Staying Under $189M: The Impossible Dream

Harry Hooper · Dec 4, 2013

Aren't bonuses amortized over the length of the contract? So, even if the Yanks get a big smooch from Bud and don't send Rodriguez any checks in 2014, wouldn't at least some of his bonus $ still count against their spending numbers for the coming season?

DLew On Roids · Dec 4, 2013

The Ellsbury signing tells me that they are pretty sure they're at $88M. That leaves room for Cano and one flyer, or a couple of mid-level SPs. I can't imagine they're go to $173M with Ellsbury with the holes they still have.

SirPsychoSquints · Dec 4, 2013

jon abbey said:
OK, I'm going by Joel Sherman's numbers to start this off and adding in amfox1's arb guesses from the other thread, let's see if we can collectively keep better track of this than the media seems to be doing:

DEFINITE COMMITMENTS:

Alex Rodriguez ($27.5 million)
CC Sabathia ($24.4 million)
Mark Teixeira ($22.5 million)
Brian McCann ($17 million)
Derek Jeter ($12.81 million)
Ichiro Suzuki ($6.5 million)
Alfonso Soriano ($4 million)
Brendan Ryan ($1.67 million)
Vernon Wells ($0)

$116.38 million, or $88.88 million not counting A-Rod

Jacoby Ellsbury ($21.86M)
Pineda (arb1, assume 1.00 AAV)
Nova (arb1, assume 1.00 AAV)
Robertson (arb3, assume 4.00 AAV)
Phelps (min, 0.50 AAV)
Kelley (arb2, assume 1.50 AAV)
Warren (min, 0.50 AAV)
Betances (min, 0.50 AAV)
Claiborne (min, 0.50 AAV)
Gardner (arb3, assume 4.00 AAV)
Cervelli (arb1, assume 1.00 AAV)
Nunez (min, assume 0.60 AAV)

So they seem to be around $125M if A-Rod doesn't count, $152M if he does, plus $11M for insurance/pension. This assumes no Cano and no Kuroda, Kelly Johnson also is not in there yet.

You probably also want to add 4 more place-holder minimum salaries until roster spots get filled with more expensive guys.

TomRicardo · Dec 4, 2013

Why do you have Nova only get 1 million in arb? I would be shocked if he was lower than 2.5

Jed Zeppelin · Dec 4, 2013

phrenile said:
It's premature to believe Ellsbury will be receiving his AAV of $21.86MM in 2014. We've heard the total years and dollars, but the annual breakdown hasn't been announced.

It's possible he agreed to be significantly underpaid in 2014 (to help the Yankees get under $189MM) in exchange for being significantly overpaid in subsequent (and total) years.

Isn't AAV the only thing that matters for luxury tax purposes?

amfox1 · Dec 4, 2013

glennhoffmania · Dec 4, 2013

I think that the Yankees can definitely get under the cap, but they can't do so and also field a team that can win the division. There are still too many holes with or without ARod, especially on the pitching side.

Doctor G · Dec 4, 2013

jon abbey said:
OK, I'm going by Joel Sherman's numbers to start this off and adding in amfox1's arb guesses from the other thread, let's see if we can collectively keep better track of this than the media seems to be doing:

DEFINITE COMMITMENTS:

Alex Rodriguez ($27.5 million)
CC Sabathia ($24.4 million)
Mark Teixeira ($22.5 million)
Brian McCann ($17 million)
Derek Jeter ($12.81 million)
Ichiro Suzuki ($6.5 million)
Alfonso Soriano ($4 million)
Brendan Ryan ($1.67 million)
Vernon Wells ($0)

$116.38 million, or $88.88 million not counting A-Rod

Jacoby Ellsbury ($21.86M)
Pineda (arb1, assume 1.00 AAV)
Nova (arb1, assume 1.00 AAV)
Robertson (arb3, assume 4.00 AAV)
Phelps (min, 0.50 AAV)
Kelley (arb2, assume 1.50 AAV)
Warren (min, 0.50 AAV)
Betances (min, 0.50 AAV)
Claiborne (min, 0.50 AAV)
Gardner (arb3, assume 4.00 AAV)
Cervelli (arb1, assume 1.00 AAV)
Nunez (min, assume 0.60 AAV)

So they seem to be around $125M if A-Rod doesn't count, $152M if he does, plus $11M for insurance/pension. This assumes no Cano and no Kuroda, Kelly Johnson also is not in there yet.

ou also have to add bebefits for around 11M. hey are part of the luxury tax calculation.

