The Erosion of the Yankee Payroll Advantage in One Chart

The number that the Yankees have had their eye on since the new CBA was agreed to one year ago is $189 million. That’s the threshold in which they will have tremendous economic incentives–measured in the scores of millions of dollars–to get and stay under. More realistically, once you include non-pecuniary benefits that we don’t always see, the number looks more like $170 million in payroll. We should probably start using the term, ‘Soft Cap’ a la the NBA.

To put this in perspective, I wanted to see where MLB payrolls have been trending over the years. The Yankees have actually decreased payrolls after their late-George Steinbrenner era high marks, while other teams have caught up. I think the time series is pretty telling:

The lines represent the ranked payroll of non-Yankee MLB teams in their particular year. So, the actually teams represented in the trend lines shift over time. I separated out the Top-3 from the Top-10.

What you can see is huge payroll advantage for the Yankees around 2004-2006, and then the other top-10 teams beginning to catch up while the Yankees trended down a little bit. Interestingly, the bottom-20 teams haven’t really increased much beyond basic inflation, and for that reason the MLB average isn’t exactly skyrocketing.

One thing to think about: The Yankee roster has some serious dead weight on it. Specifically, it has Alex Rodriguez, and to a lesser extent Mark Teixeira, Rafael Soriano, and an injured Mariano Rivera. The other high payroll teams certainly aren’t free of dead weight, but it does hold the Yankee payroll down to a lower level than it should.

The good news is that Soriano’s contract is coming off the books, Mariano Rivera may follow, and Derek Jeter probably won’t be making $18.9 million going forward.

I think we need to accept a new reality though: the Yankees are officially no longer unique among MLB teams. Their top payroll competitors are going to have the exact same buying power as the Yankees do. Brian Cashman needs to make smarter and smarter decisions in order to stay in their customary spot on top the AL East. Given how aggressive Toronto has been this off season, that’s not going to get any easier.

E.J. Fagan been blogging about Yankee baseball since 2006. He is a Ph.D. student at University of Texas at Austin.

4 thoughts on “The Erosion of the Yankee Payroll Advantage in One Chart

  1. David in Cal

    I hope the Yanks are smart enough to realize the value of young, capable players — players early enough in their career so that their salary is still low. Imagine how much better off they’d be if they still had Ian Kennedy and Austin Jackson for under $1 million each.

  2. Duh, Innings!

    The 2009 Yankees Opening Day rotation was Sabathia/Wang (who was the 2008 Yanks ace despite his injury-shortened season on his ace 2006-07)/Burnett/Pettitte/Chamberlain. There was no room for Kennedy in the rotation and Kennedy pitched exactly ONE inning for the ’09 Yanks.

    If the Yanks didn’t trade Austin Jackson, they would’ve saved a ton of money and had received tons of bang for their buck with three more years of it, yes, but they wouldn’t have had second half of 2010 Granderson, second (third?) in the ALMVP voting 2011 Granderson, or 2012 Granderson’s team leading 43 HR and 106 RBI.

    I’d love to have Kennedy and Jackson in Yankee pinstripes for 2012 but fact is there was no future for Kennedy as a Yankee when he was one and Jackson was an all-glove, no-power bat to most scouts. Also remember if Jackson started in 2010 the Yanks would’ve had two no-power bats in the outfield since Gardner was the full-time LF in 2010.

    Saying Kennedy and Jackson shouldn’t have been traded is a classic second-guess and hindsight is 20/20. Btw what have they won since being traded to the Yanks? ‘Cool Jackson is part of an AL Champion but he doesn’t have a World Series ring yet.

  3. Duh, Innings!

    Historically, the Yanks have barely been stung by trading homegrown position players since 1987 when they traded Jay Buhner for Ken Phelps, as only TWO of them have went on to win World Series with other teams after being traded from the Yanks since ’87: Mike Pagliarulo (part of the ’91 World Series Champion Twins) and Mike Lowell (part of the ’03 WSC Marlins and ’07 Red Sox.) Pags was hardly a factor on the ’91 Twins while Lowell was a second-tier part of his WSC teams at best. The Yanks still won twice as many World Series (1998-2000, 2009) and made it to three times as many World Series (1998-2001, 2003, 2009) as Lowell did after he was traded from the Yanks. The Yanks were not trading Brosius after his career year, World Series MVP year 1998 to make room for a guy who had a cup of coffee with the ’98 Yanks.

    Dioner Navarro has been by and large a disappointment. Juan Rivera has had an ok career. Dan Pasqua, Ricky Ledee, Shane Spencer, Nick Johnson, and D’Angelo Jimenez never amounted to anything after they were traded from the Yanks. Cristian Guzman had an ok career but who cares with 1998-2001 Knoblauch (who the Yanks traded Guzman in a package for) and 1998 on Jeter? JT Snow was a nice player for the Angels and Giants, but the Yanks got a decent 1993-95 out of Don Mattingly, a better 1996-2001 out of Tino Martinez, and a very good 2002-03 out of Jason Giambi before he went south. Jay Buhner stuck it to the Yanks in ’95 but he never won anything with the Mariners. Jesus Montero is one more so-so season like his 2012 was away from being demoted to AAA or traded. Austin Jackson has been the best Yankee prospect traded from the Yanks since Jay Buhner, but the Yanks didn’t exactly get back Ken Phelps in Curtis Granderson. Granderson tore it up in the second half of 2010, was third in the ALMVP voting in 2011, and posted 43 HR and 106 RBI for the 2012 Yanks. The Yanks have went to two ALCS and made the postseason every year with Granderson. The Tigers have Jackson for only three more years barring them signing him to an extension before his time is up with them. Who’s to say the Yanks couldn’t get him back in 2016 when he’d be in his prime years? Melky Cabrera is a PED cheat and it remains to be seen if he is the goods, besides that he was a lazy, out of shape, disruptive bum towards the end of his time with the Yanks and a bum for the Braves.

    ‘Point I’m trying to make is the Yanks should keep trading position player prospects for what they need as historically it doesn’t bite them on the as s much.

  4. fuster

    Austin Jackson in the same outfield as Brett Gardner wasn’t as good a match as Gardner and Granderson…. and they would not have been as well off as they’ve been.

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