OK, sure: the Yankees’ “budget” is often pictured as a mythological creature like the Loch Ness Monster – there’s occasional evidence for the existence of such things, but no confirmed sightings. The alleged existence of a Yankees budget has been discussed as far back as 1995. Allegedly, this budget prevented the Yankees from signing Mike Cameron in 2009, and Johnny Damon in 2010.
But in other respects, the Yankees’ budget is like a campaign promise: it becomes more difficult to pin down the further we’re past Election Day. We were told that the 2010 Yankees’ budget was at $185 million, but somehow by Opening Day the Yankees’ payroll had reached $213 million. We were told in the beginning of this year that the Yankees only had $2 million left in their budget to sign their final outfielder (money that was spent on the combo of Randy Winn and Marcus Thames), but somehow the Yankees found the extra $3.5 million needed mid-season to sign Kerry Wood and Lance Berkman, and had money left over for the possible mid-season acquisition of Cliff Lee.
So we need to be careful when we discuss the Yankees’ budget. Hal Steinbrenner has said that the 2011 payroll will “stay within the same levels” as prior years. Should we take him seriously? I think we should.
I can see three reasons why the Yankees might be seriously budget-constrained in 2011: (1) the Yankees’ cash resources are NOT unlimited, (2) the Yankees need payroll flexibility to address roster requirements arising after 2011, and most importantly (3) with the collective bargaining agreement up for renegotiation in 2011, there are strong tactical reasons for the Yankees to keep their 2011 payroll as low as possible.
I’ll discuss these reasons for 2011 budgetary restraint in upcoming posts. But for now, let’s address a fundamental question: assuming that the Yankees have a budget, exactly how large might that budget be? Hal Steinbrenner said above that it will be about the same as last year’s budget – but how much was last year’s budget?
The Yankees are not in the habit of publishing their budgets. But we can learn something by looking at the Yankees’ historic payroll levels:
The chart above shows the Yankees’ reported payroll at the start of the season (per Cot’s Baseball Contracts) and at season’s end (as reported by BizOfBaseball.com). The published end-of-year numbers are important: they’re used to calculate baseball’s “luxury tax”, they cover the team’s 40-man roster, and they include bonuses. But most of us focus on the payroll numbers reported at the beginning of the season, and that’s what we’ll look at here.
Note that the Yankees’ payroll increased dramatically between 2002 and 2005, but that since 2005 the Yankees have pretty much held the line on payroll spending. Surprise! It looks like the Yankees do have something of a budget. The team has kept payroll between $190 million and $210 million, though they were willing last year to take payroll closer to $215 million. Let’s use $215 million as being approximately the “level” that Hal Steinbrenner referred to above.
Is the Yankees’ current budget set at around $215 million? Maybe. But if this is the limit on the Yankees’ 2011 payroll, then the Yankees are not going to be big spenders this post-season.
Let’s look at the Yankees’ payroll commitment (actual and projected) for the team’s current players likely to remain on the 2011 roster:
The Yankees owe fixed payroll obligations in 2011 to the players highlighted in green and pink above (the pink-highlighted players will probably not appear on the Yankees’ 2011 roster). The players highlighted in gold have not yet signed with the Yankees for 2011, so the salaries shown for these players are my estimates. Note that in every case, I’ve estimated on the low side — I’m guessing that Pettitte and Rivera will not receive raises, and that Jeter will receive a substantial pay cut. But even though I’ve guessed on the low side, I’m showing a Yankees payroll of $196 million for these 21 players.
If the Yankees sign Cliff Lee at a figure matching CC’s salary (and we can guess that Lee would cost the Yankees more than this), the Yankees’ 2011 payroll would balloon to $220 million, for 22 players. To get to 25 players, the Yankees’ payroll could reach $225 million. And if the Yankees cannot talk Jeter into a substantial pay cut … if the team needs to offer Pettitte a raise to persuade him not to retire … or if we take seriously the rumors that the Yanks are interested in Jorge de la Rosa — then we’re looking at a 2011 payroll that might exceed $230 million.
(If you’re interested in the Yankees’ budget and the Yankees’ future payroll, you should give a close read to this terrific piece by Joe Pawlikowski at RAB. Joe focuses on the growing size of the Yankees’ long-term salary commitments — I share Joe’s concern, and I’ll try to focus on this problem in a later post. But Joe also concludes that the Yankees “can probably sign Cliff Lee and still come in with a  payroll under $210 million.” With all due respect to Joe, I don’t see the 2011 numbers the same way that he does.)
Should we be concerned about the size of the Yankees’ 2011 payroll? I think we should. I think that the Yankees would like to keep their payroll at something much closer to the old $215 million limit. I think there are good reasons for the Yankees to respect this limit. I will address these reasons in upcoming posts.