New York Yankees News: With signings done, where do the Yankees go from here?

New York Yankees, Luke Voit, DJ LeMahieu

The New York Yankees made big waves in the baseball world this week. They achieved their number one offseason priority re-signing DJ LeMahieu, and they did it for less than they thought it would cost them annually. In turn, they gave LeMahieu a six-year deal that will likely carry him into retirement. Because of the annual money they saved, they were able to jump on a deal they had been negotiating and signed two-time Cy Young Award winner Corey Kluber to a one-year $11 million deal, strengthening a pitching rotation that lacked any veterans behind ace Gerrit Cole.

This reporter believes that those expenditures will pretty much do it for the Yankees unless they can pick up a quality reliever relatively cheap. That’s not to say that there won’t be more additions to the team, but if there are they will likely be by the way of the trade. For instance the New York Yankees have shown and interest in Luis Castillo who is with the Cincinnati Reds. That could be accomplished by the Yankees giving up probably three prospects in order to bring Castillo to Yankee Stadium.

According to Roster resource the Yankees payroll stands at $201 million with the signing of both LeMahieu, Kluber and the arbitration raises. The Yankees luxury tax ledger is estimated at just over $207MM. Add to that Yankee owner Hal Steinbrenner said earlier in the offseason that he want to stay below the threshold of $210MM. With that in mind and the acquisition of Kluber it pretty much precludes the Yankees from bring back pitcher Masahiro Tanaka that just finished his stint with the Yankees.

If they chose to spend the remaining money they do have enough to bring back the veteran Brett Gardner or pick up a low priced middle inning reliever and still stay below the threshold. However, there is another possibility, that the Yankees actually find a perfect fit for the team and chose to go over that limit, which is unlikely with still not having a clear picture of what the 2021 season will look like financially.

The New York Yankees and all the other MLB teams know that the league will try to complete a 162 game season. It is also known that MLB will allow fans in the stands this season. However, the final say on that is in the hands of the local health or government officials. The more games MLB plays without fans in the stands, the money those teams will lose. At the present moment New York state is banning large gatherings in venues. Although Governor Cuomo of New York did allow limited fans in the stands for Buffalo Bill’s games.

Assuming the coronavirus vaccines are successful most teams will have at least a limited amount of fans to create revenues and reduce costs. The Players Union (MLBPA) has made it clear that they want players paid for the full 162 games season whether there are fans in the stands or not.

Didi’s Shots at Cashman Show Where the Yankees Priorities Have Been for Years

New York Yankees, Yankees, Brian Cashman

It seems like the Philadelphia Phillies are becoming the place where New York Yankees of the 2010’s reunite. Joe Girardi, Andrew McCutchen, David Robertson (recovering from Tommy John surgery), and Didi Gregorius. But it’s what Didi said about Brian Cashman that has Yankees fans in a tither. However, simply reinforces where the Yankees have been the last 5-8 years.

The Yankees Still Worry About the Luxury Tax

I’ve talked about how the Yankees were going to be a stronger team resigning Didi. But justifying resigning Didi was complicated. Didi did have a bad season, but you could just as easily chalk up his poor performance to his recovery from Tommy John. His struggles in August and September can be attributed to a usual mid season slump (his season didn’t start till June, remember?).

But resigning Didi was going to push them even closer to passing that third tier of the luxury tax. Resigning Brett Gardner, on top of signing Gerrit Cole to his contract (a necessity) are bringing the Yankees precariously close to crossing the $248 million third tier, forcing them to pay an extra 42.5% on every dollar spent on salary passed $248 million. The Yankees are doing everything that they can to avoid this. And resigning Didi was going to be more than $10 million, which unquestionably would have set them over the top.

So The Yankees Are Making Moves That Make Sense… for Them

I’ve written about how the Yankees are a better team keeping Gleyber at second, numerous times.I argue that the best thing they could have done was resign Didi, to keep their double play team together. But they didn’t want to spend the $10 plus on a deal for Didi that wasn’t the $17 million qualifying offer. It was also another way for them to save one of their draft picks.

They’re also now trying to move Happ to “soften the blow” of Cole’s contract. Not to toot my own horn, but this goes back to the Yankees offering the big contracts to the wrong players. That $17 million/year, 3 year deal was money you COULD have given Didi and Cole.

Hopefully this is the final year the New York Yankees make crazy decisions based on the luxury tax. Here’s hoping the CBA moves the threshold up even higher than it is.

What Gerrit Cole Means for the New York Yankees Luxury Tax

New York Yankees, Gerrit Cole

Remember when I asked whether the luxury tax or championships were more important for the New York Yankees front office? Well, they just showed that they have no problem going all-in on the RIGHT piece missing from the puzzle. 

So what does Cole mean for the Yankees and the luxury tax?

