Contracts, Opinion Pieces

The Empire Will Strike Back

For the better part of my childhood, the so-called “greatest rivalry” in sports was really nothing more than a four-hour arm wrestle between two AL East powerhouses that would temporarily be granted bragging rights in bars across the Northeast.  Not only do the two clubs have the most passionate (and obnoxious) fanbases in the country, the palpable jubilation and nervous excitement that permeates throughout the yard during these rivalry series are truly what baseball is all about.

The raucous behavior sincere disdain that these two fan bases have for each other was a fixture during the early 2000s when it seemed as if these two behemoths would square off every October. After the Red Sox came back from down three games to none back in 2004, the two teams had to wait nearly fifteen years to meet each other again.

Much has changed since those early 2000s showdowns — ALCS hero Aaron Boone is now the Yankees manager, both teams are largely built off homegrown talent instead of expensive free agents, and the Yankees now play their home games at an entirely different field. While baseball continues to evolve, the one enduring constant is the most historic rivalry in all of sports: Red Sox vs. Yankees.

Despite the hype and excitement of a long-awaited rematch between the two clubs, the serious was mostly one-sided. The 108 win Red Sox had a blip in Game 2 but outscored the Yanks 20 to 8 the rest of the series.

After an early first-round exit for a franchise that is permanently in “World Series or Bust” mode, this was a disappointing end to a season that saw the Bronx Bombers win 100 games. Despite breaking the all-time home run record and becoming the first team in MLB history to have its relievers strikeout upwards of 30% of the batters they faced,

Unfortunately, the Yankees power dependent, bullpen-based roster failed to overcome the 108 win Red Sox as the strengths that got the Yankees to the playoffs were nowhere to be found in the division series. After finishing the regular season with the best OPS in baseball during the regular season, the offense faltered to the tune of a .669 OPS. While the bullpen marched out their parade of flamethrowing, lights-out relievers like expected, Aaron Boone often turned to them an inning or two too late. Most people in the baseball world are still perplexed by his decision to allow middle-of-the-rotation starters C.C. Sabathia and J.A. Happ to fight through their early struggles with an array of firemen waiting to be called on in the bullpen. Whatever his errors, Aaron Boone’s job is safe and he will be more prepared to avoid these snafus the next time around.

For a franchise that has the highest expectations in all of sports, anything short of hoisting the World Series trophy is regarded as a disappointment, but as the club pivots towards 2019, we can expect ownership to empty the bank in order to turn a 100 win team into an absolute powerhouse.

While improving upon a team coming off a 100 win season is usually no small task, New York has carefully devised a plan to give themselves more financial flexibility this offseason than just about any other time in a history defined by aggressive spending.

At season’s end, the Yankees payroll is only 179.6 million dollars right now, a figure that stands well below the luxury tax. The Yankees deliberately widdled their team salary to unburden themselves from the exorbitant repeat offender tax penalty. Due to their MLB-ready young talent, they were able to shred significant payroll by employing pre-arbitration youngsters that performed well enough for the club to not lose any on-field production in the process. While the media fixated on the emergence of the “Baby Bombers” amazing rookie seasons, the rapid rise to stardom for guys like Gleyber Torres and Miguel Andujar had implications that look to shape the offseason in New York. When free agency opens up on November 2nd, Brian Cashman and company will have seemingly free reign to enjoy a near tax-free splurge on whichever players they choose.

The near unprecedented financial flexibility is aided significantly by the additional money that is set to be freed up when the contracts of nine impending free agents come off the books to test the market.

Below is a list of free agents that could very well be leaving New York:

Exiting Salary from 2018 to 2019:

Player 2018 Salary 2018 WAR
Brian McCann* 5.5 million 0.0
Chase Headley 500,000 0.0
Neil Walker 4.0 million 0.1
CC Sabathia 10.0 million 2.5
Lance Lynn 2.0 million 2.1
Zach Britton 4.4 million 0.1
David Robertson 13.3 million 1.5
JA Happ 4.6 million 1.1
Andrew McCutchen 1.3 million 0.8
Total: 45.3 million 8.2 WAR

You may be curious to see Brian McCann’s name on that list considering he has not been with the club for two years. The reason he is still on the Yankees’ books was part of an agreement in the trade that sent him to Houston in the offseason between 2016 and 2017.

