The Yankees Are in a Bind
Yankee fans, brace yourselves: If you really want to improve your team, it’s going to hurt.
You have two choices: Blow through the luxury tax or trade your best prospects. Pick your poison.
Let’s start with the lineup. Realistically, if everyone is playing their proper positions, the Yankees have legitimate starters at only four positions: RF (Aaron Judge), 3B (Gio Urshela), 2B (DJ LeMahieu), and DH (Giancarlo Stanton). If you give Joey Gallo the benefit of the doubt in LF, that’s five.
That means they need to fill four holes: CF, SS, 1B, and C. And since they’re heavy on RH power bats, ideally they’d fill those with LH contact bats, to the extent that they can.
Meanwhile, on the pitching side, they could also use a No. 2 starter and a couple more bullpen arms.
And they need to do all this now, because Judge is still in his prime and is only under control for one more year (extending him is yet another issue). They also have Gerrit Cole in his prime, and a very itchy fanbase.
- As a reminder, there are only two forms of capital with which to improve a team: money or players. If the Yankees want to stay under the luxury tax again in 2022 (after walking a tightrope to do so in 2021), they have very little wiggle room to work with. Let’s take a look:
- *Projected budget (in millions, per Fangraphs’ Roster Resource): $211
- *Projected luxury tax calculation: $223
The first luxury tax limit for 2021 was $210, which means, if it stays the same, the Yankees are already over the line. If it climbs to, say, $215 for 2022, they’re still over.
That means they have to start cutting — and that’s before they even think about signing free agents.
What if they just spent like crazy?
Gone are the days when George Steinbrenner could just, famously, buy the top players in baseball to win a World Series. It’s harder than that now.
But okay, let’s say his son Hal decides to open his checkbook. GM Brian Cashman could swoop in and sign one of the big free agent shortstops (Carlos Correa?), a free agent CF (Starling Marte?), a No. 2 starter (Marcus Stroman? Robbie Ray?), and a 1B (re-sign Anthony Rizzo?).
Filling the holes that way will cost serious money. Upgrading those four positions via free agency will add at least $90M to the budget in 2022 alone. That will put them way over the third luxury tax limit (assuming the current CBA rules stay the same) not just for 2022, but for the foreseeable future, as stars typically require longer-term deals. But hey, as Mets owner Steve Cohen said, if you’re going to go past the luxury tax, you might as well go big.
Financially, that would require paying a 42.5% tax on the overage amount, since they’d be over the third limit. So if they take the budget to, say, $300M, it will cost them an extra $38M. In addition, their highest draft pick would move down 10 places in the order. It’s hard to envision even the rich Yankees doing that.
That’s because Steinbrenner and Cashman believe strongly in building a sustainable, efficient model. They are not unlike the Dodgers in this regard — spend smartly, build a strong farm, keep the line moving. Blowing past these limits and getting taxed and penalized goes against that whole philosophy.
So what about the trade market?
Some pundits (like Jim Bowden of The Athletic) think it might be feasible to just trade castoffs. It is not. Let’s look at our estimates:
Expendable players with zero value (or less):
Keep in mind there’s a reason most of these guys are still on the team — no one wants them.
To be very clear: It is not realistic to expect any other team to accept failed prospects or injured major leaguers for established stars. No one wants any team’s flotsam and jetsam.
- Other teams are not taking:
- *a guy with concussion issues who may never play again
- *a guy who’s put up -1.7 fWAR in the past three years, can’t play the field, and is out of options
- *a guy who is always injured and whose contract is deeply underwater
- *an $8M catcher who can’t catch and hit only .204 this past season
Other teams have their own problem children. They don’t want more. So those castoffs are not movable.
So what do the Yankees have to work with?
Cashman already traded multiple prospects from the middle tier of his farm to land Jameson Taillon, Gallo, Anthony Rizzo, and Clay Holmes. So it’s a bit picked over. And those half-measure additions still weren’t enough to get them past the Wild Card round.
Meanwhile, the bottom of the farm is, well, the bottom. That’s not going to move any needles.
That leaves the top. Here’s what they’ve got:
- Top tier ($20M+):
There is a second tier of prospects we value between $6M and $10M, consisting of Alexander Vargas, Luis Medina, Austin Wells, Clarke Schmidt, Trey Sweeney, Yoendrys Gomez, and Antonio Gomez. Those are likely secondary pieces in any serious trade.
In other words, packages led by those top three prospects (some combined, depending on the target) are what other teams will ask for.
If the Yankees want Matt Olson, the A’s will ask for Volpe straight up, or Peraza or Dominguez as the lead piece with secondaries attached.
If the Yankees want, say, Bryan Reynolds, the Pirates will ask for both Volpe and Dominguez; if they want Cedric Mullins, the Orioles will ask for Volpe plus secondaries, or both Peraza and Dominguez. You get the idea.
So if they go this route, Cashman and Steinbrenner will have to stomach the losses of Volpe, Dominguez, and Peraza, et al, which will strip the farm bare of most of its best talent for the foreseeable future. Not a happy choice either.
