During last season, New York Yankees owner Hal Steinbrenner had hinted at the idea of lowering payroll, and it seems like the Yankees have done just that this offseason. They failed to sign Juan Soto after just one season, and they have made just a handful of free agent signings as a result, with pitcher Max Fried being the most lucrative at $218 million for eight years.
The Yankees have lowered payroll this winter
Quoting CBS Sports’ Mike Axisa, Bobby Milone on X posted that the Yankees have significantly trimmed down their payroll to just north of $300 million this offseason.
“Updating, they are at $300.58M in luxury tax payroll for 2025. The Yankees finished 2024 with a $316.2M luxury tax payroll. If they come in under that, they will be the first pennant-winner to lower payroll since the Rays trimmed $68,830 off payroll from 2020,” Axisa wrote (h/t Bobby Milone on X).
The Yankees are paying a lot of money to players in luxury tax funds, with Aaron Judge costing the most at $40 million, per Spotrac. New York does still have some money they are trying to get off the books, especially Marcus Stroman’s $18.5 million.
They also have $15 million attached to D.J. LeMahieu, a player who has seemed to lose his starting spot after a horrid 2024 season. It is unclear how much more active they will need in both free agency and the trade market, but it is evident that they intend to shrink their payroll and not go over the $301 million luxury tax mark.
The Yankees are trying to move off of some bad contracts before making other moves
Along with signing Fried, they signed Paul Goldschmidt for $12.5 million for one year and traded for outfielder Cody Bellinger. New York will take on roughly $22 million of his original contract with the Cubs and pay $24 million in luxury tax. If they want to continue shedding payroll, they will have to move off of Stroman and/or LeMahieu’s contracts before making another addition.
Nevertheless, it appears that the Yankees are looking to replace Soto in a cheaper way as opposed to shelling out all of their financial resources in hasty panic moves. Typically, contending teams don’t lower their payroll, and historically the Yankees are not ones to make themselves inferior to other teams in terms of payroll.
However, in this day and age, the market moves differently, and the Yankees are trying to be strategic with their plans while also ensuring that they are fielding a competitive roster next season.