Photo courtesy of the New York Daily News
Somewhat overshadowed this past week by yesterday’s opening of spring training games were the remarks of Yankee General Partner Hal Steinbrenner. He made the rounds in both print and radio, and confirmed what the Yanks have been saying consistently since the beginning of this off season. The 189M payroll number is real, and they have a blueprint for getting there over the next few years. With that in mind, I wanted to take a look at what that might mean in terms of personnel decisions and who stays and who goes. Of course, all of this is subject to change. Injuries and ineffectiveness can throw a wrench into the best laid plans. I just wanted to see how they get there from where we stand today.
Here’s from Cots. The Yanks have only 75M committed, but it’s wrapped up in just three players (CC, Tex, Alex). There are a few no-brainers after that. If Robbie Cano and Curtis Granderson stay healthy and continue to perform, there’s no doubt the Yanks will retain both of them. Both are elite offensive performers at premium defensive positions, and both play the field well. Let’s use a ballpark number of 20M a piece for Robbie and Grandy, that takes you to 115M for just 5 players. Next let’s look at the arb guys. Nunez, Nova and Pineda will be in their 1st year of arb, meaning they will get a nice bump from the MLB minimum but still be vastly underpaid for their services. 2nd year arb guys are Francisco Cervelli, Chris Dickerson, Ramiro Pena and Cory Wade, none of whom I’d worry about much either way. 3rd year arb guys are David Robertson and Brett Gardner, both of whom figure to be key pieces and make decent money through arbitration. Using some very rough math, I’ll project these players put the Yanks in the 140-145M payroll range.
Now let’s total this up from a roster standpoint. The first 3 spots in the rotation are locked up, as is the closer’s role. Around the diamond the Yanks are set at 1B, 2B, 3B, CF and LF. SS is an open question, Derek Jeter will be age 40 and has a player option for 8M for the 2014 season. I have to think the Yanks have their fingers crossed that Nunez will be ready to man the everyday SS role by the end of next year. Nick Swisher is a FA after this year and assuming he continues to perform and stay healthy at age 32 he should garner a 3-4 year deal in the 12-15M range. He would represent arguably the 2nd best available RF on the market next year, just behind Andre Ethier who is younger (30) and figures to get both more years and dollars on the open market. With no MLB ready RF options in the farm system as of today, I’ll assume the Yanks bring back Swisher pushing them to just below 160M in payroll.
This is where it starts getting tight. You have 30M to work with. You need an everyday Catcher, 4th and 5th starter, and an entire bullpen. The bullpen is the least of my worries, after the closer and primary set up man the rest of them are fungible assets. Last year the Rays completely rebuilt their entire bullpen and still made the playoffs. The 5th starter has to be someone inexpensive, that’s where Banuelos or Betances comes in. One of them figures to be in the rotation by next year, perhaps the other working in relief. Both Joba Chamberlain and Phil Hughes are due to become FAs in 2014. If Joba is still a set up man its plausible he can be retained at a reasonable cost. If Hughes has a healthy and effective campaign in the rotation this year and next, he’s going to get paid on the open market. I could see the Yanks retaining Hughes on a short deal around 10-12 per, and I could easily see them letting him walk or dealing him after this year. They still don’t have an everyday Catcher, unless they see Austin Romine being groomed this year to take over full time in 2013. But all indications are Romine needs another year in AAA, so the Yanks may have a decision between Hughes and Russell Martin. I would bet they retain Martin and deal off Hughes if he reestablishes his trade value. The Yanks have lots of options for starters at AAA, and Hughes has been a big disappointment from the top prospect status he had back in 2007. Given how he’s performed, he won’t be that hard to replace.
Another issue that comes into play are the milestone HRs for Alex Rodriguez. He currently has 629 HRs. His contract agrees to pay him $6M each for reaching 660, 714, 755 and tying and breaking major league HR record. Let’s give him around 30 HRs annually over the next few seasons. 660 could happen late this year, which means #714 would figure to happen sometime in 2014. If that’s the case, you’ll need that second Killer B or another young starter (Campos?) to fill out your rotation, and we’ll need to assume that one of Banuelos/Betances has already locked down a spot in the 2013 season. But one way or another, two of the 5 rotation spots would need to be filled with young, cheap arms.
