Why Are the Yankees Cheap: Savvy or Remorse?

The Yankees have raised a lot of eyebrows this winter by standing pat on pitching and sending unambiguous signals that their unwillingness to spend money is predicated on wanting to avoid the luxury tax. A Yankee source went so far as to tell ESPN’s Wallace Matthews that the team was staying away from Hiroki Kuroda because, “We simply don’t have the money to pay him.” I guess that depends on what the meaning of “have” is. But I think a better translation is that the Yankees are tired of all their years of spending stupid money, paying the price through luxury tax and literally watching their dollars be spent by their 29 competitors. (In an earlier version of this story, I fell into the common fallacy of believing that luxury tax money went into the revenue sharing pool. It does not.) The New York Times’ Tyler Kepner surmises that they might be saving up for Cole Hamels or Matt Cain next year; Brien at It’s About the Money Stupid thinks that they’re making an emotional overreaction to their history of overspending. Of course, it could be both.

Hal Steinbrenner wants to get the Yankee payroll below the 2014 luxury tax threshold of $189 million by that year, and the Yankees have sent clear signs that they weren’t interested in the prizes of this free agent market: Yu Darvish, Prince Fielder, Albert Pujols and C.J. Wilson. Pujols and Fielder make sense, as the Yankees are set at both first base and DH — but Wilson? He wanted a meeting with the team and, according to Kepner, the Yankees didn’t want to talk to him. This, despite the fact that it’s a universally acknowledged truth that the Yankees need at least one more starting pitcher.

Over at River Ave Blues, Mike Axisa wasn’t remotely worried.

Are the Yankees still a really good team? Obviously. They need a starting pitcher, really just one to bump Ivan Nova and Freddy Garcia down to the three and four spots of the rotation, where they belong. Anything after that is gravy. As I’ve said before, the Yankees don’t need that pitcher today, just at some point later in the season and before the playoffs.

There’s no question that the Yankees — as currently constructed — are a solid team, even with a rotation of CC Sabathia and the likes of Ivan Nova, Freddie Garcia, A.J. Burnett and Phil Hughes. And if the Yankees were to spend money the way they used to — giving multi-year deals to the likes of Carl Pavano, Jaret Wright, Kei Igawa and Burnett — not to mention relievers like Steve Karsay, Kyle Farnsworth and Rafael Soriano — there would be no guarantee that they’d wind up with a significantly better on-field performance than they’ll receive from the above.

As Dave Cameron wrote recently, one-year contracts for pitchers might actually be the best deals on the free-agent market, in large part because of the Yankees’ massive success last year with Freddie Garcia and Bartolo Colon.

But that’s a dangerous strategy, as Brien at IATMS writes:

The worst-case scenario (within the realm of things that are reasonably plausible) in which Ivan Nova regresses from how he pitched after his demotion last summer and Freddy Garcia, A.J. Burnett and Phil Hughes are all terrible simply isn’t that unlikely at all. Throw in the possibility of CC Sabathia getting hurt, and this group is playing another game of Russian Roulette.

Axisa is right that the Yankees don’t have an urgent need right now, but it’s not hard to predict that at least one of those four starters won’t make it all the way. And by that time, the quality of available pitchers will likely be reduced. The Yankees might be predicting that Manny Banuelos will be ready to take over as soon as one of them falters — and that another cheap, one-year contract would simply serve to block him. But this is a remarkably peculiar hill to die on. Like George Steinbrenner’s famously misguided penny pinching — in 1989, he pulled many of his scouts off the road to save money on their travel, despite spending millions on stupid free agents even then — Hal Steinbrenner’s Yankees have chosen a weird place to economize. If they truly wanted to save money, they could stop giving massively above-market retirement extensions for Yankee icons in their late 30s, or stop Randy Levine from overpaying relievers.

Certainly, getting under the luxury tax is a great idea. And sometimes an austerity program is the only way to set the necessary precedent to combat overspending. But austerity programs don’t work when you scrimp on efficient programs that do work; they work when you cut the fat. As long as Mark Teixeira, A.J. Burnett, Alex Rodriguez and Derek Jeter are collecting a paycheck from the Yankees, there would be no way for Hiroki Kuroda to be the most overpaid player on the team.

Of course, if Kepner is right, this could all just be a savvy bet that the 2012 Yankees will be just good enough to reach the playoffs, where anything can happen. At that point the Yankees could push in all their chips for the latest top-flight free agent. But that’s a strategy more befitting the hara hachi bu Atlanta Braves than the richest team in baseball. They aren’t anywhere near a sure thing, and the price of a little more certainty isn’t overly steep. The Yankees have long been addicted to overspending, but cold turkey isn’t necessarily the best way to cure it.

Alex is a writer for The Hardball Times.

Newest Most Voted
Inline Feedbacks
View all comments
11 years ago

No offense Alex, but I stopped reading right here:

“But I think a better translation is that the Yankees are tired of all their years of spending stupid money, paying the price through luxury tax and literally watching their dollars be spent by their 29 competitors.

You might want to look up whether or not that’s actually true, and revise your article as necessary.

11 years ago
Reply to  gonfalon

What do you mean by this? That the Yankees haven’t paid millions in luxury taxes? Or that that money hasn’t gone to fund the operations of the other 29 teams?

If you’re referring to the fact that a number of low-payroll bottom-dwelling teams have been very profitable and have basically pocketed the revenue sharing money, that doesn’t render Alex’s sentence untrue. And it should make the Yankees even more (not less) frustrated about paying money to their competitors.

Kevin S.
11 years ago
Reply to  Yirmiyahu

Revenue sharing and luxury tax are not the same thing. Luxury tax payments are not disbursed to the other teams. Revenue sharing shares just that – revenue. The Yankees would have to consciously attempt to make less money if they were pissed about funding the rest of baseball.

11 years ago
Reply to  gonfalon

Wow, thanks for the info. I somehow hadn’t seen this story before.

So luxury taxes =/= revenue sharing. Good to know.

Woodrum's UZR Article
11 years ago
Reply to  gonfalon

//hockey rink article’d

11 years ago
Reply to  gonfalon

I always thought the luxury tax went into the revenue sharing pot. Good to know.