What Alex Rodriguez’s Suspension Means for the Yankees

The suspension portion of the Alex Rodriguez Legal Battle Royale Season One has finally been resolved. The Yankees and the writers who analyze them can officially remove the A-Rod variable. Yesterday, arbitrator Frederic Horowitz released his decision that Rodriguez’s suspension would be reduced from 211 games to 162 games. While Rodriguez benefits in the decision, it’s quite a bit less than he anticipated. A-Rod will appeal to federal courts, but as Wendy Thurm noted in her article yesterday:

A court may intervene [in an arbitration decision] only when the arbitrator strays so far from his authority that he “dispenses his own brand of justice,” as the Supreme Court wrote in a recent opinion.

It’s pretty clear that Horowitz did no such thing, since he reduced the sentence without eliminating it. Personally, I wonder if the fate of Shyam Das affected Horowitz’s decision. Das was the arbitrator who ruled in favor of Ryan Braun prior to the 2012 season. Major League Baseball then fired Das, seemingly due to the decision against them. That’s one of the challenges facing baseball arbitrators, they must walk a fine line with their decisions or else risk losing their job. To me, it smells like Horowitz sided with A-Rod but decided to walk the line. That’s just my personal speculation and even if I’m right, it doesn’t matter.

What does matter is that the Yankees now know that they have another $24.3 million to spend and a hole at third base to plug. The Yankees have an outside shot at staying under the $189 million luxury tax rate. According to Joel Sherman and Ken Davidoff, they are currently at $151.5 million with the arbitration cases of Francisco Cervelli, Brett Gardner, Shawn Kelley, Ivan Nova, and David Robertson still pending. Matt Swartz of MLB Trade Rumors estimates that the quintet will cost $14.8 million. So the Yankees are working with roughly $23 million to spend in 2014. Keep in mind that in-season acquisitions also go against this figure.

The Yankees have two black holes that need to be addressed – third base and the rotation. The free agent market offers slim pickings at third base. The Yankees won’t have to pay much in order to sign Mark Reynolds, Michael Young, or Justin Turner, but as the saying goes “you get what you pay for.” The club has been connected with Young and Reynolds. There has also been speculation that Kelly Johnson could play third base, but that’s assuming that Brian Roberts can top the 77 games he played last season – and that was the most he’s played since 2009. Never mind that Johnson has almost no experience at the hot corner (admittedly, could he be worse than Young or Reynolds defensively?).

The trade market doesn’t appear to include any palatable solutions. The Yankees have few prospects nearing major league readiness, which means they won’t be able to convince a team like the San Diego Padres to part with Chase Headley. Some options that might be more attainable include Lonnie Chisenhall, Freddy Galvis, and Josh Satin. A few second sackers like Rickie Weeks or Daniel Murphy might also work as options and the Yankees could consider sliding Stephen Drew to third base. Any way you slice it, the outlook is bleak. It’s a good thing the Yankees upgraded at catcher and in the outfield, because their infield is primed to provide very little value.

Starting pitcher is that other black hole and it’s where most of their remaining funds should go. The Yankees currently have a three man rotation of CC Sabathia, Hiroki Kuroda, and Nova. Michael Pineda is an interesting rotation candidate, but he’s better suited to battle for a job with a team like Chicago. It’s not like the Yankees to rely on so many unknown quantities and the only reason they might do so is because of the luxury tax. Other options include Adam Warren, David Huff, and David Phelps – none of which are more than depth pieces as starters.

The Yankees are widely assumed to be one of the front runners for Masahiro Tanaka. If they do win Tanaka, his AAV will be close to the $23 million that the Yankees have left to spend. The club can and probably will get creative might like to get creative by offering a backloaded deal so that they can sign or trade for another quality pitcher. Unfortunately, the CBA wisely prevents such loopholes by using a contract’s AAV for determining the luxury tax burdern

Of course, many teams are bidding on Tanaka and they all have something different to offer. There is a very real chance that the Yankees won’t win the bidding. Thankfully, a variety of good pitchers remain available. The list potentially includes Ubaldo Jimenez, Matt Garza, Ervin Santana, Bronson Arroyo as free agents and Justin Masterson, Homer Bailey, Jeff Samardzija, and David Price as trade bait. That last name is probably out of the question and any high quality trade target will be difficult for the Yankees to afford. With free agents, the Yankees could again offer backloaded contracts to avoid the luxury tax in 2014.

And that sums up where the Yankees stand now that the A-Rod suspension has been confirmed. Third base appears to be an unsolvable quandary, with Stephen Drew perhaps representing the most savory option. But signing Drew would reduce the amount of money available to sign two starting pitchers – at least it will if the Yankees are strict about staying under the $189 million luxury tax threshold. Those pitchers probably need to be of a fairly high quality if the club is to reach the postseason. Sabathia, Kuroda, and Nova are not guaranteed to stay healthy, and the rest of the internal options after Pineda are swing starters. The Yankees on standing on shaky ground.

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10 years ago

They have substantially less than $23M remaining to spend for 2014 if they wish to stay under the luxury tax threshold. The above figures don’t include the Yankees 1/30th share of benefits (about $10.8M in 2013, likely higher in 2014), or 40-man roster players, or salaries for pre-arb players, or perks or potential bonuses. Realistically, they have no more than about $5M left to spend with the current roster to have any hope of finishing below $189M.

10 years ago
Reply to  Bill

I’m afraid you don’t know what you are talking about, dude. You add like a Red Sox fan.

10 years ago
Reply to  AsstGMNYY

Pretty sure the cap number includes benefits, so the article’s estimate of Yankee cap space is off by $10M right there. Joel Sherman is a terrible source, he simply reads BB-Ref pages without comprehension.

10 years ago
Reply to  ValueArb

I’m fairly certain cap numbers don’t include benefits. Still the Yankees have about 14 million to spend and can always trade Cervelli and Gardner.

10 years ago
Reply to  ValueArb

Exactly right. Cot’s Contracts has the same problem. It includes individual salaries, but not the approximately $10.5-$11M each team owes to league pensions and related. And, it doesn’t list the $3.2M ding that A-Rod still leaves.

Sherman (plus Cot’s et al) also don’t list 2013 salaries, for 2014, of arbitration eligibles not yet inked for 2014, as Bill notes.

Reality? With arb raises, plus pension contributions, etc.? The Yankees are actually at about $187M, by my guesstimates.

So, the reality is, signing Tanaka puts them WAYY over cap. Signing, even, a Garza puts them over the cap. Even trying to upgrade to fill the black hole at 3B would likely do it.

This also ignores in-season call-ups etc.