AlNipper49 · Dec 4, 2013

He did

DanoooME · Dec 4, 2013

Here are MLBTR's arb projections for the Yankees

Yankees (7)

David Robertson - $5.5MM
Brett Gardner - $4MM
Ivan Nova - $2.8MM
Shawn Kelley - $1.5MM
Francisco Cervelli - $1MM

I took Stewart off the list since he was dealt to Pittsburgh and Nix since he was non-tendered.

nattysez · Dec 4, 2013

This blog post is helpful for comparison's sake: http://itsaboutthemoney.net/archives/2013/12/03/state-of-the-budget-12313/

I'm quoting his numbers to make things easier -- he assumes Slappy is out for the year.

1- C: Brian McCann (5/$85MM) $17.000MM
2- 1B: Mark Teixeira (8/$180MM) $22.500MM
3- 2B: Dean Anna (Min) $0.511MM
4- 3B: Kelly Johnson (1/$3MM) $3MM
5- SS: Derek Jeter (1/$12.81MM) $12.810MM + $7.000MM Bonuses
6- LF: Jacoby Ellsbury (8/$169MM) $21.175MM
7- CF: Brett Gardner (Arb 3) $4.000MM
8- RF: Alfonso Soriano (8/$136MM) $17.000MM
9- DH: Vernon Wells (7/$126MM) $18.000MM
10- BN: Brendan Ryan (1/$2MM) $2.000MM
11- BN: Eduardo Nunez (Min) $0.511MM
12- BN: Ichiro Suzuki (2/$13MM) $6.500MM
13- BN: Francisco Cervelli (Arb 1) $1.000MM
14- SP1: CC Sabathia (5/$122MM) $24.400MM
15- SP2: Ivan Nova (Arb 1) $2.800MM
16- SP3: David Phelps (Min) $0.511MM
17- SP4: Adam Warren (Min) $0.511MM
18- SP5: Michael Pineda (Min) $0.511MM
19- CL: David Robertson (Arb 3) $5.500MM
20- RP: Shawn Kelley (Arb 2) $1.500MM
21- RP: Preston Claiborne (Min) $0.511MM
22- RP: Dellin Betances (Min) $0.511MM
23- RP:
24- RP: Vidal Nuno (Min) $0.511MM
25- RP: Cesar Cabral (Min) $0.511MM
Total: $170.384MM
40-Man Roster
26- SP: Manny Banuelos (Min) $0.040MM
27- SP: Nik Turley (Min) $0.040MM
28- SP: Brett Marshall (Min+) $0.080MM
29- SP: Jose Ramirez (Min) $0.040MM
30- SP: Shane Greene (Min) $0.040MM
31- SP Jose Campos (Min) $0.040MM
32- RP:
33- RP: David Huff (Min+) $0.080MM
34- RP: Bryan Mitchell (Min) $0.040MM
35- C: Austin Romine (Min+) $0.080MM
36- C: Gary Sanchez (Min) $0.040MM
37- C: J.R. Murphy (Min) $0.080MM
38- OF: Ramon Flores (Min) $0.040MM
39- OF: Zoilo Almonte (Min+) $0.080MM
40- OF: Slade Heathcott* (Min) $0.040MM
Total: $0.84MM
Final Calculations
Total Roster Owed: $170.464MM
Cash Considerations: -$13MM (From Cubs for Soriano), -$18MM (From Angels for Wells)
Player Benefits: $12MM
Cushion For Non 25-Man Players: $3.5MM
Current Budget Owed: $154.964MM
Current Budget Remaining: $34.036MM

