Expect the Yankees to stick to $189 million goal by 2014

The Yankees are trying to get their payroll under $189 million by 2014 when the collective bargaining agreement imposes higher penalties for going over. That’s not breaking news, but in an interview with Barry Bloom of MLB.com, team president Randy Levine reiterated their goal.

“We’re going to try and get under the $189 million threshold,” Levine said. “We think we can have a great team and do it. The reason it makes sense is that under the new Basic Agreement, there are tremendous financial incentives to do it. In addition to not paying the tax, there are tens of millions of dollars in revenue sharing rebates that will come back to teams like the Yankees if they stay under the threshold.

“I’m talking about 2014 when the threshold goes to $189 million. Next year’s threshold, we don’t have a chance of achieving.”

Recently a lot of people have been speculating as to whether or not the Yankees will be able to stick with this plan should they miss the playoffs this season. At this point it seems like they’ll at least take home one of the Wild Card spots so that’s not a huge concern. But regardless of what happens it seems likely they will stick to this plan.

The Yankees payroll currently sits at about $209 million for luxury tax purposes. This offseason they will likely see a little more than $70 million coming off the books. A chunk of that will go toward one-year deals for Hiroki Kuroda, Andy Pettitte, and Mariano Rivera as well as raises for the arbitration eligible players like Phil Hughes. But that still leaves them with money to play around with.

They will have to sign a catcher (my guess is that Russell Martin comes back on a one-year deal) and an outfielder to replace Nick Swisher. But aside from Josh Hamilton (whom I don’t expect the Yankees to get heavily involved in) there really isn’t anybody out there for them to spend big money on. ¬†Instead they will probably focus on incremental improvements to the team. If they do spend big money on anybody it will likely be Robinson Cano.

Even the following year, the free agent class doesn’t have anybody who looks like a candidate for the Yankees to throw money at (unless of course you think they’ll go after Jacoby Ellsbury).

It’s probably the reason that Brian Cashman has been so stubborn in avoiding dealing any of his prospects. The Yankees might have the biggest payroll in baseball, but with the league on such even footing where even the small market teams have the ability to sign their players long-term what their money can buy doesn’t pack the same punch as it did.

In the immediate future, if the Yankees are going to get better it will be through the farm system or trades. When they do hit the free agent market it will be for more modest free agents on shorter deals. The years where we see a free agent class with the likes of superstars like CC Sabathia and Mark Teixeira in their prime and ripe for the taking are not coming up soon.

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3 Responses to Expect the Yankees to stick to $189 million goal by 2014

  1. wally says:

    Excellent post, Rob, especially the stuff about the increased importance of the farm. I do think the free agent market will open up again once some of the recent big spenders (Dodgers, Marlins, Angels etc.) realize that like the Red Sox they've wasted big bucks in a post-steroids game where players now decline more quickly. Trades are generally a bad route for the Yankees, as teams were conditioned for years to think Yanks would pay more than others in prospect talent to get desperately needed vet.
    The big question to me is whether this $189M budget is a livable one-year only deal, or management tries to suck out even more revenue sharing gains and extend beyond 2014. Even with good talent coming thru in 2014-15 Yanks will need to sign the big free agent here or there to keep their edge. I think many fans can accept the one-year budget cap. Not so sure they'll go for longer self-imposed cap.

  2. Hardcore Yankee Fan says:

    I agree. Great article. And the Yanks should definitely get under the cap for 2014 at all costs.

  3. Riccardo says:

    I agree that unless Swish has a tremendous post-season, assuming the Yanks make it that far, he will ask for more than he will get in the Bronx. Petite, if he returns, will have to get the semblance of a real salary–unlike this year, so that brings the total higher. Suzuki? Probably a goner unless he takes less than he used to get. I would like to see him stay–there's the right fielder, Gardy in left and Curtis in center, unless someone offers a pitcher who's under contract for a manageable salary. I don't think that will happen, and despite his poor BA this year, he anchors center, which accounts for a lot in that stadium.