A few thoughts. Everyone else in baseball has a lower payroll than the Yankees do, and the last time I checked the Bronx Bombers have only won the World Series once in the past decade. Spending the most guarantees nothing, anyone who follows the game closely should know that by now. Next, its important to remember that the best Yankee team of most readers lifetime was the 1998 edition, and they were #2 in payroll behind the Baltimore Orioles. There’s something to be said for teams that are younger, hungrier and more flexible in how they can win games. Yankee fans shouldn’t assume that the team is no longer committed to winning because they’re not spending money like crazy the way George did. They can deploy more resources elsewhere, whether it be more scouts to find the next hidden draft gem or better development people at the lower levels to develop the skills of the prospects they have. The Yankee teams that won annually in the late 90s were largely homegrown, with a few big ticket items thrown in that often were acquired (Cone, Clemens, O’Niell) via trade. The 189M payroll seems to be a return to that way of doing business, and I’m all for it.
If you enjoyed this article, please consider sharing it!
I’ve read the the $189 million figure also includes medical/pension costs and salaries of all those on the 40 man roster; so getting to the $189 # is going to have to get really creative.
it does, and those seem to add about 15M+ to the equation, so the Yankees would be left with less than 175M for 25-man roster AAV and any earned bonuses
Unless we are counting that towards both the current number as well as the new goal, I’m not sure how its relevant. If we do that for todays payroll, it goes to around 230 instead of 210. It is my understanding that Hal was referring to getting the current 210 number down to 189.
However, if MLB is changing the way they calculate the luxury tax to include pension costs, then it would certainly apply.
Its not a change, benefit costs are currently included, and were included in the 212.7M Yankee luxury tax payroll in 2011, and in their luxury tax payrolls of previous years.
The whole 189M thing is based on getting under the luxury tax threshold, so benefit and 40-man roster costs absolutely factor in, and will leave less than 175M for AAV of the 25-man roster.
Also ARod’s HR bonus’s will likely start kicking in 2014, that’s another $6m to factor in.
I think the Yanks can keep their current team intact (Swish, Cano, Granderson and possibly even martin) but it will mean they won’t be able to bring in any free agents over the next couple years. You’ll see them sign an Ibanez/Jones/Chavez bench types for $1mil 1 year fliers but you won’t see them land anyone like Hamels.
So the bullpen and final 2 rotation spots will have to be filled internally.
Let’s see how Pineda and Nova perform this year, because if they aren’t up to the task the Yanks may pursue Hamels at the expense of Granderson or Cano
“I could see the Yanks retaining Hughes on a short deal around 10-12 per”
hahahahahahahahahahahahahahahahha
unless you mean 10-12 dollars per season, that’s outrageous
If Phil puts up another 2 seasons similar to 2010, he’ll get 10-12 on the open market. Health concerns will keep down the years. But I think the Yanks will trade him next off season if he performs well this year.
I don’t think you can keep Granderson. You are at 160M without a catcher, 4th starter, a DH, an entire bullpen and Jeter’s option. You have 15M remaining. Assuming Jeter picks up his option (8M), you have 7 remaining. It does not work. Granderson will be 33 by 2014. I think it is the perfect time to let him go. Swisher will be hard to retain as well.
The way I see it:
- Starting nine (~110M): Rodriguez (27.5), Teixeira (22.5), Cano (20), Jeter (8), Gardner (8), Martin (10), which leaves you 14M for LF, RF and DH. You can sign Swisher for 12M per and fill the other spots with in-house candidates.
- Rotation (~45M): Sabathia (24.5), Pineda + Nova (12), Killer B (0.5), which leaves you 8M for Hughes/FA.
- Bullpen + Bench (~15M): No free agents there. 100% homegrown.
- HR Bonus (6M)
- Player benefits + 15 players (~15M)
I’m at ~191M.
Reading through the last CBA, I think if Jeter exercised his option he would count for 14M, since player option years (as well as player opt-out years) are treated as guaranteed years unless the buyout is over 50% of the option value, so I believe Jeter’s contract counts for 4 years/56M (actually slightly less because some of the money is deferred without interest)
If you’re right, this is really bad news. At this point, I don’t know if it can be done without seriously compromising the team’s playoff chances.
