Last week, I voiced my complaints about the new CBA. It’s a horrible document that will harm baseball, but it’s a document that is now baseball reality. The Yankees have to learn to live with it, and need to readjust their strategy to win in the new environment.
The Yankees have a pretty difficult goal: perennial contention. They want to make the playoffs 90% of the time, and have a shot at the World Series. They do not go into rebuilding mode, and will almost never be sellers at the trade deadline.
I think we have a pretty good handle on Brian Cashman’s plan to make this a reality before the new CBA. He made selective large free agent investments. He traded for promising but undervalued players. And he acquired highly talented prospects by going over slot at the draft and investing heavily in Latin America, and then spent the money to retain these players through their prime years. The last tactic brought us Robinson Cano, Gary Sanchez, Jesus Montero, Manuel Banuelos and other prospects, while the penultimate tactic brought us Mason Williams, Dellin Betances, Austin Jackson (Curtis Granderson), David Robertson, and tons more players. Both activities will be significantly reduced over the years with this new CBA. The Yankees can probably spend a little extra on scouting and coaching to make the most out of their minuscule signing budgets, but overall they will see their capacity to bring in new talent via these avenues reduced by a lot.
So, the Yankees are going to have to rely on free agency as their competitive edge over other teams. They have competent management and more money than other teams, so it’s natural to simple say, “OK, spend more on free agency” and call it a day.
I think the Yankees should think about spending differently on free agency using their giant budget. They should take their savings from decreased investment in prospect development and use it to bend what you might want to call the “free agent yield curve” toward shorter contracts and higher salaries. We’ve written a lot about how roster space is as much a limitation on Yankee player acquisition as is player costs. They should work to pay a premium to get free agents to sign 3 or 4 year deals instead of 6 or 7 year deals. How much will this premium cost? Probably quite a lot – a $20 million free agent may cost $25 million or more per year. One recent example – under this strategy, the Yankees would consider baiting Derek Jeter with a $20 million arbitration case instead of signing him to a 3 or 4 year deal, and then go out and pay for Jose Reyes right now. The Yankees will face higher player costs overall, since they’ll have to replace the free agent after the shorter contract is up, possibly at a higher cost. I’m fine with this. The Yankees can afford to pay this premium, and will get to play more free agents closer to the prime of their careers, albeit at higher cost and risk.
What benefits do the Yankees get out of this? First, they get increased roster flexibility – they wouldn’t need to pass up on Albert Pujols because they have Mark Teixeira under contract for the next decade. They lose a lot of tail risk involving players on monster contracts declining or becoming injury. They will raise the overall talent level of their team by keeping ages down. All this will cost money, but the Yankees should both have some in reserve (declining payroll over the past few years) and will save quite a bit on player development. Over time, I expect some free agents who are relatively young (Felix Hernandez, Justin Upton types) will learn that they can make a big payday from the Yankees in their 20s, and then hit it big again with a second dip to free agency like Rafael Furcal or J.D. Drew or even C.C. Sabathia, Alex Rodriguez and A.J. Burnett did with opt-outs.
It’s not ideal, but I think it’s a strategy with a lot of potential for success. It’s untried, but I think the strategy would provide the Yankees with a real asymmetric advantage using their bank account. I have trouble seeing the status quo strategy maintaining perpetual contention over the long term, without high end young talent coming in from Latin America.