The New York Yankees currently sit at $298.2 million in estimated luxury tax salary allocations, but the actual figure may be slightly higher as Jonathan Loaisiga’s contract numbers have not yet been reported. Despite the high payroll, general manager Brian Cashman has employed creative strategies to manage the team’s financial outlook over the next several years.
Max Fried’s Contract Structure Provides Flexibility
The Yankees’ offseason acquisition of Max Fried on a long-term deal demonstrated savvy financial maneuvering. Fried’s contract includes a signing bonus and a backloaded structure, with his luxury tax salary set at just $14.5 million for the first two years before escalating to $31.5 million for the remainder of the deal. This adjustment allowed the Yankees to stay flexible for additional moves during the offseason without significantly pushing past the $300 million luxury tax threshold.
Fried, a former Cy Young candidate, brings top-tier talent to the Yankees’ rotation. The decision to stagger his salary aligns with the team’s strategic approach to managing near-term payroll constraints while preparing for escalating costs down the road.
Contracts Expiring After 2025 Ease Future Burdens
The Yankees are poised to see significant financial relief after the 2025 season. Anthony Rizzo’s $6 million buyout, Aaron Hicks’ $9.8 million salary, and Marcus Stroman’s $18.5 million contract will all come off the books by 2026 (they’ll still owe Hicks $1 million in 2026), freeing up a total of $34.3 million in salary allocations. This upcoming flexibility positions the team to absorb Fried’s escalating salary in 2027 while potentially pursuing new free agents or extending current stars.
Rizzo’s departure opened up the money to sign Paul Goldschmidt and others. Stroman’s deal, which includes a player option if he exceeds 140 innings in 2025, may end naturally if the Yankees manage his workload. Ideally, they can find a trade partner to offload his money and turn to Will Warren as their 6th man in the rotation.
Smart Moves Enable Sustained Competitiveness
Cashman’s strategic structuring of contracts not only addresses immediate roster needs but also ensures sustained competitiveness in the future. By clearing space with Fried’s adjusted deal and positioning significant contracts to expire, the Yankees have set themselves up to remain active in both free agency and the trade market without facing debilitating luxury tax penalties.
This approach highlights the balance between building a World Series contender now and maintaining financial health for the long-term sustainability of the roster.