The Yankees also had to pay Chase Headley half a million for similar reasons. This spring they traded Headley and 12.5 million of his 13 million contracts to the Padres as a part of a mutually beneficial salary dump that netted San Diego right-handed pitcher Bryan Mitchell.

Unfortunately, payrolls are not just a simple calculation of salary in and salary out. Reaching a total payroll figure for a given season is a complicated process that involves arbitration hearings, contract restructurings, and any additional salary when veteran non-roster invitees break spring with the club.

Of these additional payroll considerations, the arbitration process is the most consequential in regards to its impact on the final payroll. Due to the youth movement in the Bronx these past couple seasons, there are several players that are set to reach arbitration for the first time.

Below is a list of the Yankees arbitration-eligible players and the  bonuses they are set to receive:

Schedule Arbitration Raises:

Player 2018 Salary / Estimate 2019 Salary Estimate Change
Didi Gregorius 8.5 million 12.4 million 3.9 million
Sonny Gray 6.5 million 9.1 million 2.6 million
Dellin Betances 5.1 million 6.4 million 1.3 million
Aaron Hicks 2.8 million 6.2 million 3.4 million
Luis Severino 0.6 million 5.1 million 4.5 million
Austin Romine 1.1 million 2.0 million 0.9 million
Tommy Kahnle 1.3 million 1.5 million 0.2 million
Greg Bird 0.6 million 1.5 million 0.9 million
Ronald Torreyes 0.6 million 0.9 million 0.3 million
Total: 27.1 million 45.1 million 18.1 million

**All arbitration projections are provided by MLB Trade Rumors.

Tacking on another 18.1 million to the Yankees payroll pales in comparison to the 45 million dollars they will be able to let go this season. Additionally, there could be some non-tender candidates in this group such as Sonny Gray, who is set to receive the second highest arbitration figure on the team this upcoming offseason. Coming off the worst season of his career, it is not unthinkable that the Yankees front office would elect to package him with another prospect and deal him elsewhere in a Bryan Mitchell-type exchange.

With departing salaries and arbitration raises all factored in, the Yankees payroll, as it currently stands, is approximately 163 million. All along, the Yankees intent in shedding payroll was to get under the luxury tax so they would not be penalized as repeat offenders. Not only did they achieve this goal, but they did it by nearly 40 million dollars. This means at the bare minimum, Brian Cashman can dole out 40 million dollars in annual salary before even starting to worry about tax penalties. If the Yankees do feel the need to exceed 206 million (the first tax threshold), they are still first time offenders and will only be required to pay the minimum 20% on each dollar that they spend over the tax.

In other words, because the Yankees opted to develop their prospects and build their current core through player development instead of through multi-million dollar free agent deals, they are now in the position to supplement their existing pre-arbitration future stars with players who already hold that distinction.

In the most likely scenario, the Yankees will spend somewhere between 40-60 million this offseason and happily pay the rather inconsequential tax on their overages. However, it is also totally possible for the front office to put all their chips on the table and spend upwards of 80 million dollars, accepting the 62.5% overage tax in the process. After all, they have carried payrolls like that before and after losing to their rival Red Sox in four games during the ALDS, they may be extra motivated to build an unstoppable juggernaut in 2019.

So let’s just say the Yankees took a more moderate approach and raised their payroll by roughly 40 million dollars in annual salaries for the upcoming season. What would that look like? The most obvious move, and at this point it almost seems like a foregone conclusion, would be to sign Patrick Corbin. Not only is Corbin a native New Yorker who grew up as a Yankee fan, but he is also coming off a career year and would slide into the top of the Yankees rotation from day one. While early contract predictions are generally inaccurate, the industry consensus suggests that the 29-year-old southpaw will receive somewhere just upwards of 20 million a year.

With the addition of Corbin, the Yankees rotation would consist of Severino, Tanaka, Corbin, Sonny Gray (?), plus any of the electric arms in their farm system which includes Domingo German, Jonathon Loasiga, Justus Sheffield, Albert Abreu, Domingo Acevado, or Chance Adams. Even Luis Cessa, who has been a very reliable spot starter in the past could provide the club with reinforcements if needed. The same can be said about Jordan Montgomery if he is able to come back healthy.