Bottom line is that if they sign Cano to a $25mm/AAV deal, they have $9mm left. That means no room for Kuroda unless he signs a pro-rated deal in July, no room for Tanaka, no room for a high-priced reliever, and they'll have little room for mid-season replacements if anything goes horribly awry. In this scenario, they probably need to move Gardner and/or a catching prospect for a cost-controlled starter if they want to be competitive.

If they call Jay-Z's bluff and tell Cano that he can either sign for 7/140 or enjoy the Pacific Northwest, they'd have another $5mm of wiggle room if Cano still returned.

Morgan's Magic Snowplow · Dec 4, 2013

nattysez said:
This blog post is helpful for comparison's sake: http://itsaboutthemoney.net/archives/2013/12/03/state-of-the-budget-12313/

I'm quoting his numbers to make things easier -- he assumes Slappy is out for the year.

Bottom line is that if they sign Cano to a $25mm/AAV deal, they have $9mm left. That means no room for Kuroda unless he signs a pro-rated deal in July, no room for Tanaka, no room for a high-priced reliever, and they'll have little room for mid-season replacements if anything goes horribly awry. In this scenario, they probably need to move Gardner and/or a catching prospect for a cost-controlled starter if they want to be competitive.

If they call Jay-Z's bluff and tell Cano that he can either sign for 7/140 or enjoy the Pacific Northwest, they'd have another $5mm of wiggle room if Cano still returned.

Staying below $189M would just be stupid at this point, as it either means losing Cano or seriously handicapping the team. If you're going to sign guys like Ellsbury, McCann, and Cano - all of which I think are actually good moves given their financial resources and lack of farm system talent - then you want to give yourself the best chance to win in the first year of those deals when you're getting the best expected value from the new acquisitions.

RedOctober3829 · Dec 4, 2013

Jeff Passan ‏@JeffPassan 31s
For luxury-tax purposes, Ellsbury's contract will count as $21.86M. The value of buyout is included in the average annual value calculation.

Bob420 · Dec 4, 2013

What are the 7mm in bonuses for Jeter? I can't seem to find them and are they automatically included in AAV if they aren't achieved?

Edit: Ok from the comments in the link

Jeter can earn an additional $7MM. $4 million if he wins the AL MVP award. $2 million if he finishes 2nd through 6th. $1.5MM if he wins a Silver Slugger. $500K if he wins a Gold Glove. $500K if he wins an LCS MVP award. $500K if he wins a World Series MVP

He most likely isn't winning any of those.

Average Reds · Dec 4, 2013

Morgan's Magic Snowplow said:
Staying below $189M would just be stupid at this point, as it either means losing Cano or seriously handicapping the team. If you're going to sign guys like Ellsbury, McCann, and Cano - all of which I think are actually good moves given their financial resources and lack of farm system talent - then you want to give yourself the best chance to win in the first year of those deals when you're getting the best expected value from the new acquisitions.

From a competitive standpoint, this may be true. But from a strategic standpoint, it would be beyond moronic if the Yankees went over the cap, since they have players on the roster taking up space for the sole purpose of helping them get under the cap.

The corpse of Vernon Wells is an instructive example. As I said in the thread at the time he was acquired, if they stay under the cap in 2014, this was a pretty smart business move. But if they blow through the cap, they are saddled with a useless player taking up space because of the subsidy he brings with him and the acquisition will be considered one of the more boneheaded things they have done.

Everything the Yankees have done to this point signals that they are getting under the cap this year while positioning themselves to blow through it and re-stock the team in 2015. McCann and Ellsbury are the first wave of restocking. Whether Cano joins them is really up to Cano. Just about everything else will wait for 2015.

