Flushing the Payroll; What Will be the Yankees’ Spending Habits Over the Next Two Years?

Alex-RodriguezWe’ve taken a look at almost every angle of the Yankees’ roster from Jacoby Ellsbury to Luis Severino to Masahiro Tanaka and back again. If you’re a Yankees’ fan, by now you have come to terms with the team no longer functioning like it did a decade ago, adding $20-$30 Million dollars each year going after any free agent it pleased.

This generation of the Yankees’ front office seems entirely Brian Cashman based, with the Tampa faction as insignificant as the late George Steinbrenner when it comes to payroll and economic decisions. The Yankees announced long ago it had a target for payroll, in today’s dollars roughly $189 million to operate a successful, financially healthy, payroll. And for a few years it was doubted because that’s been the way things work, but it’s pretty clear at this point when the Yankees spend and when they save.

Currently, the payroll should weigh in around $210 million, about $20 million over budget. When the Yankees signed AJ Burnett, Mark Teixeira and CC Sabathia in the winter heading into 2009, they had a lot of money coming off the books and they replaced it with new talent in its prime. They did the same thing with Jacoby Ellsbury and Brian McCann. The difference has been, inbetween those years, save for Masahiro Tanaka and some extensions, the Yankees haven’t spent, electing to trade for younger talent or stand pat. It’s been the right decision and continues to be the right decision, but it’s a different decision.

Next winter, we will see expiring contracts from: Carlos Beltran, Teixeira, Aroldis Chapman and Ivan Nova.

The year after that? Alex Rodriguez, Sabathia, Dustin Ackley, Michael Pineda and Nathan Eovaldi.

The year after that? Brett Gardner, Chase Headley and Andrew Miller. In addition, a potential opt out from Tanaka.

Unlike in years’ past, there is a steady flow of payroll coming off the books over the next three years.

Over $50 million gone after 2016, over $60 million gone after 2017 and about $35 million gone after 2018.

It would seem, based on the past six years of spending habits, the Yankees will be loading up to a degree the next two years and settling in by the end of 2018. Granted, of the players listed above, it’s likely Chapman, Ackley, Pineda, Eovaldi and Miller could at least be potential extensions or a resigning. It’s also possible Tanaka receives an extension to stay at a higher rate or is even more money in the pot if he leaves.

Let’s say for the sake of argument, Chapman, Ackley and Eovaldi are all retained. This may add about $20 million in payroll when you consider Chapman getting his bump from the $10 million per year he should get this season, Ackley who would be a nominal pay increase and Eovaldi, who may very well be a $15 million dollar arm. Adding that to the current rate, the Yankees are, in actuality, more around $230 million right now. So it’s possible they end up spending only mildly in a weak free agent class next year. With the entire infield under contract through the end of next season except Teixeira (who will be replaced at league minimum, by Greg Bird), there won’t be any increases there except through arbitration with Didi Gregorius (which won’t be much).

It’s conceivable, Aaron Judge, emerges to replace Carlos Beltran with Aaron Hicks acting as a stopgap. And using our predictions, we can say: Tanaka, Eovaldi and Severino will all be here through the thick and thin. In the bullpen, even with Miller’s departure, Dellin Betances and the retained Chapman are more than enough to build around with prospects. The Yankees also have the option of letting Chapman walk after this season and collecting a pick, but it would seem a somewhat curious move to acquire him for a year they are unlikely to win a World Series.

So essentially, the Yankees will be looking for two starters, one an ace, over the next two winters and will have about $20 million to play with next year and $60 million the year after that to find them. Taking additional arbitration into account and assuming they need to find a Free Agent power bat to replace the loss of Tex, A-Rod and Beltran, New York essentially needs three key players with $80 million.

It would make a lot of sense for the team to trade Miller and Gardner before their contracts expire and we can almost guarantee there will be major league level trades over the next two years (dealing with the Mets, who badly need a back end of the bullpen arm and an outfielder makes too much sense). If Judge can hold down right, they can place a power hitter in left. Even if the Yankees don’t produce a starter in the next two years, we’re still stuck at finding or trading for two.

Trading Gardner and/or Miller sometime this season for a young, quality, arm as both a hedge against Tanaka opting out, injuries or looking into the future, is probable. Both players have attractive but redundant skill sets at affordable prices. They have salaries coming out to $22 million a year, the price of a number two starter. For the sake of numbers, let’s just add that into the arbitration raises over the next two seasons and factor in the payroll being received in a trade.

It seems extremely likely with $80 million to spend over the next two winters to maintain a $190 million dollar payroll, the Yankees can find an ace and a middle of the order bat, two salaries which may very well eat up about $55 million of that figure. With the remaining $25-30 million, they should easily be able to replace bench players and even find upgrades while rounding out arbitration.

The Yankees’ financial plan has just about arrived and they have remained somewhat competitive, become younger and more mature in the process. Expect a potential big trade this season, extensions next season and some big acquisitions in the winter heading into 2019, which would appear to be the year a young Yankees’ team with a responsible payroll competes for a World championship, 10 years after its previous title.

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