Thursday Links: Severino, Wearable Technology, Payroll

Sevy. (Presswire)
Sevy. (Presswire)

The Yankees and Blue Jays wrap up their three-game series with the rubber game in Toronto tonight. After that, the Yankees return home for a nine-game homestand against the Mariners, Athletics, and Rays. They’re seeing the M’s and A’s early this year, huh? Well, anyway, here are some stray links and notes.

Severino changes agents

According to Jerry Crasnick, young right-hander Luis Severino recently switched agents. He left the Beverly Hills Sports Council and is now represented by Paul Kinzer of REP1 Baseball. Kinzer is no small time agent. He represents Starlin Castro, Edwin Encarnacion, Geovany Soto, and Jhoulys Chacin, among others. Aramis Ramirez and Rafael Furcal were Kinzer clients during their playing days as well.

For what it’s worth, Kinzer clients do have a history of signing long-term extensions before reaching free agency. Both Castro and Encarnacion jumped at the security of a long-term deal early in their careers, for example. Severino did not receive a big signing bonus as an amateur ($225,000), so he could be open to signing an extension and locking in that big payday. What kind of contract would it take? That’s a topic worth it’s own post.

MLB approves “wearable technology”

The rules committee has approved two forms of “wearable technology” for this season, reports Ronald Blum. Players are now allowed to wear the Motus Baseball Sleeve, which measures the stress on elbows, and the Zephyr Bioharness, which measures heart and breathing rates. Here’s more from Blum:

Data from the devices cannot be transmitted during games but must been downloaded afterward … Clubs may use the data only for internal purposes, and it will be shared with the player. It cannot be provided to broadcasters or used for commercial purposes. Players can decide whether or not to use the technology and determine who can receive the data.

MLB and the MLBPA still haven’t made an official announcement for whatever reason. The MLBPA has some concerns about privacy — “The next thing you know, the pitcher’s going to have a phone in his pocket taking selfies,” said Brett Gardner to Blum — and wearable technology will again be reviewed as part of the upcoming Collective Bargaining Agreement talks.

This all sounds pretty great to me, especially the sleeve that measures all the different stresses on a player’s elbow. Anything that can help detect and possibly prevent injuries is a-okay in my book. Then again, I’m not the one wearing this stuff, so what do I know. By the way, the rules committee also approved a pair of bat sensors that can be used during batting practice, but not games. They record bat speed, swing paths, all that good stuff.

Yankees have MLB’s top payroll*

The Yankees opened this season with baseball’s largest payroll at $223M, reports Bob Nightengale. The Dodgers are right behind them at $222M. There’s a catch though. This only covers the salaries of players on the active Opening Day roster. It doesn’t include money paid to players on other teams, of which the Yankees have very little. They’re paying $3M to Martin Prado. That’s it.

The Dodgers, meanwhile, are paying $18M to players not on their roster this season, including Matt Kemp, Mike Morse, and Hector Olivera. All things considered, Los Angeles still has baseball’s highest total payroll at roughly $254M. That’s down about $50M from last season. ($50M!) The Yankees are a distant second at $228M, and the Tigers an even distanter third at $200M. New York’s payroll is up $5M from last season and $10M from five years ago, give or take.

MLBTR’s Offseason in Review

I forgot to link to this earlier, but better late than never, I guess. MLBTR covered the Yankees as part of their annual Offseason In Review series two weeks ago. It’s exactly what it sounds like: a comprehensive review of the club’s offseason activity, as well as a look at the questions they still have a roster. Make sure you check it out. Tons of great information in there.

Hal Steinbrenner: “I’m not comfortable with the payroll being too much higher than it is now”

(Mike Stobe/Getty)
(Mike Stobe/Getty)

Today, at the quarterly owners’ meetings in Coral Gables, Hal Steinbrenner told reporters he doesn’t want payroll to climb much higher than it is right now. “I’m not comfortable with the payroll being too much higher than it is now,” he said to Jon Heyman and Bob Nightengale. “(But) we’ve surprised people in the past.”

This isn’t a surprise, right? Payroll has held relatively steady for a decade now even though the new Yankee Stadium opened in 2009 and MLB signed ginormous new national television deals two years ago. To be fair, the Yankees do pay a ton in luxury tax and revenue sharing each year. But still, payrolls around the league are going up while New York’s remain static.

Back of the envelope calculation: the Yankees currently have $223.6M on the books for next season per Cot’s, assuming Aroldis Chapman and Ivan Nova win their arbitration cases. Add in the rest of the 40-man roster and the $12M or so each team has to contribute towards player benefits, and the payroll for luxury tax purposes is around $240M right now.

The Yankees finished last season with a $241.15M payroll for luxury tax purposes and are again right at that number. The salary they took on in the Chapman and Starlin Castro trades replaces what they shed in Chris Capuano, Stephen Drew, Chris Young, and Garrett Jones after the season. Also, the Yankees still haven’t signed an MLB free agent this winter.

You don’t have to look any further than the Yankees roster to understand why spending huge on free agents all the time isn’t a great idea. That said, I think it’s fair to say the team is not leveraging its financial might as well as they should. The rest of the league is catching up financially, so the market advantages of being a New York team are going to waste.