A-Rod's situation is the wild card, but given how his arbitration hearing ended, I think the Yankees are smart to bet that his suspension will be upheld.

Morgan's Magic Snowplow · Dec 4, 2013

Average Reds said:
From a competitive standpoint, this may be true. But from a strategic standpoint, it would be beyond moronic if the Yankees went over the cap, since they have players on the roster taking up space for the sole purpose of helping them get under the cap.

The corpse of Vernon Wells is an instructive example. As I said in the thread at the time he was acquired, if they stay under the cap in 2014, this was a pretty smart business move. But if they blow through the cap, they are saddled with a useless player taking up space because of the subsidy he brings with him and the acquisition will be considered one of the more boneheaded things they have done.

Everything the Yankees have done to this point signals that they are getting under the cap this year while positioning themselves to blow through it and re-stock the team in 2015. McCann and Ellsbury are the first wave of restocking. Whether Cano joins them is really up to Cano. Just about everything else will wait for 2015.

A-Rod's situation is the wild card, but given how his arbitration hearing ended, I think the Yankees are smart to bet that his suspension will be upheld.

Whether they blow through the cap in 2014 is really just a financial calculation centered on the dollars saved by not doing so versus the hit to the franchise of another year of likely missing the playoffs, despite big ticket free agent acquisitions. You could make a reasonable argument for either strategy in the abstract. The problem, and I think we agree here, is that there's no consistency in their overall strategy - the Vernon Wells move is a sunk cost at this point, but one that was clearly geared toward staying under the cap in 2014. The benefits of signing McCann and Ellsbury, on the other hand, are seriously attenuated if they're not planning on going over the cap and truly competing in 2014.

glennhoffmania · Dec 4, 2013

Plus it's not just Ellsbury and McCann. They'd be wasting perhaps one of the (if not the) final productive years of Teixeira and Sabathia by waiting until 2015. I find it hard to believe that this team is basically going to punt 2014. They're far from done making offseason moves.

And most importantly, if this is Jeter's last year don't they owe it to him to say fuck the luxury tax and go for a WS title so he can leave on a high note? Isn't that worth losing $100m in revenue sharing?

Doctor G · Dec 4, 2013

I think ARod's suspension will be upheld but reduced to 100 games. His allegations that the Yankees colluded with MLB might lead to a split the baby resolution in light of the potential for future litigation.

nattysez · Dec 4, 2013

glennhoffmania said:
And most importantly, if this is Jeter's last year don't they owe it to him to say fuck the luxury tax and go for a WS title so he can leave on a high note? Isn't that worth losing $100m in revenue sharing?

They've paid Derek Jeter $253mm. I think it's safe to say they don't feel that they owe him anything.

Also, if they trade for Brett Anderson, have a handshake deal with Kuroda to pitch starting in July for $6mm, and nothing goes horribly wrong injury-wise, they should still easily compete for the WC while staying under $189.

Doctor G said:
I think ARod's suspension will be upheld but reduced to 100 games. His allegations that the Yankees colluded with MLB might lead to a split the baby resolution in light of the potential for future litigation.

If this happens, I'll bet you $1 Bud suspends him again for 62 games for his post-hearing accusations.

TheYaz67 · Dec 4, 2013

Well, I hope Gardner is renting his place, since I have a strong feeling he is going to be traded for pitching in the wake of the Ellsbury signing - who else do they have in the minors who is a position player who would bring significant return in a trade? Can't think of any, so Gardner is at the top of the "could be traded for pitching list", given they have 5 outfielders on the roster right now (albeit that includes Wells and Soriano, both/either of whom would be better off DHing) .

Its either that, or the plan is to try and win every game by a score of 10-9.....

glennhoffmania · Dec 4, 2013

nattysez said:
They've paid Derek Jeter $253mm. I think it's safe to say they don't feel that they owe him anything.