It will be difficult, but not impossible. A lot depends on how the prospects step up.
I don’t think Jeter’s option is that black & white. Derek Jeter’s luxury tax # for 2011-2013 seasons is $17M (based on 15M in 2011, 16M in 2012, 17M in 2013 + 3M buyout of player option = 51M). His option is $8M that can increase to 17M based on performance bonuses (check out Cots baseball contracts for bonus structure). He didn’t earn in 2011 and I would venture its unlikely he will earn any in 2012 or 2013. If he doesn’t and his option is picked up the total value is 56M which is 14M AAV. However, the Yanks already took some of that luxury tax hit in 2011-2013 with a luxury tax # of 17M. I am not sure how this works but my guess is it factors that in, making Jeter’s luxury tax # for 2014 a much more manageable $5M.
It appears that Jeter’s contract would count as a 4 year/56M contract from the start, not 3 year/51M
So it would not be 17M/year for the first 3 years
There are further complications that make the situation a bit murky though. 2M/year for 2011-2013 is deferred without interest, so present value of those payments would be used, reducing the contract for luxury tax purposes to slightly less than 56M.
Also, there is a clause that if a player option is worth less than the higher of 80% of the AAV of the contract (15M x 80%= 12M) or 75% or the AAV computed without the option (17M x 75%=12.75M), then the difference (12.75M – 8M = 4.75M) is pro-rated over the guaranteed years of the contract (1.58M/year).
So without discounting for the deferred payments, it seems Jeter’s contract would count for 15.58M/year for 2011-2013. If he exercises his option, he would count for 14M in 2014, and the Yankees would get a rebate of tax paid on the extra 1.58M/year for 2011-2013. If he declined his option, the difference between what he was paid (51M including buyout) and what was taxed (15.58M x 3 = 46.75M) would be added to the 2014 luxury tax payroll (51-46.75=4.25M).
So in summary, 15.58M for 2011-2013, 14M in 2014 if he exercises the option, 4.25M in 2014 if he declines the option (In reality, all of those numbers would be slightly lower because of the deferred pay)
I think its too early to make any kind of commitments regarding Granderson, hes coming off of a career year at the age of 30. He will be 33 when he hits FA. Its too far away to project what type of player he will be and therefore, what type of contract he will get. He may be more of the type of player he was for most of his time in Detroit and therefore, still be useful and affordable. Even if he is still producing at the levels he was last year, other teams will know he is greatly aided by Yankee stadium and he will be 33, so he could be inline for a Beltran type deal. I think there are too many variables for Granderson to discuss him seriously at this point.
I kind of agree about Granderson. And as much as I like him, he will be entering his age 33 season in 2014, isn’t giving a long term big money contract to someone entering their age 33 season counterintuitive to lowering payroll and building a more flexibile roster? Now I know grandy was great last season, but by his mid 30′s he’ll have to move off CF and I just can’t see that being a wise investment. So ultimately I agree, something as to give.
If the money saved is just going to go the the Steinbrenner Family’s bottom line then I’m not going to root for the Yankees to make it. If the idea is to have more financial flexibility then I’m for it provided they don’t shoot themselves in the foot to get there. After all, it was their guy (Hank) who boxed them in with the ridiculous A-Rod contract.
Actually most closers and primary set up guys are fungible. Mo is not fungible but he’s a rare exception. D-Rob has yet to prove that he’s not fungible as his career comprises only 202 innings.
The bottom line is that 2014 may be a ‘retooling’ year, and a rare opportunity to see the young-uns we wouldn’t normally see. Lowering the payroll and resetting the tax will save $100m over the the first few years after 2014.
Steve S … I enjoyed reading this post but how do you figure Hughes getting $10-12 million per year in the open market unless he puts in Cy Young caliber seasons in BOTH ’12 and ’13. Does anyone see that happening? I think the unanimous answer to that is NO.
Hughes is coming off an injury-riddled season where he only logged 75 innings. Lets see Hughes perform above league avg through 175 innings before viewing him as anything more than a serviceable, cheap #5 starter.
