Yankees Payroll and increasing Flexibility

Using this data and a post on r/nyyankees I decided to write a bit on why the Yankees are where they are and what teams they will have to compete with over the next few years for Free agents:

I believe that this has been brought on mainly by the Luxury Tax thresholds and the rules that were in place at the time.

Basically if you spent x amount of years above it your rate kept going up. So at one point every incremental contract was accompanied by a 50% increase because of the luxury tax. Yes they are the Yankees but they did not want to be paying that much in total (so even though payroll was higher than other teams, their actual payroll costs were way higher because of that luxury tax rate)

Because they had a self-imposed cap long term to get under the luxury tax threshold in order to re-set the cap. Once you spend a year under the luxury tax your rate would go back to 0. Then you can go over the luxury tax again.

They have recently changed the luxury tax rates and thresholds in the latest negotiations.

so what does this mean? I think that they took a long term look to reset the rate and will spend again like one of the highest spending teams.

Obviously they want to go after Harper and/or Machado in 2018 and then will have to resign Tanaka if/when he opts out. They may even go after Arrieta but I don’t think that is the best fit, based on his regression last year but this year may reset his market higher.

Some competitors for free agents:

The Dodgers are starting to take another look at their payroll and have made an effort in the last two years to decrease that long term. They are in LA and will have a high payroll because they have the money, but after bringing Friedman over from TB they are looking to manage their payroll more.

The Tigers have a lot of bloated contracts that they are trying to get rid of and is inhibiting their chances to resign their own Free Agents. They lost Scherzer because of this. Verlander has regained form but still has a lot of term and money on his contract. Miggy Cabrera is amazing, top 5 player IMO still, but is signed to 2023 with 2 vesting options that could extend that contract out to 2025.

The Nats are always in play. Starting with the Werth contract they have established themselves as spenders. I’m sure they will try to resign Harper but even he may be out of his price range.

Mets: HAHA

Boston: Oh the dreaded rival, I think they are pretty content right now with their team are right on the luxury tax level. Porcello contract has worked out but the Price contract is yet to be seen, basically how injured Price is (I know they are saying he’s fine but we’ll see) will determine how that contract looks. They will have to pay Betts, Bennitendi, Bogearts, so I see them more spending money on their own guys than going after free agents.

Toronto: still trying to get back to the World Series they look like they have the market and money to spend.

Baltimore/TB: won’t be huge spenders. Baltimore will try and resign Machado but I think he’ll test FA. TB is a bargain team. That takes care of all the AL east teams, which I forecast the Yankees to spend the most out of over the next few years.

The Cubs will need to take care of their own guys, they have Rizzo locked up but they need to take care of Schwarber and Bryant over the next 3-5 years plus the Heyward contract may be cumbersome.

I think that the times have changed but not completely, the Yankees will still go for major free agents, as they are gearing up to spend in 2018. Really the big issue was getting under the luxury tax threshold.

 

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