Hal has maintained his plan is to get under the luxury tax threshold in the near future, which would save the team tens of millions of dollars in luxury tax and revenue sharing. The Collective Bargaining Agreement expires in December, and I assume the $189M threshold will go up with the next CBA. After getting under in 2017, the team could increase payroll substantially. We’ll see.

After ten years, Yankees’ stagnant payroll is an issue that can no longer be ignored

This place is only six years old. (Presswire)
Oh what a lovely new ballpark you have. (Presswire)

Over the last 15 years, baseball has experienced incredible growth as an industry, with MLB revenue climbing from $3.4 billion in 2000 to north of $8 billion in 2015. They might even be over $9 billion at this point. Attendance is as good as it’s ever been, television contracts are enormous (at least for teams that don’t own their own network), and MLBAM is a media juggernaut.

Baseball is extremely healthy right now and, as a result, teams are spending more than ever on players. According to the USA Today salary database, the average MLB payroll has gone from $52.8M in 2000 to $65.8M in 2005 to $83.7M in 2010 to $114.8M in 2015. The average payrolls have more than doubled over the last 15 years. That’s incredible! The Yankees specifically have gone from a $92.8M payroll in 2000 to a $213.4M payroll in 2015.

That only tells part of the story, however. New York’s payroll increased $23.1M on average each year from 2000-05. They went from that $92.8M payroll in 2000 to a $208.3M payroll in 2005. That’s insane. The team’s payroll has held fairly steady over the last ten years though. It was $208.3M in 2005 and $213.4M in 2015 according to USA Today’s numbers, which I’m certain are not 100% accurate, but are good enough for our purposes. Here’s a graph:

2000-15 MLB Payrolls

The Yankees have added some significant revenue streams over the last ten years. First and foremost, the new Yankee Stadium opened in 2009. That’s kind of a big deal. Then, in November 2012, a significant percentage of the YES Network was sold to News Corp. for hundreds of millions of dollars over a span of several years. And finally, MLB recently signed new national television contracts with FOX and TBS, more than doubling each team’s take. All of that additional revenue has not led to a payroll increase.

Of course, the Yankees have some significant expenses as well, including revenue sharing and the luxury tax. (They’re also paying off the new ballpark.) They’ve paid something along the lines of $20M annually in luxury tax for a few years now, and who knows how much they’re playing in revenue sharing. A Forbes article says the Yankees paid $95M (!) in revenue sharing in 2013. That’s ridiculous. Then again, the same article says the team led MLB with $461M in revenue that year. (That’s after revenue sharing and bond payments on the ballpark.) Forbes had the team’s revenue at $277M in 2005.

Revenue is up and expenses are up, but payroll has held steady for a decade now. To be fair, the Yankees have spent a lot of money on things not directly related to the roster the last few years. The team beefed up their pro scouting and statistical analysis departments, the Himes complex in Tampa was upgraded with major renovations a few years ago, and of course there was the unprecedented international spending spree a few years ago. Who knows what else has gone on behind the scenes?

But still, something isn’t adding up here. Annual revenue increased nearly $200M from 2005-13 according to Forbes — their numbers are estimations, it should be noted — yet payroll has not changed. Has all the extra revenue gone to increased expenses and behind-the-scenes stuff? I suppose it’s possible, but man, that’s really hard to believe. Especially when Hal Steinbrenner has been wearing out that “you don’t need a $200M payroll to win the World Series” line. He’s made it very clear he doesn’t want to spend more money.

The Yankees are in the game’s largest market and they are the biggest brand in the sport — if not all sports — and that comes with its advantages, specifically money. Lots and lots of money. Look at that graph above. From 2003 to 2011 or so the Yankees blew the rest of the league out of the water with their payroll. That isn’t the case anymore. The rest of the league is catching up, so the Yankees are not taking advantage of their market. They’ve done the rest of the league a favor and leveled the playing field, and it’s showing in the standings. The Yankees haven’t finishing closer than six games back of the AL East winner since 2012.

That is the intention of the luxury tax and revenue sharing system, of course. After all, the luxury tax is officially called the Competitive Balance Tax. It’s meant to level the playing field and as far as the Yankees are concerned, it appears to be working beautifully. Hal doesn’t want to pay the tax. He’s made that abundantly clear. And I get that. The luxury tax is dead money. The Yankees have been writing an eight-figure check for a few years now for … nothing. The money does nothing. It goes into MLB’s Central Fund and that’s it. It’s an investment with no return.

It’s one thing to pass on some free agents because of the luxury tax. Over the last few offseasons the Yankees have only spent whatever has come off the books, little if anything more. But now the Yankees have apparently reached the point where Brett Gardner and Andrew Miller — two of their very best players — are reportedly being made available. There are baseball reasons to trade them, but it’s also financially motivated too. The Yankees didn’t shed much money this year, so they can’t afford any significant free agents, meaning the best way to add talent is by trading some of their best players.

That is screwed up, man. The thought of trading players as good as Gardner and Miller because spending money on free agents is not permitted is screwed up. It’s one thing when you can’t sign a free agent because payroll won’t increase, but once you start trading away good players to make things work financially, then it’s really a problem. Shouldn’t this concern the MLBPA? The Yankees haven’t increased payroll in ten years. I feel like the union should consider that a problem.