The Third Way
Many Yankees fans will no doubt contemplate a third approach. This involves a combination of trading and non-tendering more expensive players while somehow escaping luxury-tax penalties and keeping the top prospects.
For example, they could (and probably should) non-tender Sanchez (estimated salary: $7.9M), Frazier ($2.4M), and Andujar ($1.7M). That will save them $12M. It helps, but not enough. That’s not even half of what Carlos Correa’s likely AAV will be. And now they need another catcher, since they lost Sanchez.
They could also look to trade players with value making more money:
Since none of these players is going to generate a huge return, the main reason to move them would be to save money (and the fact that Torres is blocked at 2B). Shedding the salaries of Voit ($5.4M), Gallo ($10.2M), and Torres ($5.9M) will save another $21.5M.
Adding that to the cuts above, they’ve saved a total of $33.5M. That takes their luxury tax total down to $189.5M, leaving them headroom of only about $25M (assuming a limit of $215M). That’s not even enough to afford Correa. And since they traded Gallo, now they need another outfielder.
And if they somehow combined this approach with a prospect trade for an established veteran, they still have to pay that veteran’s salary — Olson is set to make $12M this year. Doing that would leave headroom of only $13M, again with multiple holes to fill.
And that also means that if they pivoted to trading only for less expensive (in salary terms) players like Reynolds or Mullins, their scope of options would be limited. And the other GMs would ask for even more in player capital, knowing they have more leverage.
So this approach seems less than ideal. It’s a whack-a-mole game.
The looming decision
So which way should the Yankees go? They proved this year that muddling through doesn’t work. The whack-a-mole approach above just feels like moving the deck chairs. If they want a true championship team now, with Cole and Judge in their prime, they need to go bold.
So should they spend like crazy, and get heavily taxed and penalized? Or stay under the limit and trade their best prospects?
Either way, it’s going to sting.
I’d feel bad for them but ….
The Yankees should go the way of ignoring the fake salary cap for starters. Also I think it’s really disingenuous to consider Gallo a “maybe” starter. What the Yankees need is a SS and then some flexibility if they’re going to load manage which means spending money or taking on money to make better trades.
To your point about Gallo: fans and the NY media are not convinced he’s a keeper, since his performance post-trade has been dreadful:
So it’s just acknowledging that he’s been a disappointment in NY, relative to expectations. As I mention above, I give him the benefit of the doubt based on track record.
I think giving him the benefit of the doubt is the right move. The members of the NY media calling for it seem like the ones who have been furthest removed from the teams’ decision making, they fired both hitting coaches, and he’s excellent defensively which is a huge help with all of the load managing they do.
I also wouldn’t prioritize #2 starter as the acquisition cost is going to be higher than the teams’ need represents. The Yankees were a really good pitching team this year and aren’t losing any of the key contributors in that area.
They should blend their revenue advantage with their player development one though. Sign one of the big SS, and trade for a 1B and an IF/OF flexible lefty bat. For me those players are Olson and Ketel Marte, and yes I’m aware of the trade costs.
What they should not do is devote more resources to the bullpen and the middle of the rotation. Which is why the Yankees fan/media (the very same eager to get rid of Gallo) obsession with Josh Hader is so bizarre to me.
Great article, John!
Thanks very much.
They’re definitely in a really tough spot. I think the last option you laid out is what they will ultimately have to do if they want to improve. That would allow them to maybe make one bigger addition , and then use some small money or internal pieces to fill the remaining holes.
The pitching side is interesting for them, as they may be able to shore that up internally. They had Luis Gil come up and pitch well for them, and they seem to like Clarke Schmidt too. They also have German and Severino, who have been major injury risks, but should be healthy to start next season.
Aroldis Chapman 34 RP/CL Vet $18,000,000 – $18,000,000 $18,000,000 7.79 17,466,667
this must be traded
you can get a closer who can do the job….for a lot less……
NYY 0 1 5.89 22 0 0 0 1 4 18.1 17 14 12 2 2 14 16 1.69 .262…or just cut him..or trade to mariners…not…lololol…but washingto nationals….hhmmmm…lets take a look……
Zack Britton 34 RP Vet $14,000,000 – $14,000,000 $14,000,000 6.06 14,000,000
that is 32 mil…alone
next…after a trade with washington..to save 9 mil….i go after…center field…………Jo Adell #7…..angels….
got rid of german..but i got corbin in the last trade,….so..i got joe adel…cf..that..is minus 1.5 mil…so 10.5 mil..so far
Boy, just when I think the TWINS are in a tough spot with roster mismanagement you lay out the Yankees and BOOM ! There’s a roster that is a mess. I also think they will go big for a SS and I’d target Cory Seager if the Dodgers let him walk and put Trea Turner at SS. Seager’s lefty bat in Yankee Stadium and between Judge and Stanton in the order would be ideal for the Yanks. It’s hard to figure out how guys like Andujar, Frazier and to a lesser degree Sanchez have flopped so badly. Andujar was never a good glove, but his BAT sure looked for real. Frazier is a switch-hitting outfielder with power from both sides of the plate. If I’m the Twins, looking for a 4th OF’er (or maybe a starter in LF) if the Yankees non-tendered Frazier, I’d be interested. I’d rather have Frazier than Jake Cave. Maybe Andujar could be a LF/3B/1B/DH type of bat. Why can’t that kid hit anymore ? He’s more of a mystery than Gleyber Torres.
