If the Yankees miss postseason, will they still reduce payroll? Ken Rosenthal explains.
By Ken RosenthalFoxSports
Here’s the New York Yankees’ problem, and it goes well beyond the threat posed by the run differential-defying Baltimore Orioles and the dollar-defying Tampa Bay Rays.
If the Yankees fail to reach the postseason, it could wreck The Plan.
The Plan, if you haven’t heard, is for the Yankees to reduce their payroll below the $189 million luxury-tax threshold by 2014.
The Plan, motivated by a series of provisions in the new labor agreement, is intended to save the Yankees tens of millions.
And The Plan, according to Hal Steinbrenner, the Yankees' managing general partner, is non-negotiable.
“I’m looking at it as a goal,” Steinbrenner told reporters in spring training, “but my goals are normally considered a requirement.”
Well, let’s see the Yankees stick to that goal if they fail to reach the postseason.
Let’s see them go two more offseasons without spending like the George Steinbrenner Yankees. Let’s see them make their old guys younger, and their young guys worthy of their considerable hype.
A fine mess this could be — a different kind of mess than the one created by the Boston Red Sox, but a mess nonetheless.
Heck, a fine mess it already is, considering that the Yankees led the AL East by 10 games on July 18 and fell into a first-place tie with the Orioles on Tuesday night.
I’m not convinced that the Yankees are going to blow a playoff spot, even as their age/injury concerns mount, even though Jayson Nix, Chris Dickerson and Chris Stewart were their 7-8-9 hitters on Tuesday night with sole possession of first place at stake.
Yet, even if the Yankees qualify, it’s difficult to imagine them winning the World Series. Too many of their players are compromised physically and/or experiencing some degree of decline. And the trend certainly doesn’t figure to reverse in the coming years.
Granted, several of the injuries to the Yankees’ older players were freakish, and maybe it’s just one of those seasons, seeing as how some of their younger players also were hurt.
But going forward, you wonder.
To make The Plan work, the Yankees need to incorporate a greater number of young (read: inexpensive) players. Entering spring training, they envisioned a 2014 rotation that included three pitchers who fit that description — right-hander Ivan Nova, righty Michael Pineda and lefty Manny Banuelos.
Now, club officials can’t be sure that any of those pitchers will be part of the long-term solution, and most of their top position prospects are in the low minors.
Nova regressed before going on the disabled list with right shoulder tightness. Pineda required shoulder surgery that will force him to miss the entire season. Banuelos was shut down in May due to a bone bruise on his elbow, while the Yankees’ other ballyhooed pitching prospect, righty Dellin Betances, recently was demoted from Triple A to Double A.
Maybe there is no reason to panic – Pineda and Banuelos are expected to be healthy by spring training. Still, The Plan could take a serious hit if the youngsters fail to meet expectations, particularly when the team’s ace left-hander, CC Sabathia, might be starting to fade. Meanwhile, most of the Yankees’ top position prospects are in the low minors.
Remember, the Yankees acquired Pineda and refrained from spending on free agents such as C.J. Wilson and Mark Buehrle last off-season in part because of their concern about the 2014 payroll. By getting under the luxury-tax threshold, they not only can avoid paying the penalty, but also reset their tax rate to 17.5 percent from a potential 50 percent and qualify for revenue-sharing rebates – rebates that can multiply if they stay under the threshold from ’14 to ’16.
Those, no doubt, are powerful incentives, but I’m not sure Yankees fans will want to hear about the team’s austerity program if the club suddenly becomes less competitive.
Here’s the kicker:
Even if the Yankees abandoned The Plan and again chose to spend big, they would be hard-pressed to put together an elite rotation unless they made like the Los Angeles Dodgers and swallowed other teams’ bad contracts.
The best potential free agents — Philadelphia’s Cole Hamels and San Francisco’s Matt Cain — already have re-signed with their respective clubs. The Los Angeles Angels’ Zack Greinke likely will be the only impact starter on the market, but the Yankees have never considered him a good fit for New York.
The free-agent class of 2013-14 could be just as thin, and the top eligible starters in 2014-15 – Seattle’s Felix Hernandez, Detroit’s Justin Verlander and the Dodgers’ Clayton Kershaw – aren’t necessarily going anywhere. New local and national TV deals are injecting big money into the game, enabling clubs to keep their stars.
Thus, at a time when the Yankees finally are starting to show their age, they soon could face a more level playing field due to changes in both the labor agreement and the game’s economic landscape.
Sure, the Yankees could hold down their luxury-tax number by trading for low-salaried players under long-term contracts (baseball uses average annual values in its luxury-tax calculations). The Yankees also could continue patching holes by signing veterans to modest one-year deals.
But eventually — and maybe even this season — the erosions of older stars such as Sabathia, third baseman Alex Rodriguez and first baseman Mark Teixeira might be too much for the Yankees to overcome.
As first reported by Joel Sherman of the New York Post, Rodriguez, Sabathia and Teixeira will account for $74.4 million in luxury-tax dollars in 2014. Shortstop Derek Jeter, who has a player option in ‘14, will account for at least $8 million more.
Extending the contracts of second baseman Robinson Cano and center fielder Curtis Granderson likely would cost more than $30 million annually. Factor in another $10 million that every club is charged for insurance, pension, etc., and the Yankees would have less than $70 million to play with, if they intended to stay under $189 million.
They could justify such a squeeze if the team remained strong, telling fans that they were adjusting short-term with the idea of spending heavily again once The Plan delivered its expected windfall.
But if the Yankees miss the playoffs, a shift in strategy might be warranted.