The luxury tax for 2020 is $208 million. But going $40 million past the $208 million results in being taxed at 42.5%. The Yankees will also have their highest pick in the Rule 4 Draft drop 10 spots getting there.

Going into signing Cole, the Yankees were sitting at $199,228,571 in total payroll. Tack on Cole’s salary, which puts the Yankees at $235,228,571. Gardner is going to get resigned, and so will Betances (in all likelihood). That will result in the Yankees crossing the $240 million thresholds right there. And they will be adding more payroll through trades because… well, they always do. It’s not a matter of if, it’s a matter of when they cross that $248 million thresholds.

Why They Can Afford It

In 2018, the Yankees were a 100 win Wild Card team that was eliminated in the ALDS. The team made $668 MILLION in gross revenue but spent a paltry 29.8% of that on the payroll. The Yankees were division winners for the first time since 2012, winning over 100 games, and made it to game 6 of the ALCS. It’s not unrealistic to assume that they will make $800 million in total revenue.

Then there’s the money the Yankees generate whenever Yankee Stadium plays host to NYCFC home games. And the concerts that they’re hosting as well. And the licensing revenue from MLB certified jersey and hat sales. And the money the Yankees get in licensing for the trademarked Yankees logo being featured in ad campaigns. And the ad revenue generated from YES broadcasts. And…

I still feel more than justified giving the front office grief for arguing “the luxury tax” for keeping this team one rung down from the next level. They’ve ALWAYS been able to afford this. It’s the price of being the New York Yankees

Yankees: What’s More Important, Championships or the Luxury Tax?

New York Yankees, Brian Cashman

If you’re a member of the New York Yankees millennial fanbase, you have seen a level of success unparalleled since 1936-1962. In those 26 years, the Yankees won 16 championships. Now, we’ve won considerably fewer championships, but you can’t deny 21 postseasons in 24 years, 7 wild cards, 14 American League East titles, 7 pennants, and 5 championships is an impressive feat.

But the Yankees have had difficulty finding long-lasting success in October since the last championship run of 2009. 2010 through 2012 saw them getting bounced from October by the Detroit Tigers, resulting in Derek Jeter’s ankle-breaking in the 2012 sweep by the Tigers. The Yankees then missed the playoffs in 2013 and 2014, to come back and lose the Wild Card game to the Astros. 2016 resulted in another missed October. Then we saw what happened these last 3 seasons.

During this stretch of the 2010s, we kept getting one set of lip service from the Yankees front office, specifically Hal Steinbrenner and Brian Cashman. “We’re aiming to win championships, but want to stay below the luxury tax.”

We’re the New York Yankees. We’re the reason the luxury tax came into play!

Yes – Spending Money Improves Your Championship Chances

There were two teams to beat the last decade in October. The San Fransisco Giants and the Boston Red Sox. The Giants won 3 titles in 5 years, and the Red Sox won 2. In 2010, the Giants salary payroll was $97 million. By 2015, after they won their 3rd title, it had jumped up to $172 million. Why was this? Well, it can largely be attributed to the Giants trying to keep their core together since that 2010 run. Conversely, the Sox were the team with the 4th highest payroll in baseball in 2013, when they won and had the highest salary in baseball when they won in 2018. Even the Astros and Nationals were in the top 10 in terms of salary payrolls for 2019 (stevetheump.com).

This has more to do with the fact that these two teams knew they had to spend money to give them the best chance at winning. And they spent money on the players that they knew they needed moving forward. Considering how spectacular Madison Bumgarner was in 2014, if you’re the Giants, you pay him what he wants, so he stays. For the Red Sox, you want to beat the Yankees? You go out and sign pitchers who have the best stuff against the Yankees. And that includes David Price AND Chris Sale.

But Is It A Viable Model?

There are obvious drawbacks to this school of thought. Age and injury play a big part in these contracts that determine whether or not the deals are viable. And the Yankees in the last decade have had the opportunity to make the prudent call in signing some of the contracts they signed, but they didn’t. And they ended up looking foolish.

Case one against the Yankees “quest to stay below the luxury tax but put a championship-caliber team on the field,” Jacoby Ellsbury. 

Ellsbury had a noted history of injury before signing with the Yankees. In 2010, he played 18 games due to injury. In 2012, he played in 74 due to injury, and in his final season in Boston, their 2013 championship run, he played in less than 140 games. Which means he missed a good chunk there due to injury. In his time since coming to the Yankees, which was 6 years ago, he’s played in approximately 57% of all possible games. This includes the fact that he’s missed the last 2 seasons, and was benched by Girardi during one of his previous playoff appearances.

Case two against the New York Yankees, signing Carlos Beltran.