If he posts 2 more seasons similar to what he did in 2010, he’ll get paid. That will make 2011 look like a bump in the road for a still VERY young (27) free agent pitcher who may be entering his prime years. 10-12M per isn’t a huge number for a FA pitcher.
I think with the way things are heading, that the Yankees are going to have to let Swisher walk this year. They will need to replace his production, and barring some sort of amazing break out season from a guy like Zolio Almonte, a trade will need to be made to replace Swisher. If they cant afford Swish, the replacement they will get through FA wont be appealing.
If Hughes becomes a top of the rotation guy, or very good middle of he rotation guy this year, he could conceivably become the best trade chip they have and the most expendable do to his rising salary and the host of MLB ready pitchers they have in the minors.
If, at the end of the 2013 season, Texeira gets another year tacked on to his contract for say $4 million, doesn’t that severely depress his AAV for 2014?
Why would tex agree to a 4m year added to his contract? Things will have gone horribly wrong for the Yankees and Tex if all he is worth is $4m a year when his contract runs out at the age of 36.
You can quibble about the exact number, but the point is whether there’s a number that works for both sides.
I believe Jeter retires if he is not a reasonably good player through 2013. I saw the interview of him saying he’d hang it up if he didnt still believe he could play at a high level. I believe him.
I agree, he’s always said he’d walk away if the game isn’t fun for him anymore. But I’ll also be the first to admit he’s stubborn.
And getting little production on his 14M will make things harder for the 2014 to win. That almost ensures you have to deal off a regular like Martin or Swisher to hit the 189 target.
Whether you think Jeter will use his option or not is irrelevant for what the Yankees will do with Swish and Martin after this year. There is no way he is going to pigeon hole himself and tell the Yankees hes done after the 2013 season. The Yankees have no choice but to move forward as if he is going to exercise his option in 2014.
We can debate what Jeter will do all we want but in any rational discussion you have to plan on Jeter exercising his option. Very few players have walked away from $14m. My opinion is, unless he craters and gets benched like Posada he will exercise that option.
He’d only be walking away from 5M, the option is for 8M with a 3M buyout.
The 14M is what it appears his contract in 2014 would count for in luxury tax calculations, not what Jeter would actually receive.
I am a huge fan of Grandy and Cano, but isn’t the smart thing to do to be willing to let them BOTH go in 2013? INSTEAD Sign Hammels in the 2012 offseason (or whoever). I think doing that would clearly make the team better in 2013, allows you to still stay under the cap in 2014, and then makes them better from 2015 forward (when Cano and Grandy might otherwise be starting to decline, and the Yankees go once again spend like crazy).
Just imagine how suspect this offense would in 3yrs from now:
Gardner
Swisher (I assume you are keeping him)
Tex
Arod (40yrs old)
DH
Grandersons replacement
Martin (I assume you keep him)
Jeter (41 years old)
Cano’s replacement
Who knows who they get for DH. What we do know is if they let Cano and Granderson walk becasue of money, the people filling their spots will not be in the same realm of player, hence they can afford them. Right now there is no one in the minors that seems like they will be ready to play 2b or Of by 2014. So we are looking at free agents, and if we are looking at cheaper FA then Cano and Grandy…We are looking at an outfielder like Swish and who knows what at 2b, most likely a replacement level guy. Thats an absolutely terrible offense.
This. You can’t lose the heart of your lineup over $$ if you’re the Yankees. Getting to the 189 number is mostly about marginal decisions on Martin/Swisher and getting a rookie (preferably two) in the rotation.
my basic point is signing hamels gives you a much better team in 2013, right? And then in 2014 you basically have hamels instead of cano (which may or may not be a wash). And then from 2015 on, you really would have to start worrying about Cano (and Granderson’s decline).
I dont think letting Grandy and Cano walk in the same season is a good move at all. Hamels is not better than either, let alone both. I dont see how the Yankees compete if they were to loose their 2 best offensive players. A lineup without those 2 players would look worse than the Rays line up. Its even possible there is no need for Hamels with CC, Pineda, Hughes/Banuelos/Betences/Phelps/Warren. Last thing I want to be doing is watching a Yankee team that cant score runs, nothing is more boring or frustrating than a bad offensive team.