The Steinbrenners own the Yankees and they’re free to do whatever they want with the team, the same way I own this stupid blog and am free to do whatever I want with it. And fans are free to disagree with the team’s direction. When payroll stands still for a decade even though a new ballpark opened (!) and the News Corp. deal happened and the league itself keeps setting revenue records, it’s not hard to understand why fans might be unhappy. Now there’s talk about trading good players because signing expensive free agents is not an option? Holy mackerel.

The Yankees don’t have to go out and sign the biggest free agents. You needn’t look beyond their roster to see why that can be a really bad strategy. There’s a point of diminishing returns too, where every dollar you spend brings fewer and fewer wins to the roster. I thought the Yankees were beyond that point a few years ago, but with payroll holding steady and the team winnings 84-87 games the last three years, they’re not there any more. There are some obvious ways the Yankees could spent money this winter and add a lot of wins to the roster.

For a few years in the mid-to-late-2000s it was difficult to see how a static payroll was hurting the Yankees. The rest of the league was still so far behind it didn’t matter. Now though, in 2015 heading into 2016, it couldn’t be any more obvious the league is getting more competitive and the Yankees are no longer in a class of their own. They were kings of the sport and now they’re much closer to everyone else.

The Steinbrenners don’t have to up payroll. It’s their team and they can do what they want. But they also can’t ignore how failing to keep up with league-wide inflation — a modest goal, I’d say — is hurting their chances to field one of those “championship caliber teams” Hal is always talking about. The longer the Yankees’ payroll remains stagnant, the better it is for the rest of MLB.

Business Notes: Payroll, In-Market Streaming, Yankee Stadium Letters


I wasn’t quite sure what to do with all of these spare business-related links I had lying around, so I might as lump them into one post. Here are some miscellaneous links worth passing along.

Yankees open season with $219M payroll

According to numbers compiled by the Associated Press, the Yankees opened the 2015 regular season with a $219,282,196 payroll, second highest in baseball behind the Dodgers ($272,789,040!). That is the team’s second highest Opening Day payroll in history, behind the $228,106,900 payroll they had at the start of 2013. The Yankees added about $10.5M in payroll during the season from 2010-14 according to the numbers at Cot’s, so while the Yankees are starting the season at $219.3M, recent history suggests they’ll end the year at $230M or so.

Average salary climbs to $4.25M

The average player salary in MLB climbed to $4.25M this season, so says the Associated Press. That is up from $3.95M last year and $3.65M the season before. “MLB’s revenues have grown in recent years, with the increase in national and local broadcast rights fees being a primary contributor. It is expected that player compensation will increase as club revenues increase,” said MLB’s chief legal officer Dan Halem to the Associated Press, stating the obvious.

This is the first time the average player salary has topped $4M. The average salary first broke $1M in 1992, $2M in 2001, and $3M in 2008. Clayton Kershaw is the game’s highest paid player this season at $31M, with Justin Verlander ($28M) and Zack Greinke ($28M) placing second and third. Also, Robert Raiola says the per diem for road days is $100.50 this season, up from $99 last year. That’s a nice little allowance but it’s actually not wildly out of line with what many folks with normal jobs receive during business trips. Either way, yeah, it’s good to be a baseball player.

Manfred hopes to have in-market streaming this year

Two weeks ago we heard MLB will soon announce a deal allowing fans to stream in-market games online. That report was a bit premature — no such deal is imminent — but new commissioner Rob Manfred did confirm to Brian Costa and Matthew Futterman that they are working on an in-market streaming service and hope to have it in place this year. From Costa and Futterman:

WSJ: You’ve discussed how important technology is to reach young fans. When will a 15-year-old in New York be able to watch a Yankees game on his phone?

Manfred: The best way to answer that question is to say the better part of my workday today was consumed by the topic of in-market streaming. It is particularly complicated in the context of a media market that is changing so quickly, but I do believe we will get a solution on in-market streaming in the relatively near future.

WSJ: Sometime this year?

Manfred: I hope so. I’d like to believe there will be games streamed at some point this year.

It’s unclear how such an agreement would work, though I’m guessing Yankees fans would have to subscribe to YES through their cable provider, then pay an additional fee to be able to stream online. YES did have an in-market streaming service a few years back that was totally awesome — if I remember correctly, you needed both a YES subscription and an subscription, and then had to pay an extra $50 — but it was discontinued for whatever reason.

Hopefully MLB gets this in-market streaming thing figured out and soon. It’s 2015. I’m very willing to spend my hard-earned American dollars for the right to watch the Yankees on my phone while standing on a subway platform.

No bids for YANKEE STADIUM letters

And finally, remember the giant old YANKEE STADIUM letters Reggie Jackson put up for auction? Darren Rovell says no one bid on ’em. The only bid placed at least week’s auction was a phony $280,000 bid an auction house employee placed on Jackson’s behalf in an attempt to spur on other bidders. Reggie was hoping to get $300,000 to $600,000 total for the 13 giant letters. Practicality 1, nostalgia 0.

2015 Payroll Breakdown: Part Three


We’re officially in the dog days of the offseason. All of the top free agents other than James Shields have signed, all of the top trade candidates have been traded, and there’s really nothing left to do other than count down the days until Spring Training. It would be a surprise if the Yankees made another notable move this winter, meaning something more than a minor trade or handing out a minor league contract.