Beltran was the most absurd signing the Yankees could have made. Giving a 37-year-old, with horrible knees that reduced his mobility, a 3-year contract to go out there and play right field?! I remember watching in disgust as Beltran just stood there, listlessly, in right field as he watched Ellsbury crash into the wall trying to chase down a fly ball. And it wasn’t until after the ball was bouncing away, that Beltran made his break for the ball. That resulted in an inside the park home run. And, yes, the Yankees signed Beltran to play right field. Of his 334 games he played as a Yankee, Beltran spent 143 of those games in right field. You don’t sign a DH and have him play 43% of his games in a position that weakens the clubs chance to win. And this was a $45 million contract the Yankees signed him to!

There were more egregious cases than just these two. And while they were signed before 2010, it did complicate the Yankees in the 2010s. I loved Mark Texiera as a Yankee, but good lord. That contract ended up being a massive albatross as he got older and couldn’t stay on the field anymore. CC Sabathia’s contract was a similar money pit, even though I wouldn’t trade what he accomplished as a Yankee for the world. And then there was A-Rod’s contract.

Why would you give a 31-year-old a 10-year contract worth $275 million? Even Masahiro Tanaka’s contract is starting to look suspect. He’s yet to crack the top 5 in Cy Young voting. His pitching elbow can go at any minute, he’s been in the top 20 for the American League in home runs allowed the last three seasons, and has an ERA dancing around 4.00 during the previous three seasons. And he’s been getting $20+ million per season!

At 31 years old, I think Tanaka has to think about moving to the bullpen if he wants to stay an effective pitcher for the Yankees moving forward. And now the Yankees gave a guy who averaged playing 95 games per season, his whole career, a 7-year contract (Aaron Hicks). And really? You HAD to trade for Giancarlo Stanton and his behemoth contract?

What’s this about staying under the luxury tax?

Why The Luxury Tax Quest Will Hurt Us in 2020

Now it’s highly suspect we’ll let Didi sign elsewhere, to slide Gleyber over to shortstop. This is a mistake.

Gleyber’s sample size defensively in the majors is small, but it’s pronounced. Gleyber Torres is a MUCH better defensive second baseman than he is at shortstop.

In his career, Torres has a major league fielding percentage of .969 at second, and a career .954 fielding percentage at shortstop. His career range factor at second is 3.75 compared to 3.42 at short, meaning YES! He covers more ground at a new position rather than his “natural” position. And this includes the fact that Gleyber spent MORE time playing shortstop last season than he did second base (77 appearances at short compared to just 65 at second). And part of the reason why Didi will be passed over is that the qualifying offer would work too much against the Yankees luxury tax.

What’s going to happen when Gary Sanchez AND Aaron Judge both need new contracts by 2023? Are we going to let one of them walk? I already made the case that Sanchez is on pace to have a Hall of Fame career. Judge is just too good to let walk! Gio Urshella will be owed money by then, also, as will Miguel Andujar and Gleyber Torres. 

What made the dynasty of the 90’s so consistent was the fact you had the SAME core of players on all those teams. O’Neil, Martinez, Jeter, Brosius, Williams, Posada, Pettite, Rivera, and Knoblauch. The core of Gregorius, Judge, Torres, Voit, Andujar, Sanchez, Severino, and Betances (another 2020 free agent) is a team that wins. We saw what this group is capable of over the last two seasons, and they’re just hitting their stride as a cohesive unit. Do you think the Giants would have been as successful as they were without Bumgarner, Posey, Sandoval, and Pagan at a bare minimum? Of course, they wouldn’t have been!

This is a team that needs to be reinforced with better starting pitching and a reevaluation of the bullpen. That means that Hal and Brian need to open the checkbook and go over that luxury tax. Moving Gleyber to short would be detrimental to his development as a player. Gardner will be willing to take a team-friendly discount for a one year deal in 2020 because he wants to stay a Yankee (and they need him in center). Didi has shown he’s worthy of a deal comparable to other elite shortstops in baseball with his regular-season and postseason performances (even Derek Jeter struggled in a few postseasons). A tag team of Urshella and Andujar, with one of them getting a chance at first to help rest Voit and DJ is more security at the corners than the Yankees have had in a long time. 

Besides, the Yankees made $668 million in revenue last year as a 100 win wild card team that got eliminated in the ALDS. They were a 100+ game-winning division champion who got to game 6 of the ALCS while blowing past the record they set for most home runs as a team in 2018. They will have made closer to $1 billion this 2019, mark my words. They can afford to pay the luxury tax. And they should.

It’s a championship or bust, remember? Clearly what Hal and Brian have been doing hasn’t been working. It would be insanity if they stuck with that plan moving forward into the 2020s. Because by the standard of the Yankees organization, it was an abject failure trying to field a championships caliber team while staying under the luxury tax in the 2010s.