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.