Since our last payroll breakdown in mid-December, the Yankees have made five trades — including three that directly impacted the projected Opening Day roster — and signed one big league free agent as well as all of their arbitration-eligible players. They also did, in fact, pass on Max Scherzer. The 2015 payroll situation has both changed and stayed the same since our last update — the Yankees shuffled money around, they didn’t really cut any or take any on. Here’s an update on where the 2015 payroll sits.

UNDER CONTRACT (21 players signed for $216.535M)
Players: Alex Rodriguez ($27.5M), CC Sabathia ($24.4M), Mark Teixeira ($22.5M), Masahiro Tanaka ($22.14M), Jacoby Ellsbury ($21.86M), Brian McCann ($17M), Carlos Beltran ($15M), Brett Gardner ($13M), Chase Headley ($13M), Andrew Miller ($9M), Chris Capuano ($5M), Stephen Drew ($5M), Garrett Jones ($5M), Nathan Eovaldi ($3.3M), Ivan Nova ($3.3M), Chris Young ($2.5M), Michael Pineda ($2.1M), Brendan Ryan ($1.67M), Esmil Rogers ($1.48M), David Carpenter ($1.275M), Jose DePaula ($510k)

As a reminder, those numbers are luxury tax “hits,” not necessarily the player’s actual take home salary for the coming season. The Yankees seems to operate with the luxury tax payroll in mind — most of their multi-year contracts are paid out according to average annual value anyway — because I guess that’s the most important number to them. It determines how much extra they have to pay at the end of the season.

Anyway, Drew, Jones, Eovaldi, and Carpenter are all new additions since our last payroll update. Martin Prado, David Phelps, and Shawn Kelley have all been traded away. At the time of the last update, the Yankees had 16 players under contract plus four arbitration-eligible players who combined for $215.76M in tax hits. So all those trades last month resulted in one extra player and less than a million of extra payroll. Like I said, they just shuffled the money around.

DePaula signed a split contract, meaning he will earn one salary in MLB ($510k) and another in the minors ($175k). That’s standard for players in their pre-arbitration years. I included him in this section because one way or another, the Yankees are going to pay someone that sort of salary to fill out the last spot in the bullpen. It’ll probably be a revolving door of pitchers, all at that salary level. DePaula’s a placeholder, essentially.

Those 21 players listed above account for 20 Opening Day roster spots since Nova is going to start the season on the disabled list. The Yankees ended last season with a $225.6M payroll for luxury tax purposes and our estimate is already at $216.535M this year, for a little more than half the 40-man roster too.

PRE-ARBITRATION (19 players)
Players: Tyler Austin, Dellin Betances, Danny Burawa, Ramon Flores, Domingo German, Didi Gregorius, Chris Martin, Bryan Mitchell, John Ryan Murphy, Branden Pinder, Jose Pirela, Jose Ramirez, Austin Romine, Gary Sanchez, Chasen Shreve, Adam Warren, Chase Whitley, Mason Williams, Justin Wilson

Like I said, these players will earn one salary in MLB and another in the minors. Betances, Gregorius, Murphy, Warren, and Wilson are all projected to be on the Opening Day roster and will earn something close to the league minimum. (Betances figures to make the most of this group next year because he has an All-Star Game to his credit.) Estimating them a $550,000 each brings us to $219.285M for 26 of the 40-man roster spots.

The other 14 pre-arbitration players are going to be in the minors, at least for part of the season. Some will come up because they perform well or there are injuries. There’s no real way to predict their playing time. I’ve seen salary estimates for the non-MLB roster portion of the 40-man roster range anywhere from $2M to $5M. I used $2M in our last payroll breakdown but I think the higher end of that range might be more appropriate because of the team’s injury risk in the rotation, at first base, right field, and DH. Guys like Mitchell, Pirela, and Whitley could wind up spending a lot of time with the Yankees this summer. Using the $5M, we’re at $224.285M for the full 40-man roster.

MISCELLANY ($3M guaranteed and up to $15.325M total)
Players: A-Rod ($6M bonus with six more homers), Prado ($3M to Marlins), Chris Young ($3.825M in incentives), Stephen Drew ($1.5M in incentives), Chase Headley ($1M in incentives)

(Jared Wickerham/Getty)
(Jared Wickerham/Getty)

Bonuses and incentives do count towards the luxury tax, so while I’m not going to include them in our little running estimate, we do have to be aware of them. A-Rod needs six more dingers to get that $6M bonus, and the incentives for Young, Drew, and Headley are all based on plate appearances. Chances are at least some of that bonus money will be paid out.

The Yankees sent the Marlins money to help cover Prado’s contract as part of the Eovaldi trade — they’re sending Miami $3M this year and another $3M next year. That makes it nice and easy for luxury tax purposes. Unlike the incentives, that $3M is definitely going to the Marlins in 2015. It’s on the books. So our 40-man roster estimate jumps up to $227.285M. The Yankees closed the 2014 season with a $225.6M payroll for luxury tax purposes, for reference.

We’re not done though. Every team has to contribute $12M or so towards player benefits and that counts against the luxury tax, so the Yankees are really at $239.285M with their luxury tax payroll. The Yankees started last season with a payroll right around $200M for luxury tax purposes and it climbed to $225.6M by the end of the year thanks to the addition of Drew, Headley, Prado, and Brandon McCarthy. The team is starting this coming season at $239.285M.

