A half-dozen years ago, the Yankees developed a plan. As a team that had consistently exceeded the luxury-tax threshold, the Yankees were paying an extra 50% on every dollar over Major League Baseball’s competitive-balance tax rate. Their financial commitments also made them ineligible to recoup some of their revenue-sharing money. As a response, the club resolved to reduce spending ahead of the 2014 season, aiming for a payroll figure below the $189-million threshold. That would reset their tax rate to less than 20% in 2015 and reduce their commitments to revenue sharing.
That never happened, though. In 2013, the team failed to make the playoffs and, despite the major gift of having Alex Rodriguez’s salary removed from the books, the plan was scrapped and a massive spending spree undertaken. Four years after the plan was discarded, the Yankees will once again have that same opportunity. This time, they’re in a much better position to execute it.
While the prospect of saving a lot of money in salaries and taxes is enticing even for a team with as much money as the Yankees, the prospect of reaching the playoffs and driving up attendance is also financially beneficial — and probably more enjoyable, too. That’s likely the logic that informed the Yankees’ offseason spree a few years ago. After the club had Alex Rodriguez’s salary removed by suspension, the team went out and signed Carlos Beltran, Jacoby Ellsbury, Brian McCann, and Masahiro Tanaka for Derek Jeter’s final year. The result: a payroll once again over $200 million. The team drew more fans, but fell a bit shy of the playoffs. They secured a Wild Card spot in 2015 but promptly lost to the Astros.
Fast forward to the present, and the Yankees once again have a payroll that will exceed $200 million by season’s end — well above the $195 million competitive-balance tax amount for this season. They also don’t have a great shot at the playoffs according to our projections, which forecast them for 79 wins and a 14% chance of qualifying for the postseason. Just how long of a rebuild the Yankees can stomach remains to be seen, but here are the contracts coming off the books next season.
Yankees Contracts Ending After 2017
Among the players listed here, only Pineda figures to be worth the money he’s owed this season. The departure of Tanaka might hurt, too, even with a $22 million salary attached. In 2018, the Yankees will owe Ellsbury, Tanaka, Starlin Castro, Aroldis Chapman, Brett Gardner, Chase Headley and Brian McCann (a portion of his salary with the Houston Astros) a total of $101.2 million. Raises in arbitration to players like Didi Gregorious, Dellin Betances, Aaron Hicks, Austin Romine and Adam Warren might add another $20 million. If we conservatively figure another $15 million for player benefits, that places the club’s post-2017 commitments at something like $135 million, meaning the Yankees have about $60 million to make improvements while still remaining under the competitive-balance tax.
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