Check your sarcasm meter.

nattysez · Dec 4, 2013

jon abbey said:
That is very helpful, thanks. I have one question:

"Cushion For Non 25-Man Players: $3.5MM"

What is this for exactly, since the 40 man roster there is almost full? Future additions?

I assume he's assuming the MFY will fill the 40-man, though $3.5mm to do that may be pessimistic. So maybe another $1-2mm available?

glennhoffmania said:
Check your sarcasm meter.

Bah - you got me.

Average Reds · Dec 4, 2013

nattysez said:
Bah - you got me.

I laughed.

geoduck no quahog · Dec 4, 2013

Any idea what the comparable Red Sox numbers are today?

Baseball Reference has that at $145.8 vs. Yankees at $136.9 (less Slappy at $25 plus Ellsbury at $21.175) = $133.1

If true - budget remaining:

Boston: $43.2
NYC: $55.9

Comps
LAA: $148.9
Detroit: $142.3
Toronto: $132.7
Rangers: $114.1

LAD:$209.3
Phi: $154.7
SFO: $143.7
NATS: $127.1

Sampo Gida · Dec 4, 2013

Bonuses count in the season they are earned-and are not averaged out retroactively.

Johnson is supposed to be signed to about 3-4 million, so add at least 3 to the total.

I don't really think 189 is still in play, otherwise they would have taken cheaper options at C and CF, and even if it is, there is nothing to stop the Yankees from starting the season over 189 and then scaling down if injuries and non-performance issues strike.

They still have many holes really. Without Cano and Arod for a whole season (not certain he gets more than 100 games), they have 50 million to spend. Not sure I like the idea of Soriano/Suzuki playing RF, so another OF'er is needed, and they can trade Gardner (net cost +10 million AAV). 2B if Cano leaves (that might be Johnson, so 0). 3B is still a hole (15 million AAV if they sign Drew and move Jeter). 2 SP'ers (35 million AAV for Tanaka and Kuroda), Loogy (5 million AAV), and a power arm for the 8th or 9th to go with Roberston (10 million if Rodney). So without Cano I think they still need to spend 75 million to field a championship caliber team.

With Cano, they may go with cheaper/lesser options at 3B (Nunez/Johnson) and RF (Ichiro/Soriano) and spend an additional 50 million for pitching + Canos 25 million. So I think either way the Yankees end up with a payroll 25 million over 189. That gives them a 12.5 million tax, and they lose about 15 million in rebates.

So the cost of going over 189 with a championship caliber team as opposed to a team with an outside shot at the WC is about 52.5 million. They may easily make that up as the difference in revenue between a 85 W team and 95 W team is anywhere from 60-100 million (assuming the value of a win is 6, which is MLB avg to 10 which I estimate it to be for a team with the Yankees markets) .

Of course, if Arod only gets 100 games, which is about 50/50, then add about 10 million to the payroll and 5 million in tax, which kicks up the cost of a championship caliber team to 67.5 million as opposed to a 189 team that hopes to sniff the WC and risks massive revenue drops if they don't.

Sampo Gida · Dec 4, 2013

Morgan's Magic Snowplow said:
Whether they blow through the cap in 2014 is really just a financial calculation centered on the dollars saved by not doing so versus the hit to the franchise of another year of likely missing the playoffs, despite big ticket free agent acquisitions. You could make a reasonable argument for either strategy in the abstract. The problem, and I think we agree here, is that there's no consistency in their overall strategy - the Vernon Wells move is a sunk cost at this point, but one that was clearly geared toward staying under the cap in 2014. The benefits of signing McCann and Ellsbury, on the other hand, are seriously attenuated if they're not planning on going over the cap and truly competing in 2014.

Plans change. I think the Yankees FO was willing to take a single down year in 2014 to reap the benefits of being under 189, but for that to happen they had to make the playoffs in 2013. Injuries had them scrambling to make the playoffs by taking on contracts like Wells, and they fell short. They realize attendance and revenue is somewhat of a lagging indicator and that the cost of not competing in 2014 after the year they had in 2013 would be much higher than anticipated.