So, in a nutshell, payroll is up approximately $40M from Opening Day last year. Most of that is because of A-Rod, whose massive salary comes back on the books now that his suspension ended. The Yankees also added Headley for the full season. Those two account for the extra payroll all by themselves, pretty much. Eovaldi is more expensive than Shane Greene, but Carpenter and Wilson are cheaper than Kelley and Matt Thornton. The non-A-Rod/Headley portion of the roster more or less balances out.

The Yankees seem to be done with their offseason moves but I would never rule anything out. Hal Steinbrenner could wake up tomorrow and decide the team just has to have James Shields, for example. I don’t expect that to happen, but would anyone really be surprised if it did? No. So, with that perpetual caveat in mind, here is the projected 25-man Opening Day roster:

Catcher Infielders Outfielders Rotation Bullpen
McCann 1B Teixeira LF Gardner Sabathia Betances
2B Drew CF Ellsbury Tanaka Miller
DH SS Gregorius RF Beltran Pineda Warren
A-Rod! 3B Headley Eovaldi Carpenter
Capuano Wilson
C Murphy OF Young Nova ?
IF Ryan UTIL Jones

The only real open spot is that final bullpen spot, which could go to DePaula or one of many other in-house options. Shreve, Burawa, Ramirez, Whitley, Jacob Lindgren … the Yankees have no shortage of cheap candidates to fill out the bullpen. I suppose Romine could beat out Murphy for the backup catcher’s job, but that would be unexpected. It wouldn’t change the payroll equation much anyway. I do expect the Yankees to keep Ryan since he can legitimately play short and that’s a good skill to have.

The Yankees set a franchise payroll record during the 2013 season, when they finished the year with a $237.012M payroll for luxury tax purposes. The 2015 team is starting at just about that number and payroll will inevitably climb higher due to call-ups and midseason acquisitions. There are only two ways the Yankees could realistically shed a significant amount of money this year: they could trade the very desirable Brett Gardner, or A-Rod could get suspended again. That’s pretty much it.

Although they are going to set a payroll record this year, the Yankees have not been increasing payroll as much as the rest of the league in recent years. Here’s a real quick and dirty graph showing the team’s payroll (in millions, duh) and the average payroll of the other 29 teams since the 2000 season (payroll data from Baseball Cube):

2000-14 NYY vs. MLB payroll

New York’s payroll shot up from 2000-04 and has held steady since 2005 with the exception of 2012, when the team lost so many players to injury and had to cover. The 2015 payroll will be the team’s second time pushing $230M+ in the last three years, so is this the start of another 2000-04-esque spike, or just a blip? Hal has strongly indicated the team will try to get under the luxury tax threshold when it presumably rises for the 2017 season, after the current Collective Bargaining Agreement expires. That leads me to believe it’s just a blip.

Either way, blip or not, the Yankees will trot out a franchise record payroll this coming season and it might not be enough to get them back to the postseason. I’m not at all convinced one (1) Max Scherzer would have been enough to do the trick either. The Yankees have a lot really bad money on the books and it’s hamstringing them. It’s not just the money either, it’s the roster spots. They’re tied to these players. Until some of these bad contracts start expiring in two years, the team might not be major players for big name free agents at all.

2015 Payroll Breakdown: Part Two


Although the Yankees didn’t do anything of note at the Winter Meetings last week, they have been busy this offseason and especially this month. Most of the moves have been on the smaller side, at least relative to last offseason, though the club has remade the left side of the infield, added some pitching, and improved the bench. As a result, the 2015 payroll situation has changed quite a bit since our last update in early-October.

The Yankees insist they will not give Max Scherzer the kind of ginormous contract it will take to bring him to New York, and when you see their current contract commitments, it’s easy to understand why. They have a lot of big contracts gone bad and next year’s payroll is already well beyond the $189M luxury tax threshold. Unless ownership decides to push payroll to a place it’s never been, Scherzer (or James Shields, for that matter) isn’t happening. Here’s where the 2015 payroll sits right now.

UNDER CONTRACT (16 players signed for $206.56M)
Players: A-Rod ($27.5M), CC Sabathia ($24.4M), Mark Teixeira ($22.5M), Masahiro Tanaka ($22.14M), Jacoby Ellsbury ($21.86M), Brian McCann ($17M), Carlos Beltran ($15M), Brett Gardner ($13M), Chase Headley ($13M), Martin Prado ($10M), Andrew Miller ($9M), Chris Capuano ($5M), Chris Young ($2.5M), Brendan Ryan ($1.67M), Esmil Rogers ($1.48M), Jose DePaula ($510k)

Those are each player’s luxury tax “hit,” not their actual take home salary for the 2015 season. The Yankees seem to operate in terms of luxury tax salary because that’s the most important number to them. Those 16 players already soak up over $206M of payroll on their own and that’s just incredible. It’s nearly $13M per player. The scary part is that no one really knows what to expect from the four highest paid players next year due to injuries and other factors.

DePaula is a special case here because the only one of those 16 players who isn’t locked into an MLB roster spot heading into next season. The Yankees signed him to a split one-year contract back in November, so he’ll earn $510k while in MLB and only $175k in the minors. For luxury tax purposes, his salary will be based on his time at each level. If, for example, he spends half the year in MLB and half in Triple-A, his luxury tax hit will be a little more than $342k — half of $510k plus half of $175k. Got it? Good. The other 15 players here are pretty straight forward. They’re all expected to be on the roster.

