The New York Yankees and general manager Brian Cashman have a big decision to make regarding Aaron Judge and his arbitration hearing on Wednesday. Cashman is looking to settle at $17 million for Judge after a dominant 2021 season. His 2022 statistics can’t play a role in the contract demands in arbitration, but Judge’s representatives are asking for $21 million, a $4 million difference that could impact the team’s mobility at the trade deadline.
Aaron Judge and the Yankees are still scheduled for their arbitration hearing tomorrow. No sign of progress in talks yet. The Yankees submitted $17M, Judge $21M.
— Jon Heyman (@JonHeyman) June 21, 2022
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The Yankees need to tread carefully as they approach the third luxury tax tier:
The Yankees currently sit at $260 million in total luxury tax payroll allocations, $10 million away from surpassing the third luxury tax tier. If the Yankees stay below the second luxury tax tier, they will accumulate a 32% tax rate, but if they exceed the third tier at $270 million, that tax rate balloons to 62.5%. For obvious reasons, Cashman and owner Hal Steinbrenner will likely want to stay below that number, leaving them with minimal mobility at the deadline either way.
Suppose Judge wins the hearing and lands $21 million. In that case, the Bombers will only have $6 million to make moves, unless they package together multiple players, including one with a significant salary charge this year. However, the value of their big-money players is low, especially since Aaron Hicks and Joey Gallo seem to be the only movable options at this point, given their performance this season.
For example, let’s assume the Yankees target a player like Andrew Benintendi, who is currently on a one-year, $8.5 million deal. If the Yankees are forced to submit to Judge’s demands, they may not have enough cash to execute a trade like this. The extra $4 million makes a significant difference in their flexibility.
The more likely scenario is that Cashman looks to package multiple prospects together in exchange for a player that hasn’t reached six years of MLB service time just yet.
Last year, Judge had a phenomenal season, hitting .287 with 39 homers and 98 RBIs. However, he missed out on most of the major accolades, which could influence his arbitration hearing and the amount that is settled.