With roughly 20-25 million spent on Corbin (I would assume the contract would be at least slightly front loaded so if they exceed the tax threshold this year, they will run less of a risk to be repeat offenders next season), the front office could set their sights on the man who just about everyone in baseball has assumed was going to end up in pinstripes the moment the Orioles recognized that they could not resign him. That man is Manny Machado.

For years, analysts have speculated about what type of contracts Machado and fellow free agent Bryce Harper would receive. Some of even estimated that we could see the first 500 million dollar deal in the history of professional sports. Let me tell you right now, that will not happen. While it is true that both players are entering free agency in the middle of their primes, have remained mostly healthy, and would instantly be the face of whichever franchise acquires them (except the Yankees, its hard to have a face of a franchise with that many superstars).

Despite the stars aligning for Machado to sign a record-breaking deal in the offseason, I believe his offer sheet will be less ludicrous than some expect. As we saw last offseason, MLB teams are growing increasingly reluctant to offer exorbitant contracts to a single player at the risk of sacrificing their financial flexibility to improve elsewhere on the roster.

With that said, I expect Machado’s deal to fall far short of the 400 or 500 million dollar deals that some have projected. I believe a more modest estimate is somewhere in the 8 years, 300 million dollar range with at least one opt-out along the way. It is hard to fathom that predicting a deal in which a player’s annual earnings is 37.5 million would be considered a light projection, but Machado is a generational talent and I believe he truly wants to be a Yankee.

While Machado has been linked to the Bronx Bombers for what seems like years now, recent events surrounding Didi Gregorious Tommy John surgery makes a move for Machado far more likely than it once was. With Gregorious not returning for the better part of a season in which he will become a free agent at year’s end, the Yankees are in desperate need of a replacement at the position.

Aaron Boone will certainly have his hands full trying to fill out his lineup card, especially considering Andujar’s defensive ineptitudes and Machado’s poor performance at shortstop this season. If they decide to run out both players on the left side of their infield, the Andjuar / Machado tandem has the potential to be disastrous. Perhaps a more logical solution would be to move Torres to shortstop, put Manny at third base (where he was formerly a perennial gold glover), and shuffle Andujar between first base and DH.

Regardless of the problems that the positional crunch might cause, you can’t miss an opportunity to add one of the best players in the game to an already star-studded lineup.

After signing both Patrick Corbin and Manny Machado (at prices I estimated based off a few articles), the team’s payroll would sit right around 217.5 million, which would them right below the first surtax. Just a few years ago, the Yankees carried a payroll of 265 million, so even after adding the top hitter and pitcher on the market, it’s possible that the club could continue spending.

Any additional free agent acquisitions would likely come in the form of one-year deals, so those players don’t hurt them as they try to navigate their cap situation next season.

After perusing the free agent market for possible additions that could help round out their roster, there are a few names that could supplement the Yankees without hurting their bottom line.

Despite having an unbelievable amount of starting pitching depth waiting in the wings, the vast majority of them are high octane, high effort, flamethrowers that could either become the next Luis Severino or implode entirely. If the Yankees could sign a veteran innings eater on a cheap one year deal, it could go a long way towards stabilizing the back end of their rotation. I think Anibal Sanchez, Trevor Cahill, or Wade Miley could all be nice additions to add some extra rotation insurance.

Other than starting pitching depth, the Yankees needed to acquire a serviceable utility man after the Neil Walker experiment failed miserably. I think Aaron Boone would be delighted if the Yankees were able to find someone who could provide some defensive help on the left side of the infield and even occasionally make a start in the outfield. By far the top utilityman available is Marwin Gonzalez, but he will be in high demand which would force the Yankees to look elsewhere. Other utility types that could serve a similar role include Sean Rodriguez or Daniel Descalso, but if the price tag is too high for any of these three players, they may want to just settle for someone in-house to fill this role.

While the Yankees playoff run was short-lived and ended in agonizing fashion as they watched their rivals celebrate on their home field, their future still remains bright. With one of the best farm systems in baseball, a plethora of major league talent, and an ownership group that is not afraid to empty the bank, the 2019 Yankees have the potential to be the best team in baseball.

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About Traven Tapson

I am a recent graduate from Claremont McKenna College pursuing a career in baseball operations for an MLB team. I am fascinated by the analytical side of baseball and use this blog as a platform to share my insights and knowledge with those who share my curiosities.
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