ARBITRATION-ELIGIBLE (four players projected for $9.2M)
Players: Ivan Nova ($3.3M), Shawn Kelley ($2.5M), Michael Pineda ($2.1M), David Phelps ($1.3M)

The Yankees started the offseason with seven arbitration-eligible players and now they’re down to four. Francisco Cervelli was traded, David Huff was non-tendered, and Rogers agreed to a contract to avoid arbitration on non-tender deadline day. The Yankees cut his salary the maximum amount, so it seems like they said either take the offer or we’re going to non-tender you. Harsh, but not a bad strategy.

MLBTR’s arbitration projections are generally very accurate but there are always some outliers, so these salaries could be high or low. For now they work as good estimates. None of those four players stands out as a contract extension candidate. Pineda and Nova would have if not for all the injuries — Nova is hurt right now and Pineda’s made 13 starts in the last three years. Then again, neither guy received a huge signing bonus as amateurs, so maybe they’d jump at the chance to get a guaranteed payday and the Yankees could low-ball them. I don’t see that happening though. Adding these four to the under contract guys gives us $215.76M on 20 players.

PRE-ARBITRATION (19 players)
Players: Tyler Austin, Manny Banuelos, Dellin Betances, Danny Burawa, Preston Claiborne, Ramon Flores, Didi Gregorius, Bryan Mitchell, John Ryan Murphy, Eury Perez, Branden Pinder, Jose Pirela, Jose Ramirez, Austin Romine, Gary Sanchez, Adam Warren, Chase Whitley, Mason Williams, Justin Wilson

As with DePaula earlier, these 19 players will sign split contracts for the 2015 season, so they’ll earn something close to the league minimum in MLB and something considerably less in the minors. Again, their luxury tax hit depends on how much time they spend at each level. At this point, Betances, Gregorius, Warren, either Murphy or Romine, and probably Wilson are the only guys here we can safely say will spend all of next season in the show. Everyone else figures to either ride the bus up and down or simply spend most of the season in the minors.

Conservatively assuming $600k each for Betances, Gregorius, Warren, Wilson, and one of the backup catchers — the MLB minimum is $507,500 next year, but these guys all have big league time and will earn more than that — brings us to $218.76M for 25 roster spots, including DePaula, who’s probably going to start the year in Triple-A. The remaining pre-arbitration players are usually estimated at $2M or so for the season, bringing us to $220.76M for 39 roster spots. (The Yankees have one open 40-man spot right now.) Good gravy that’s a lot of money.

BONUSES (up to $10.825M)
Players: Alex Rodriguez ($6M with six more homers), Chris Young (up to $3.825M based on plate appearances), Chase Headley (up to $1M based on plate appearances)

Bonuses do count towards the luxury tax and A-Rod’s homer milestone bonus is the big one. He’s six away from tying Willie Mays on the all-time homerun list and that triggers the first of five milestone bonuses. (The next milestone kicks in at 714 homers and he’s 60 away from that, so it won’t happen this year if at all.) A-Rod hasn’t hit fewer than seven homers during a season in which he actually played a game since he was a 19-year-old kid in 1995. Even with two surgically repaired hips and almost two full years away from the game, six homers seems doable for Alex as long as he stays on the field.

Young’s and Headley’s bonuses are all based on plate appearance totals. Headley gets $250k each for his 475th, 500th, 525th, and 550th plate appearance of the season. Young’s bonuses are much more complicated — he gets $150k for his 250th plate appearance and that gradually climbs to $550k for his 600th plate appearances. In a perfect world Headley gets his full $1M and Young gets maybe less than half that $3.825M. (He’d have to hit 400 plate appearances to get roughly half.) I’m not going to include the bonuses in our running payroll total because they aren’t guaranteed, but they are something to keep in mind and something the Yankees have to plan for.

There’s still a lot of offseason left and a lot can change, yadda yadda yadda, but here’s the Yankees’ 25-man roster as it stands right now:

Catcher Infielders Outfielders Rotation Bullpen
McCann 1B Teixeira LF Gardner Sabathia Betances
2B Prado CF Ellsbury Tanaka Miller
DH SS Gregorius RF Beltran Pineda Warren
A-Rod! 3B Headley Capuano Kelley
Phelps Wilson
Bench Disabled List Rogers
C Murphy or Romine OF Young Nova ?
IF Ryan ?

The bench question mark would likely be Pirela if the season started today, but maybe he gets beaten out by a non-roster invitee or something in Spring Training. Either way, that spot figures to cost right around the league minimum. The Yankees could go in a lot of different directions for the bullpen question mark, including putting Phelps in the ‘pen and letting Mitchell or Banuelos or DePaula start. Whitley, Claiborne, Burawa … lots of cheap internal options for the final pitching question mark.

Of course, I don’t know many people who want that spot filled with a cheap internal option. Lots of people want Scherzer or Shields or a big trade for Jordan Zimmermann, someone like that. A legitimate top notch starter to improve the rotation. The Yankees already have approximately $220M in luxury tax hits committed to their 40-man roster as it is right now though. Oh, you know what? I totally forgot to add the $12M or so each team has to pay in benefits each season, which counts towards the luxury tax. The Yankees are really at $232M or so for those 39 roster spots. The team finished the 2013 season — meaning after midseason trades — with $236.2M in payroll for the luxury tax, their all-time record. They’re approaching that number now before doing anything in season.