The possibility of an Arod suspension in 2014 kept the hopes alive for 189 longer than it should have, but even that did not allow enough money to fill all the 2014 holes created by decisions made before 2013 (eg not signing Martin to a 2-3 year deal, signing the declining Ichiro to 2 years, etc). Holes they were willing to have kept open in 2014 if they had made the playoffs in 2013.

Good Managers are not afraid to change their plans and strategy when circumstances change, even if it makes them look silly.

edit- the farm systems inability to produce much of value was also part of the equation. When they developed their plan for 2014 a few years ago they anticipated having some young cost controlled arms from the Killer B's to join Pineda in the rotation, and they expected to have a C ready in 2014 who was more than replacement level fodder ,

LeoCarrillo · Dec 4, 2013

So, are we moving forward with Nattysez's estimate of $34M left to spend? Haven't heard any refutation, so I'm assuming that.

If so, sounds like buh-bye Cano and hello guys like Garza, Tanaka and Kuroda.

LeoCarrillo · Dec 4, 2013

jon abbey said:
That seems pretty correct, with possibly a couple of extra million from the 'Cushion For Non 25-Man Players: $3.5MM".

Also they could roll the dice on Jeter not winning MVP and spend another $4M there.

It looked good to me, too.

Yet here's Stark saying they've got $21M-$31M PLUS the A-Rod money, so more like $50M. I'm assuming he's wrong, since there's no breakdown like we're using.

http://espn.go.com/mlb/blog/_/name/stark_jayson/id/10079924/do-new-york-yankees-enough-left-pay-cano

NYCSox · Dec 4, 2013

Oh man we need to lobby the BBWAA to give Jeter the MVP. Even with a .650 OPS.

HriniakPosterChild · Dec 4, 2013

jon abbey said:
Sempo, every beat writer today disagrees with you. The team is still telling them they plan to be under $189M, after the Ellsbury deal.

Wasn't Cashman telling every beat writer, "It's not us," about Teixeira?

Morgan's Magic Snowplow · Dec 4, 2013

Sampo Gida said:
Plans change. I think the Yankees FO was willing to take a single down year in 2014 to reap the benefits of being under 189, but for that to happen they had to make the playoffs in 2013. Injuries had them scrambling to make the playoffs by taking on contracts like Wells, and they fell short. They realize attendance and revenue is somewhat of a lagging indicator and that the cost of not competing in 2014 after the year they had in 2013 would be much higher than anticipated.

The possibility of an Arod suspension in 2014 kept the hopes alive for 189 longer than it should have, but even that did not allow enough money to fill all the 2014 holes created by decisions made before 2013 (eg not signing Martin to a 2-3 year deal, signing the declining Ichiro to 2 years, etc). Holes they were willing to have kept open in 2014 if they had made the playoffs in 2013.

Good Managers are not afraid to change their plans and strategy when circumstances change, even if it makes them look silly.

edit- the farm systems inability to produce much of value was also part of the equation. When they developed their plan for 2014 a few years ago they anticipated having some young cost controlled arms from the Killer B's to join Pineda in the rotation, and they expected to have a C ready in 2014 who was more than replacement level fodder ,

I don't disagree. Much as it pains me as a Red Sox fan, I think the best course of action for the Yankees right now is to sign Cano, sign Tanaka, sign a decent 3B, sign some additional pitching depth, blow completely through the self-imposed salary cap and then some, and let increased gameday revenues and YE$ money take care of everything. Whether they'll do this or not I have no idea but to me its the smart play.

Sox and Rocks · Dec 4, 2013

LeoCarrillo said:
So, are we moving forward with Nattysez's estimate of $34M left to spend? Haven't heard any refutation, so I'm assuming that.

If so, sounds like buh-bye Cano and hello guys like Garza, Tanaka and Kuroda.

And that $34M left accounts nothing for ARod, right, under the assumption he will miss the entire year?

