The State of the Yankees Budget Revisited

Recently, my brother wrote a very well researched and stringently fact checked article about the state of the Yankees budget.  As we all know, the Yankees are trying to get their payroll under $189 million by 2014.  This year the payroll sat at just under $210 million.  The problem is that the Yankees were at $210 million with a lot of cost controlled contracts.  For example, Swisher made $10.25 million, Granderson made $10 million, Kuroda made $10 million, Pettitte made $2.5 million, and Ibanez made $1.1 million none of which will be coming back next year without a pay increase, or in the case of Swisher, probably won't be coming back at all leaving a hole in right field with no immediate farm options to replace him.  Despite the pay increases, there are a number of contracts coming off the books:

Mariano Rivera - $15 million
Nick Swisher - $10.25 million
Hiroki Kuroda - $10 million
Russell Martin - $7.5 million
Freddy Garcia - $4 million
Pedro Feliciano - $3.25 million
Andy Pettitte - $2.5 million
Andruw Jones - $2 million
Raul Ibanez - $1.1 million
Eric Chavez - $0.9 million
David Aardsma - $0.5 million

Some contracts that call for a pay reduction for next season:

Alex Rodriguez - $1 million

And some contracts that God willing, will be opted out of:

Rafael Soriano - $14 million

Assuming all of these things come to pass the Yankees will have $72 million coming off the books.  However, this is offset by some pay raises:

Derek Jeter: $1 million raise
Robinson Cano: $1 million raise
Curtis Granderson: $5 million raise

And of course 7 or so arbitration eligible players who made a combined $14.2 million this year, and will get a pay bump for next season.  The Yankees can limit how much goes to arbitration eligible players by dropping some under performers (Casey McGehee made $2.5 million this season, and would likely get a pay increase for next year.  There are plenty more infield options available for cheaper!) 

Further more, all those contracts coming off the books leaves the Yankees with a bunch of holes in their 25 man roster.  The Yankees will be on the market for a right fielder, a catcher, 2 starters, a closer, possibly a setup man, a designated hitter, and possibly a couple of bench players or relievers.

So in short, there is about $72 million due to come off the books (assuming Soriano opts out), $7 million of that will go to pay raises to Jeter, Cano, and Granderson, and lets say an additional $5 million goes to settling arbitration contracts.  That leaves the Yankees with $60 million, but the Yankees won't want to spend all of it because they're trying to reduce payroll.  So if they pocket $8 million, and invest $52 million back into the team, what will that look like?  Can you get 2 starters, a catcher, a right fielder, a closer, and a DH for that much?  And if we rely on signing lots of 1 year contracts to fill these spots, what do we do in 2014 when we have to be under $189 million, and have to fill all these holes again?

Back on March 1st, Hal Steinbrenner explained how the Yankees would get under $189 for 2014:

“I’m a finance geek,” he said. “I guess I always have been. That’s my background. Budgets matter, and balance sheets matter. I just feel that if you do well on the player-development side and you have a good farm system, you don’t need a $220 million payroll. You don’t. You can field every bit as good a team with young talent.”  (NY Times)

Yes, that amazing Yankee farm system will field us every bit as good a team with young cost controlled talent.