Yes, this is just an estimate and there’s still a lot of wiggle room with the bonuses and arbitration-eligible and pre-arbitration players, but not a ton. I’d guess we’re within $10M of the real payroll number, which is a lot and a little at the same time. Point is, the Yankees are at the very least in the ballpark of setting a new franchise record payroll. Adding someone like Scherzer or Shields would make it all but guaranteed. The Yankees have a ton of money and can afford this — at least I think they can, I haven’t seen their books — but Hal Steinbrenner seems disinclined to go any higher, at least right now. They do always seem to take on money in midseason trades, of course.

Given the numbers and where the payroll sits right now, I think the only player the Yankees would sign for substantial money this offseason would be Hiroki Kuroda, and that’s only because he’ll take a one-year contract and they’re very comfortable with him. If he doesn’t return, bottom feeding for more Capuano types is likely in the cards. That doesn’t mean the Yankees can’t make a significant move, they could always make a big trade where the dollars are even or they shed payroll, but those are hard to do. Aside from Kuroda, I would be very surprised if the Yankees took on any more big money contracts this winter.

2015 Payroll Breakdown: Part One


The dust is still settling following the end of the 2014 regular season, but the Yankees have already started their offseason by beginning contract talks with GM Brian Cashman. That’s the very first item on the winter agenda — finding a GM, whether it’s Cashman or someone else. Nothing can happen until the guy in charge is in place.

I have no interest in debating the merits of re-signing Cashman now. It’s pretty clearly going to happen regardless of what you or I think. Instead, I want to get a jump on the offseason and free agency by looking at how much money the Yankees will have to spend this winter. It should go without saying this is nothing more than an estimation. Salary figures are available but luxury tax calculations are complex and we really have no idea how much the Yankees can or are willing to spend. All we can have is their recent spending trends.

Anyway, if you’re worried the team may try to squeeze under the $189M luxury tax threshold in 2015 after back-to-back postseason-less years, don’t. Alex Rodriguez‘s hefty salary comes back on the books and last winter’s free agent signings make getting under the threshold all but impossible at this point. Ten players are either hitting free agency or retiring (Chris Capuano, Stephen Drew, Chase Headley, Rich Hill, Derek Jeter, Hiroki Kuroda, Brandon McCarthy, David Robertson, Ichiro Suzuki, Chris Young) but that still doesn’t leave the team with much wiggle room. Let’s break it down.

UNDER CONTRACT (ten players signed for $175.07M)
Players: A-Rod ($27.5M), CC Sabathia ($24.4M), Mark Teixeira ($22.5M), Masahiro Tanaka ($22.14M), Jacoby Ellsbury ($21.86M), Brian McCann ($17M), Carlos Beltran ($15M), Brett Gardner ($13M), Martin Prado ($10M), Brendan Ryan ($1.67M)

Just to be clear, those are luxury tax “hits” since that’s the most most important number to the Yankees. Each player’s actual 2015 salary may be different. The Yankees have ten players under contract next year and the scary thing is that they have no idea what they’re going to get out of A-Rod or Sabathia, plus they’ll be holding their breath every time Tanaka throws a pitch, at least for the first few weeks. Those ten players don’t come with much certainty.

The only contract option the Yankees have to worry about this offseason is Andrew Bailey‘s club option. Forgot about him, didn’t you? The team signed him to a minor league deal last spring then rehabbed him from shoulder capsule surgery this summer with an eye on getting him in their 2015 bullpen. The option is valued at $2.5M, so not much but not nothing either. Bailey did not pitch at all this year — Joe Girardi confirmed Bailey had a “few setbacks” in his rehab back in August — and the option isn’t a slam dunk. He might have looked awful towards the end of his rehab, enough to scare the team away. We have no way of knowing.


Arbitration-Eligible (seven players)
Players: David Huff (first time), Michael Pineda (first time), David Phelps (first time, Super Two), Ivan Nova (second time), Esmil Rogers (second time), Francisco Cervelli (second time), Shawn Kelley (fourth time, Super Two)

The Super Two cutoff this offseason is projected to be two years and 133 days of service time according to MLBTR, so Phelps will qualify at two years and 156 days. He should clear the cutoff comfortably even if the projection is off a bit. The Yankees managed to prevent Pineda from becoming a Super Two last year by sending him to the minors when his rehab was complete in July, but there’s no more avoiding arbitration now. He’ll get a nice raise in his first time through even after missing all that time.

Huff and Rogers are non-tender candidates. Huff won’t get a big raise at all and, even though he pitched well this year (211 ERA+!), I don’t think he’s someone you go out of your way to keep. Rogers actually made $1.85M this past season and the Collective Bargaining Agreement says the Yankees can’t pay him less than 80% of that next year, or $1.48M. No player has ever had their salary reduced through arbitration either. The Yankees may like Rogers’ arm but there’s no way they’ll keep him at that salary.

