viridiana
      
      Yes, that’s right Hugh.
      
      And there’s another reason an extension would make sense to all parties. Hughes earned $3.2 mill last year. In arbitration, he might get a nice raise — let’s say a near doubling to $6 million. But if he signs a three year deal now for say 3/$30m, he’s suddenly making $10 mill next year, as well as the two following years. (Or he can look at it as $6m in 13 and then $12 mill each of the following years. Either way, it would seem to be a pretty enticing inducement for Phil. For the Yanks, the AAV is $10 m which I would guess is a pretty good deal for a #3 pitcher. On the open market Yanks might have to pay more. (Maybe the magic number is less than 3/30m, but the logic of the deal for both sides holds).
      An expiring contract allows you to pay a little more the first year than the player would otherwise get. And with the Yanks situation– able to spend a bit more in 13 but required to cut back in 14 — it makes excellent sense too.
      - toad
        
        Yes. And Hughes might be able to squeeze out an extra dollar or two by being cooperative. There’s room for some mutual benefit here.
- Ted Nelson
  
  Not sure that I’d extend Hughes right now. Doubt he and the Yankees would see eye-to-eye on his value. Dude is a 4th or 5th starter right now, and might prefer to boost his stock next year to get free agent money.
http://Riveraveblues Austinmac

One year contracts mean old, unwanted players. Yes, that’s the way to get better.
- jjyank
  
  2012 Kuroda, Pettitte, Ibanez, and Chavez would like a word with you.
  - Get Phelps Up
    
    Haven’t you learned? Old = bad. End of story.
    - jjyank
      
      End of story? That’s weak man. It’s supposed to be more like “Period!” or “CRIMINAL!”
- Steve (different one)
  
  Edwin Jackson, Cody Ross, Ryan madson, Adrian Beltre (2011), etc
  
  There are also trades for younger guys with one year left on their contract.
- JobaWockeeZ
  
  One year deals are better than 3, 4 or 5 year deals which we used to do so I’ll gladly take one year.
- Robinson Tilapia (never missed an opportunity to namedrop Chuck Cary)
  
  One year contracts mean guys that hold down the fort until your precious youngsters are actually ready to play in the majors.
Magilla Gorilla Mama Called me Roy tho

Mike, you sure that the Feliciano buyout is only $500?
Hugh

You choose Bavarian Yankee as a monikor, use the terminology you did in a message viewable by the whole world and then get touchy about a comparison with Delmon Young.

Frankly, I think Delmon’s the one who might get upset.
- Hugh
  
  Oops – this was a reply to Bavarian Yankee above. Will repost as such now. Sorry.
  - Hugh
    
    Or I would do if the message was still there. Guess Mike took the same view I did.
    - jjyank
      
      I saw it. Looks like someone just hijacked his handle. Impersonators get pretty quick bans.
mt

Soriano has $1.5 million buyout ifhe opts out.
dan2

Get to 2014 as early as possible.
Trade Grandy for a catcher and prospect
Sign FA BJ Upton
Upton in left, Gardner in center and Ichiro in right
sign Mo or Soriano if Mo does not sign
Good bye to Andru, Ibanez, Chavez, Stewart, Lowe and all other oldies
Since Cervelli is signed, make him the back up
Sign either Andy or Kuroda but not both. Leave a spot to develop a young pitcher.
Mo, Robertson, Joba, Logan, Aardsma is the start of a very good bullpen. Fill in as necessary with youth.

Payroll under control and younger legs in key spots. Not even going to talk about jeter as DH for about 100 games.
- jjyank
  
  I don’t disagree with much of this necessarily, but there are a few problems with this logic. It’s really easy to type on the internet “trade Granderson for a catcher”. But I hope you realize that this probably won’t happen. Also “leave that spot to develop a young pitcher”. Who? Warren? So you’d be cool with a rotation of CC, Andy/Kuroda, Hughes, Nova, Warren? I wouldn’t.
  - Ted Nelson
    
    I think dan2 is way, way off base (don’t sign oldies, but sign Pettitte or Kuroda and convince Mo not to retire… the irony is awesome… and BJ Upton? Really?), but Phelps is the guy before Warren.
- Get Phelps Up
  
