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The New Yankees Payroll World

The New Yankees Payroll World

A Rod could be main reason New York fails in near future.

The New Yankees Payroll World

The economy has official gone into the toilet. A report today via Joel Sherman indicates the Yankees are finally taking a hard look at their payroll. Sherman states the Yankees want to have a payroll of $189 million or less in 2014, when that becomes the luxury tax threshold. With the new CBA, the Yankees would have to pay a 50% luxury tax due to the fact they are repeat offenders. Staying under the tax threshold would yield them $40 million in savings under the new rules. This likely means the Yanks are out on long-term deals for players such as C.J. Wilson , Yu Darvish, or Mark Buehrle. Doing more with less is something most teams have gotten accustomed to, but this is a new world order for members of Pinstriped Nation.

Long-term this shouldn’t be an issue. If Brian Cashman can’t field a 90+ win team yearly on a $189 million dollar budget, then the Steinbrenners shouldn’t have given him that new contract extension. Any competent GM should thrive under those parameters, but let’s not forget there is payroll going forward that makes it tricky over the next two seasons. If you want to make inroads in the AL East, then 2012 and 2013 might be a great opportunity.

According to Cot’s Contracts, the Yankees already have $173 million allocated to 11 players in 2012. There are another 10 players that are under team control that made about $12 million dollars combined last year. That puts the Yankees at $185 million, and it doesn’t include any performance bonuses. In other words, you very well may see the roster “as is” unless they could dump some players. Also remember that $12 million in controllable players is without any raises, which all will get in some capacity.

The real issue with the current payroll is you have a few overpaid players. I won’t get into Derek Jeter because of who he is, but Alex Rodriguez ($30 million) and Rafael Soriano ($11 million) come to mind.

Rodriguez, according to Fangraphs, hasn’t given the Yankees $30 million dollar production since 2007. He hasn’t been giving them $20 million dollar production the last three seasons. I realize there are other benefits to Rodriguez, such as memorabilia and attendance, but if you got any Yankees executive in a room with truth serum, I wonder if they believe he is worth the price; especially after the steroid revelations in 2009. I don’t know if the Yankees would be any worse off the last 4 years if they spurned A-Rod after 2007 and signed a less costly third baseman. I understand how big he was in the ’09 postseason, but the Yankees won that year more due to their bullpen, than offense.

If the Yankees fall short in the pitching department, you can look at Rodriguez as the issue. For that money you could pay a very good third basemen (David Wright makes $15 million), and still have another $15 million to invest in pitching. Instead, you have to hope Rodriguez can provide you that kind of production for double the price.

Even worse, is the absurd contract given to Rafael Soriano. If the Yankees have done one thing well the last six years, it’s developing middle relievers. Joba Chamberlain, David Robertson, and even Phil Hughes have proven they are among the top tier of setup men. There are other kids in the minors (i.e. George Kontos) that could probably do as good as job as Soriano. Do the Yankees really need to pay someone $11 million dollars this year, and another $14 next year, to imitate Armando Benitez? The answer is obvious, unless you talk to Scott Boras. Add Soriano and you have now $41 million dollars to spend this winter.

It does get a little more reasonable next year as they are committed to $127 million  for 9 players. Both Russell Martin and Mariano Rivera are free agents that would have to be addressed. There are also 9 arbitration eligibles that, right now, are making about $8 million dollars. Both Rivera and Martin would command a combined salary of about $25 million. That leaves $28 million, some of which has to go to raises and bonuses, to spend on free agents.

Of course, 2014 is when things start to change. They have $75 million committed to 4 players, but it raises another $5 million if Jeter doesn’t exercise his player option. The big decisions that offseason will be mega contracts to Robinson Cano and Curtis Granderson.

In the end, the Yankees aren’t in bad shape. They have more margin of error than any other team, but they do have to hope their stars don’t decline too steeply. They also have to rely on young players to develop; a process that takes patience, something that is in short supply in many quarters. Perhaps this is a good thing, as it’s time for some members of Yankee Nation (see Randy Levine) to understand that winning a World Series isn’t a birthright. Also, if you make the playoffs and lose, it doesn’t mean the season is a failure. A product that is in the mix for a title each year is all you could demand.

Some Yankees fans may not want to hear this, but I think the organization will be healthier with this renewed focus on payroll management. There will be more of a focus on homegrown players and less “designer signings” that fail and sour the fans on the brand.

Welcome to the new Yankees World Order.

By Mike Silva
Monday, 5 Dec 2011

 

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