Estimating arbitration salaries is damn near impossible, at least for me, but I’m going to ballpark it anyway:

  • Pineda: $3M, up from $500k-ish (awesome when healthy, All-Star in 2011)
  • Phelps: $2M, up from $500k-ish
  • Nova: $3.8M, up from $3.3M (hurt all year)
  • Cervelli: $1M, up from $700k
  • Kelley: $2.5M, up from $1.765M
  • Huff and Rogers non-tendered

Sound okay to you? MLBTR’s crazy accurate arbitration projections are still a few weeks away, so this will have to do for now. If you don’t like Cervelli and/or Kelley at those salaries, you still sign then them trade them, not non-tender them. They have some actual value. Not much, but some.

Anyway, my spit-balled arbitration numbers give us another $12M for five players on top of the $175.07M for ten players above, bringing us to $187.07M for 15 players. Considering I did nothing more than guess with those arbitration numbers, let’s round it up to $188M and go with that. Round numbers are easy. Like I said earlier, this is nothing more than an estimation. In a few weeks we’ll get a better idea of the arbitration salaries once MLBTR crunches the numbers.


Pre-Arbitration (18 players)
Players: Manny Banuelos, Dellin BetancesJose Campos, Preston Claiborne, Ramon Flores, Shane Greene, Slade Heathcott, Bryan Mitchell, John Ryan Murphy, Eury Perez, Jose Pirela, Jose Ramirez, Antoan Richardson, Austin Romine, Gary Sanchez, Zelous Wheeler, Adam Warren, Chase Whitley

Richardson and Wheeler will likely be cut loose this winter, maybe Perez too. He is out of minor league options (I think) but could stick around all winter and come to camp to compete for a bench job. Then again, if the Yankees need a 40-man spot in the offseason, he’ll probably get the axe. Either way, the pre-arbitration guys who get knocked off the 40-man roster will be replaced by more pre-arbitration players (Rule 5 Draft eligible players, waiver claims, etc.), so the salary numbers are a wash.

Of those 18 players, only Betances and Warren are locks to be on the Opening Day roster. Greene is a good bet to make the team in some capacity. Something would need to happen with Cervelli for Murphy or Romine to crack the big league roster. Claiborne and Whitley are classic up-and-down depth arms while Perez, Pirela, and Flores could compete for a bench job, I suppose. The rest — Banuelos, Heathcott, Ramirez, and Sanchez — are ticketed for the minors.

Like most other teams, the Yankees have a sliding scale for pre-arbitration salaries based on service time and awards voting, stuff like that. Warren and Betances won’t make the league minimum next season even though the Yankees could technically renew their contracts at that salary. There’s a relationship aspect to this. You don’t want to upset players and agents by cheaping out with pre-arbitration salaries. Conservatively assuming $600k each for Warren, Betances, and Greene puts us at $189.8M for 18 players with this roster:

Catcher Infielders Outfielders Rotation Bullpen
McCann 1B Teixeira LF Gardner Tanaka Betances
2B Prado CF Ellsbury Pineda Warren
DH SS Ryan RF Beltran Sabathia? Kelley
? 3B A-Rod! Greene ?
Phelps ?
Bench Disabled List ?
C Cervelli ? Nova ?
? ?

Some of those open spots can and presumably will be filled internally. Claiborne or Mitchell or Ramirez or Jacob Lindgren or Nick Rumbelow or any number of other reliever could work their way into the bullpen. Maybe Bailey and Huff too. Pirela or Perez could squeeze onto the bench. The Yankees do have some options in house but no long-term answers to any of those question marks. There’s no shortstop to push Ryan to the bench, for example.

Aside from an injury-fueled outlier in 2013, the Yankees have opened the season with a payroll in the $195M to $210M range every year since 2008, give or take a few million here or there. That $189.8M covers 18 MLB roster players, though there will be another 15 players on the 40-man roster but not the active 25-man roster that count against the luxury tax. They’re usually estimated at $2M (they earn lower salaries in the minors). There’s also $12M or so in benefits every team must play. Now we’re up to $203.8M for 17 active roster players plus Nova.

If the Yankees are going to stick to that $210M or so payroll limit, they have very little room to maneuver this winter. They need a shortstop (pushing Ryan to the bench), preferably another starter (pushing Phelps or Greene to the bullpen), and miscellaneous depth pieces at the absolute minimum. Retaining David Robertson and adding another starting caliber infielder at second and/or third base seem like two items that should be pretty high on the offseason to-do list as well.

The Yankees don’t have nany pieces to offer in a cash-clearing trade either. Dealing Cervelli or Kelley is nothing more than rearranging furniture at their salary levels. Same with Phelps or even Pineda. To clear some real money, they’d have to trade Gardner or Prado, two of their three or four best offensive players. How do you trade them and realistically improve the team? I’m sure it’s possible. I just don’t see how. It would take some creativity and luck — not many clubs are willing to take on useful big money pieces in exchange for useful low-cost pieces. The Yankees are generally the salary dumpees, not the salary dumpers.

George King recently reported the “early industry vibe is the Yankees aren’t going to spend big money this winter” and I totally buy that. Seems completely plausible after spending all that money last winter and winding up with a worse record and fewer runs scored. They took their shot(s) last offseason and may now focus on tinkering rather than overhauling. And, to be honest, the Yankees aren’t one or two big free agents away from contending either. Figuring out how to get this club back on the right track without ballooning payroll will be one heck of a task for Cashman & Co.