Obviously, if his suspension is reduced to less than a year (like 100 games), that would give them ~$24 million before hitting the tax, not even enough for Cano since they still have to fill out their roster with other players, even if done cheaply.

Plus, I still haven't seen one credible source state definitively that ARod's salary won't count against the luxury tax, even though they obviously won't be actually paying him. Perhaps the Yankees have received confirmation of this from MLB (I'm sure they have), but it hasn't been officially reported, just speculated on, unless I've missed it.

In short, signing Cano will make the staying under the tax hard, if not impossible. Not signing Cano, and assuming no other significant signings, will make it possible depending on the final ARod verdict. Without Cano, they probably have room for one of the top remaining pitchers.

It's always worth noting that the decision on ARod's appeal isn't expected until January, so they probably won't know for sure until most of these other players, including Cano, have landed elsewhere.

BigMike · Dec 4, 2013

Is there any way they could convince someone to take Vernon Wells off their cap. Include a couple of decent prospects, and money basically to have him on someone else's cap next year. I know he was already heavily subsidized by LAA

Seems like that would solve a lot of problems for them

Wells of course would have to be willing to go

derekson · Dec 5, 2013

jon abbey said:
Although actually that is a pretty dumb quote, since NY will almost certainly be paying tax in years 2-7 of the Ellsbury deal, even if their rate is reset.

Sure, but the tax isn't on their entire payroll, it's on the marginal part that is above the cap. Ellsbury isn't being added onto a payroll already at the cap, so he's not effectively costing more than his actual salary, unlike a guy that they sign in 2016 with a payroll already at $200M. He might cause a later signing to cost more than its nominal cost, but his contract won't ever actually be taxed itself.

wade boggs chicken dinner · Dec 5, 2013

BigMike said:
Is there any way they could convince someone to take Vernon Wells off their cap. Include a couple of decent prospects, and money basically to have him on someone else's cap next year. I know he was already heavily subsidized by LAA

Seems like that would solve a lot of problems for them

Wells of course would have to be willing to go

I'm not sure what you are getting at. Wells has a cap number of $0.00 this year thanks to the contribution. If they traded Wells, they would have to trade the contribution (I would guess) so I'm not sure how their cap number would be reduced.

LeoCarrillo · Dec 5, 2013

Sure, but the tax isn't on their entire payroll, it's on the marginal part that is above the cap. Ellsbury isn't being added onto a payroll already at the cap, so he's not effectively costing more than his actual salary, unlike a guy that they sign in 2016 with a payroll already at $200M. He might cause a later signing to cost more than its nominal cost, but his contract won't ever actually be taxed itself.

Wow. Not even Boras would float this BS. So it's not the $20M players currently on the payroll that will cost them luxury payments in 2015 and beyond? It will be all the relievers and league-min guys they add to fill out the 40 man?

wade boggs chicken dinner · Dec 5, 2013

jon abbey said:
That seems pretty correct, with possibly a couple of extra million from the 'Cushion For Non 25-Man Players: $3.5MM".

Also they could roll the dice on Jeter not winning MVP and spend another $4M there.

I probably shouldn't have done this (time-wise), but I went through and compared the numbers. Here is what I came up with:

[SIZE=medium]C: Brian McCann =17.[/SIZE]
[SIZE=medium]1B: Mark Teixeira =22.5[/SIZE]
[SIZE=medium]2B=0[/SIZE]
[SIZE=medium]3B: Kelly Johnson =3[/SIZE]
[SIZE=medium]SS: Derek Jeter =12.81[/SIZE]
[SIZE=medium]LF: Jacoby Ellsbury =21.175[/SIZE]
[SIZE=medium]CF: Brett Gardner =4.[/SIZE]
[SIZE=medium]RF: Alfonso Soriano =4.[/SIZE]
[SIZE=medium]DH: Vernon Wells =0[/SIZE]
[SIZE=medium]BN: Brendan Ryan =2.5[/SIZE]
[SIZE=medium]BN: Ichiro Suzuki =6.5[/SIZE]
[SIZE=medium]BN: Eduardo Nunez =0.5[/SIZE]
[SIZE=medium]BN: Francisco Cervelli =1.[/SIZE]
[SIZE=medium]BN Dean Anna=0.5[/SIZE]
[SIZE=medium]SP1: CC Sabathia =24.4[/SIZE]
[SIZE=medium]SP2: Kuroda =15.5[/SIZE]
[SIZE=medium]SP3: Ivan Nova =1.9[/SIZE]
[SIZE=medium]SP4: David Phelps =0.5[/SIZE]
[SIZE=medium]SP5: Michael Pineda=0.5[/SIZE]
[SIZE=medium]CL: David Robertson =4.75[/SIZE]
[SIZE=medium]RP: Shawn Kelley =1.5[/SIZE]
[SIZE=medium]RP: Preston Claiborne=0.5[/SIZE]
[SIZE=medium]RP: Dellin Betances=0.5[/SIZE]
[SIZE=medium]RP: Adam Warren =0.5[/SIZE]
[SIZE=medium]RP=0.5[/SIZE]

A few notes.
(1) This list is for 23 players. I have "0" for 2B and added one minumum reliever to get to 25. Also, I assumed a minimum salary in 2014 of $500,000.
(2) I netted out offsets for Soriano and Wells
(3) Both lists has the same salary numbers for Cervelli, Gardner, and Kelley, so I put in those figures.
(4) I assumed Pineda is not arbitration eligible. Don't think it makes a ton of difference.
(5) For Nova and Robertson, I took the average of the arbitration projections.
(6) Kelly Johnson is included; I think Brendan Ryan just signed a two-year contract worth $4M plus a $1M buy-out.
(7) I assumed Kuroda's deal would come in at $15.5M, which is slightly more than he got last year. That may be conservative.

If this is all correct, then you get $146.535 for 24 players less a 2B. You would add in approximately $11M in benefits and we can add in another million for the rest of the 40-man roster. for $158.525. By my math, that is approximately $30.5M under the $189M cap numbers.

So even if you conservatively project Cano at Ellsbury money (say $22M), that means the MFYs have approximately $8M to fill out their roster and allow for some room to acquire players during the season if any one of the original 25 go down (which, by the way, is what I believe to be the "$3.5M cushion" was referring to but the post was taken down).
Doable? Sure. Is that a championship roster? No. Is that a playoff roster? Probably not.

And I would note, if A-Rod comes back to play even 50 games, that's $8.5M and they are over the cap.

Comments welcome

TomRicardo · Dec 5, 2013

Nova is probably going to get more than 1.9 million

bankshot1 · Dec 5, 2013

50% tax on Yankee payroll of $200M in 2014 : (200-189) = $5.5 million

Lets assume the Ys come under the cap in in '14, and save the luxury tax hit, but for lack of another quality SP, or Cano, or whatever, finish out of the '14 post-season. And attendance/ratings suffer, its not a crazy scenario. For the sake of argument lets say attendance falls by 100,000, (fell about 260,000 in '13) and YES ratings stay about the same. If we value the average revenue of those Y-tickets at $50, its a wash.

So they spend money in '15, and go over the cap (kept the same for simplicity)

17% tax on 220 M payroll (220-189) = 5.1 million
50% tax on 220M payroll (220-189) =15 million

Can someone explain to me why saving a $5MM-$10MM for a year or two, by staying under the $189MM cap in '14, is worth the potential revenue offset lost if Y-fans don't buy tickets plans or watch YES, or the potential harm to the $3 billion franchise brand, if Y-fans don't consume the product as they have in the past? Either this is lip-service to avoiding conspicuous consumption, or just a red herring. It doesn't make a lot of sense to me, particularly for a team lacking a cheap fix in the minors.

Staying Under $189M: The Impossible Dream

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