With Andujar, pitchers figured out his weak spots and pitched accordingly. He has never made the re-adjustment back. Good hitters adjust to how pitchers pitch them; bad ones don’t.
How about blowing through the salary cap in 2022 in order to create more payroll flexibility in 2023 and beyond AND put together a winning team in 2022?
Stanton and Voit to the Padres for Hosmer, Myers, Pomeranz, and Profar
Sanchez and Torres to the Reds for Barnhart and Castillo
Barnhart, Myers, and Profar to the Phillies for Didi, Kingery, and Realmuto
Bowman, Gil, Hicks, and Peraza to the Diamondbacks for MadBum and Marte
Chapman and Gallo to the Dodgers for Bellinger and Trienen
Andujar, Frazier, Garcia, and German to the Rockies for Blackmon and Marquez
Judge to the Giants, Yastrzemski to the Red Sox, and Verdugo to the Yankees
Allen or Gardner
You might want to use our simulator to plug in those trade ideas. You’ll find that many of them are simply not realistic. Sanchez and Torres for Castillo is not even in the same area code. You might also want to take into account the needs of the other teams.
I don’t know if you have access to individual user profiles, but if you do, you will see that for many of these suggestions, I have worked them out using your simulator. For the sake of simplicity, I removed some of the extraneous parts of these deals that were necessary to make the deal work using the simulator, but would not necessarily be required to complete a deal.
In all of these suggestions, I have taken into consideration the needs of the teams involved. For example, the Padres are as desperate to move the contracts of Hosmer and Myers as the Yankees should be to move Stanton’s, his 2021 season notwithstanding.
Stanton is the kind of difference-maker who, if healthy, would enable them to compete with the Dodgers and Giants in 2022 and beyond. He is exactly the kind of high-risk/high-reward acquisition that Preller has made in the past, obviously with very mixed results.
The deal that I have suggested would save the Padres a ton of money in 2022 that they could repurpose for other needs, while taking on additional payroll responsibilities in the year to come. Also, as a Southern California native, Stanton would be a very marketable commodity who could produce as much if not more revenue than he would cost if he can remain healthy and play well.
The Reds wanted to trade Castillo for Torres one year ago and both are coming off down seasons. Yes, your system penalized Torres more Castillo, but I am not convinced that the Reds front office would agree with that. Barnhart and Sanchez are both non-tender candidates as the Reds have a younger and cheaper option at the catcher position who is ready, willing, and able. Sanchez might make more sense for them as a backup catcher and DH if the new CBA includes a universal DH than Barnhart.
The Phillies are desperate to move Didi’s and Kingery’s contracts and can probably get more value from the money that they are paying Realmuto by replacing him with Barnhart and repurposing the rest of the money to fill needs elsewhere. I think that they would be more than willing to take a chance on players like Myers and Profar, knowing that their ballpark is much more hitter-friendly than the one that they have been playing in with the Padres.
The Diamondbacks are desperate to move MadBum’s contract and while they won’t give up Marte for nothing as a salary dump, they might be willing to adjust the prospect cost for Marte in a bad contract for bad contract swap, especially considering the upside that could come from a healthy Hicks. Marte would most certainly cost more than Bowman, Gil, and Peraza by himself, but I think that the contract swap balances the scales sufficiently.
The deal with the Rockies is most certainly a reach, but Andujar and Frazier are two players with a tremendous amount of upside in a place like Colorado, Garcia used to be a top prospect, and German was a near-20-game winner not too long ago. That plus shedding Blackmon’s contract should get the Yankees close to acquiring Marquez.
Verdugo is younger than Yastrzemski, but Yastrzemski is more marketable in Boston than Verdugo and might also have more near-term upside than Verdugo. This probably does not happen as a traditional 3-way deal, but I think that the Giants could get Verdugo from the Red Sox for Yastrzemski and then flip him to the Yankees for Judge.
Yankees fans would go nuts, but the reality is that Judge is a bad bet for anything more than a 2-3 year extension. Verdugo is a much better bet, especially in a ballpark like Yankee Stadium, for the next three years and possibly beyond.
I completed the Chapman/Gallo for Bellinger/Trienen deal using your simulator before the postseason when there was a lot of talk on MLB Network Radio about the Dodgers possibly non-tendering Bellinger. Gallo has been the better player for the last two seasons and Trienen has been the more consistent reliever. It could have worked if Bellinger had not performed as well as he did during the postseason. Alas, he did.
Thanks for the thoughtful reply. For the record, though, Castillo did not have a down year. He put up 3.7 fWAR, and is highly coveted as a frontline starter. Torres put up 1.7 fWAR, and his projection is now much lower since he’s a 2B only. They are worlds apart, value-wise.
I would love to be a fly on the wall in the Reds front office. I am not so sure that they necessarily think that they are that far apart. Only time will tell.