My best guess is that the Yankees will end up with an Opening Day payroll of around $206 million.
So, here’s our headline: the Yankees are holding the line on spending — in their own way. The Yankees have the largest payroll in baseball, but this payroll has remained relatively constant for the last 7 years. Since 2005, the Yankees’ opening day payroll has averaged around $203 million, never exceeding this amount by more than $10 million.
The Yankees’ spending restraint can be seen in the team’s “luxury tax”, the penalty the Yankees have to pay each year as a result of exceeding spending limits set forth in baseball’s Collective Bargaining Agreement. In 2010, the Yankees’ luxury tax bill was “only” $18 million – the Yankees’ lowest tax amount since the inception of the tax in 2003 (when the Yankees were paying tax at a lower rate).
OK, sure. If the Yankees had signed Cliff Lee, their opening day payroll would be at or above the record $230 million figure I projected late last year. Sure, the Yankees’ budgetary discipline is dependent on players like Cliff Lee and Carl Pavano turning down large Yankee offers. Sure, if the Yankees really wanted to hold the line on spending, they would not be paying over $10 million a year to two different relief pitchers. Sure, assuming that the Yankees exercise their 2012 options on Nick Swisher and Robbie Cano, the Yankees will have over $177 million in commitments next year to just 11 players.
Sure. If you want to believe that the Yankees are a financial behemoth, a bottomless money pit, then there’s not much I can do to persuade you that you’re wrong.
Still, whether by design or by accident, the Yankees’ opening day payroll has varied little between 2005 and 2010. In that same time, the average baseball team payroll has increased by 20%, according to information available here. Between 2005 and 2010, the Cubs’ Opening Day payroll increased by 66%, the Twins by 75% and the Tigers by 94%. Moreover, the Yankees’ two main rivals in terms of spending and success – the Red Sox and the Phillies – are closing the payroll spending gap with the Yankees (note that my 2011 figures are estimates):
What does all this mean? If what you seek is economic parity among the 30 teams in baseball, then the Yankees’ payroll is going to be a problem for you. But at least, the problem does not appear to be worsening.
Of course, a lot can happen between now and Opening Day. In the roster I’m showing above, Pena could easily be replaced by someone else, and Cervelli could be moved to make room for Jesus Montero. The Yankees need to add at least two additional players to the roster I’m showing above (probably another starting pitcher and a fifth outfielder). It’s hard to imagine that the Yankees could spend TOO much on these remaining players.
Then again, it was hard to imagine that the Yankees would offer $10 million to Carl Pavano.
Before making any definitive statements on the size and the meaning of the Yankees’ 2011 Opening Day payroll, I think I’ll wait a bit longer … perhaps until Opening Day.