  They’ll still have a spot to “develop a young pitcher” even if they sign both Andy and Kuroda – CC, Kuroda, Pettitte and Hughes are your top 4, while the 5th is a competition between Nova, Pehlps, Warren, etc.
- Steve (different one)
  
  These moves are all reasonable, but I would sign both Andy and Kuroda. If we’ve learned nothing else, there will still be innings for a young pitcher at some point.
  - JobaWockeeZ
    
    Or that our young pitchers aren’t likely to be anything more than average. Pettitte and Kuroda are needs.
    - Robinson Tilapia (never missed an opportunity to namedrop Chuck Cary)
      
      You’re both correct here.
  - Ted Nelson
    
    Signing Upton to a big free agent contract at $15+ mill per is reasonable.
cashmoney

I get the idea that one year deal is what Cash and Co. are looking for or at..I think Kuroda might want a 2 year deal but it would not surprise that both him and P settle for one with the Yanks, that is, if P is not retiring again. undervalue bargains is what i think Yanks will be looking at. Melkman for example. but overall, realistically, I don’t see NYY acquiring any long and expensive contracts in 13.
j

Shin All Choo may be on the market. Should be realitively cheap given that he only has one year left on his contract.
Now Batting

One year, $40 million deals for Hamilton, Swish, and Greinke.

Lets video game this s***
Duh Innings

Let go of or trade / Money cleared

Granderson (trade)/ $15M
Soriano / $12.5M
Swisher / $10.25M unless he a year and $13.3M or two years at $10.25M a year if he rejects the one-year offer
Rivera / $10M if they could get him to re-sign for a year and $5M
Martin / $7.5M
Garcia / $4M
Feliciano / $3.75M
Jones / $2.54M
Ibanez / $2.5M
Suzuki / $2.25M

Total cleared: $70.29M – 2M raises to Cano and Jeter =
$68.29M + $4M less paid to A-Rod and Burnett =
$72.29M

C – A.J. Pierzynski $7.5M for 2013 only
LF – Melky Cabrera $7M for 2013 only
CF – Gardner $0.5M raise?
RF – Torii Hunter $10.25M for 2013 only or Swisher for $10.25M (first of two years at $10.25M per year)
IF – Chavez re-signed for $2.35M ($0.5M raise) and 2013 only
OF – Ibanez re-signed for $2.5M (what he made in 2012) and 2013 only
SP – Kuroda re-signed for $13.3M ($3.3M raise) and 2013 only
SP – Pettitte re-signed for $5M (double his 2012 salary and so he makes as much as Rivera)
RP – Rivera $5M (down from $15M – he still makes $20M for 2011-12)

$35.9M left over for raises to Robertson, Hughes, Chamberlain, Logan, Nix, McGehee, Cervelli, and Dickerson.

I’d try to get Jake Peavy for a year and $14M so he makes $18M total for 2013 ($14M plus $4M buyout) so he’d still be only 32 at contract’s end. If he has a solid 2013 he would most likely get a four-year minimum $14M a year payday.

2013 Yankees by part of the team:

Rotation: Sabathia/Peavy/Kuroda/Hughes/Pettitte

Bullpen: Rivera/Robertson/Logan/Rapada/Chamberlain/Aardsma/Eppley

Bench: Stewart/Nix/Chavez/Ibanez

Starting Nine/Batting Order:

Jeter SS
Melky Cabrera LF
Cano 2B
Teixiera 1B
Hunter RF
Pierzynski C
Rodriguez 3B
Ibanez DH
Gardner CF
Nick Hall

How about this scenario. Let Swisher walk and bring back Melky Cabrera. Melky’s PED test sucks, but it also lowered his asking price significantly. He would be cheaper than Swisher and would still provide solid production. You could move Granderson over to right and put the Melk man in center and bat him 2nd behind Jeter.
Ted Nelson

They’ve got like 3.5 full spots to fill (RF, C, SP, CL) for $60 million… There seem to be few spots to fill and tons of options.
Ro

Thanks for posting this. I’ve been waiting to see what’s what in terms of commitments for next year.