The Yankees, following another strong regular season that ended in playoff disappointment — their 13th consecutive year where they failed to reach the World Series — are facing a potentially franchise-altering offseason.
Much of that has to do with the future of Aaron Judgewhich we’ll cover at length below.
But there is unrest among some of the team’s most diehard and vocal fans, who are worried that the Yanks — whose current core has grown a bit stale, and has not had much playoff success — are going to run it back with many of the same characters.
Will they?
New York has already picked up the 2023 option on Luis Severinowhich was a no-brainer, and extended qualifying offers to Judge (duh) and Anthony Rizzo (who opted out).
How much change will there be? Possible trade candidates included Gleyber Torresand there has to be at least some concern with Isiah Kiner-Falefa being counted on to be the starting shortstop in 2023 after getting benched during the playoffs.
As the Yanks build their roster for 2023 and beyond, let’s analyze their payroll situation and the impact it might have…
SALARY ALREADY COMMITTED FOR 2023
The Yankees already have $156 million committed to the payroll for 2023 as it’s calculated for CBT (luxury tax) purposes, per Cot’s Baseball Contracts. That includes 40-man player benefits and other player benefits, but does not include the money owed to their arbitration-eligible players. We’ll dive into that in the next section.
Among the big contracts on the Yankees’ books are Gerrit Cole (owed $36 million per year through 2027), Giancarlo Stanton (owed $32 million per season through 2025, $29 million in 2026, and $25 million in 2027), and Josh Donaldson (owed close to $22 million in 2023 and 2024).
As the Yanks look to build their roster, it’s worth pointing out that Hal Steinbrenner is not his dad.
The Yanks have continued to run payrolls that are among the highest in baseball, but they have been much more cognizant of the luxury tax threshold and have had a reluctance to cross it and stay well over it for years at a time.
For example, their payroll for CBT purposes in 2022 was just shy of $260 million. It was $208.4 million in 2021, $239 million in 2020, and $234 million in 2019.
Heading into 2023, the lowest luxury tax threshold is $233 million and the highest (the “Steve Cohen tax”) is $290 million. Will the Yanks pass that top number?
A lot of that will have to do with what the pay their arbitration-eligible players and (perhaps) Judge…
WHAT ARE THE ARBITRATION-ELIGIBLE PLAYERS PROJECTED TO MAKE?
The Yankees have 12 players who are eligible for arbitration, and pretty much all of them are slam dunks to have it offered to them.
If Torres is traded it would wipe his money off the books — depending on the type of return the Yanks get and what that player or players make.
But New York could also sign Nestor Cortes Jr. to a contract extension, which would make his salary for next season rise dramatically.
For now, here’s what those 12 players are projected to make::
Gleyber Torres: $9.5 million
Frankie Montas: $7.025M
Isiah Kiner-Falefa: 6.25M
Lou Trivino: $3.6M
Jose Trevino: $3.6M
Clay Holmes: $3.2M
Jonathan Loaisiga: $3.0M
Domingo German: $2.35M
Nestor Cortes: $2.1M
Lucas Luetge: $1.95M
Michael King: $1.9M
Kyle Higashioka: $1.8M
Adding those projections up comes to $45.675 million. And when you add that $45.675 million to the $156 million the Yanks already have on their books for 2023, you get a shade under $202 million.
That means, depending on potential trades, non-tenders, and extensions, the Yanks have about $31 million to work with under the lowest luxury tax threshold and $88 million to work with to prevent them from crossing the top threshold. And that takes us to…
If the Yankees re-sign Judge, and they certainly are giving the impression that they want to bring him back, it’s fair to believe it will cost them $40 million or so annually for eight years or more.
And if you add $40 million to the money the Yanks have already committed and the money their arbitration-eligible players are owed, that takes their payroll for 2023 to about $243 million — above the first luxury tax threshold but still comfortably below the top threshold .
The Yankees also want to try to retain Rizzo and will need to add some more certainty to a starting rotation that could lose Taillon.
Fortunately for New York (or unfortunately, depending on how you look at it), they have much of their position player core under control for next season (including Stanton, DJ LeMahieuTorres, Aaron HicksKiner-Falefa, Harrison Bader, Higashioka, and Trevino). So they shouldn’t have to add a ton there beyond Judge and Rizzo if they bring them back.
The Yanks are also set up well in a bullpen that should return Holmes, Loaisiga, Trivino, Luetge, King, and Clarke Schmidt.
HOW MUCH MONEY IS THERE TO ADD PLAYERS THIS OFFSEASON?
Lots of this will obviously come down to whether Judge is back. If he is, the Yanks — unless they plan on blowing well past the top luxury tax threshold — will be limited. And if they bring Rizzo and/or Taillon back, that will eat up even more of the budget.
That means that in a world where Judge is back, it would seem less likely that the Yankees would pursue another big ticket offensive player (such as one of the top free agent infielders on the market, which will include Carlos Correa, Trea Turnerand Xander Bogaerts).
But if Judge leaves, all bets could be off, setting up the Yanks to perhaps make a huge splash or two in free agency or swing a big trade that brings in significant payroll.
There’s also a chance that the Yanks, after years of being relatively cautious, decide to spend like crazy. And it would be a bit easier to stomach that if some of their most highly thought of prospects pan out sooner rather than later, which would help them bring the payroll down significantly in the next few seasons.
THE PAYROLL SITUATION IN 2024 AND BEYOND
As is noted above, the Yanks are going to have two huge contracts (Cole and Stanton) on their books through 2027. And if they sign Judge, they’ll have three players accounting for roughly $108 million annually over the next five seasons.
But there will also be some relief coming soon, with Donaldson’s money off the books after 2024.
Looking ahead, the Yankees have roughly $104 million committed to the payroll in 2024 and 2025, $95 million in 2026, and $80 million in 2027.
One thing that would help the Yanks in a big way is if prospects Anthony Volpe and Oswald Peraza develop into at least big league regulars soon, if not stars. And both players could possibly make a serious impact as early as 2023.
The Yankees also have an outfielder Jason Dominguezwho could make his MLB debut in 2024.