Upton and the 2014 Budget

Over the last few days, there’s been a lot of talk about the Yankees trading for Justin Upton and how they don’t mind paying the prospect price, but are wary of picking up the three years and $38MM remaining on Upton’s contract. I’ve long said that a trade for Upton would be great, if not very likely. He’s just the type of player the Yankees need going forward and Mike at RAB touched on the situation at length yesterday. The ending paragraph is what caught my eye most:

Anyway, this Upton stuff gives me a bit of an Alex Rodriguez circa 2003-2004 vibe. A-Rod was rumored to be available all winter and eventually the Rangers reached an agreement with the Red Sox, but the union shot the thing down because of the proposed restructuring of his contract. Before you knew it, poof, Alex was a Yankee. Upton’s been available for months (years, really) and it wasn’t until just now that they reached a trade agreement, but this time it was the player who blew things up, not the league. The Yankees may not have the exact pieces Arizona is seeking and that could prevent a trade from happening, but I do believe they have enough to at least get their attention. We can thank the Mariners for that. If New York is unwilling to pull the trigger on a trade for a 25-year-old player of Upton’s caliber for financial reasons, well that’s just sad.

Let’s pretend for a minute that the Yankees DO trade for Upton and Curtis Granderson has nothing to do with it. How would Upton affect plan 189 in 2014? As of right now, the Yankees have $81.625MM committed to 2014. However, as high as that is, we can add to it. Why? Because that number only includes $3MM to Derek Jeter in the form of a buyout. You can bet your bottom dollar, your ass, your first born, your mortgage, whatever you’d like, that Jeter is going to pick up his $8MM player option. That adds a full $5MM to the ledger, giving us $86.625MM. There is other money that is guaranteed to be added, and that’s the arbitration raises for Brett Gardner (3rd time), David Robertson (3), Michael Pineda (1), Ivan Nova (1), Clay Rapada (1), Chris Stewart (1), and Francisco Cervelli (1). Those exact numbers, though, are hard to project so we’ll leave them aside for now.

There is also a hefty amount of money that isn’t exactly a guarantee to be added, but I wouldn’t doubt for a minute that it’ll be added. That money is the money that’ll be due to Robinson Cano if (when) he is retained as a free-agent. I’ll be conservative (and take the easy way out) and say that Cano will get “only” $20MM next year, and that’s the money for every year of the deal. That ups the total money to $106.625MM for 2014. Now, let’s move on to Justin Upton and his contract situation.

2013 is pretty much the last year that Upton has what you could consider a team-friendly salary. He’s owed just $9.75MM for 2013, but that jumps up to $14.25MM in 2014. Add that to our $106.625MM and we get $120.875MM. So assuming the Yankees have Robinson Cano and Justin Upton, the Yankees will have those two as well as Alex Rodriguez, CC Sabathia, Mark Teixeira, Derek Jeter, and Ichiro Suzuki under contract. That leaves the Yankees with 18 spots to fill on the 25-man roster. But, remember, the luxury tax is based on the 40-man roster. Subtracting the aforementioned $120.875 from the planned $189MM target, we get $68.125MM to spend on the remaining 33 players, which averages out to about $2.1MM per player, but this is before the arbitration raises to the players I listed above. Now, it’s likely that at least some of them (Chris Stewart, Clay Rapada) aren’t with the team and that’ll help. It’s also likely that those arbitration guys won’t cost that much, and neither will the 40-man fillers, so the $189MM will be hard to reach, but not wholly unrealistic. Despite that, it seems just hard enough that I don’t think the Yankees will go through with it.

If the Yankees really want to fit Upton in, they probably can. They might have to abandon Plan 189 if they do, or they may have to cut costs elsewhere (i.e., they don’t sign Robinson Cano). While we’re all weary when it comes to the budget talk, especially as it relates to acquiring (or not acquiring) talent, but it is something we must address. Trading for Justin Upton was definitely a pipe dream and it seems that, despite the Yankees’ willingness to meet the asking price, it’s going to have to stay that way.

4 thoughts on “Upton and the 2014 Budget

  1. Jerkface

    Hey,

    This isn’t really how the 189 limit is calculated. I wrote a helpful thing about it which you can find at LOHUD: http://yankees.lhblogs.com/2013/01/14/pinch-hitting-the-yankees-and-the-luxury-tax/

    The 189 limit is based off the AAV of multi-year contracts, single season contracts, then single season bonuses & escalators. There are a lot of rules for this. One of them involves player options. Jeter, if he accepts his option, will count as 15.5 against the luxury tax limit. If he declines ,he counts as 9 million.

    J Upton’s contract will only count as ~8.4 million against the limit, despite the larger physical payroll numbers.

  2. Ralph

    I think the math is a little worse that what is represented i this post. The important thing with the 189 goal is to remember it is players AAV that impacts the Luxury tax number and that is the payroll goal the Yankees are trying to hit. In this case, Arod – 27.5M, CC – 24.4M, Tex – 22.5M, Ichiro – 6.5M make up 80.9M of the teams 189. Player options luxury tax calculation actually counts to the original contract, so his deal was really 4 yrs 59M. So his luxury tax hit is 14.75M (it could be worse as his silver slugger added 1.5M to the 2014 salary), bringing the total for those 5 players to 95.65M. Upton’s luxury impact would actually be less than listed in the post at 12.67 (38M/3yrs). The new total with Upton would be 108.3. Add in 11M for player benefits (the 11M is an estimate based on 2013 10.8M a team) and the new number is 119.3. That leaves 69M to fill out the rest of the roster including Arb raises. Personally, I with or without Upton, I don’t see how signing Robbie Cano to a mega deal works. I would actually prefer Uptons early Peak years at 3/38, than Cano’s later peak and decline years at 20+M per. Just my opinion though.

  3. hawaii dave

    You can go with your head or your heart…my brain says there is an easier solution. Get Upton and get rid of Granderson. If the average salary is 8.4 for Upton, and you get rid of Grandy’s 16 mil, you save bigtime and improve the offense a bit. And Grandy can be traded for a couple of prospects that some team doesn’t want to wait for. And if you really want to get smart, find a team that needs a 2nd baseman and a clean up hitter and get a truck load of talent in return for my beloved Cano. Signing Upton and getting rid of Grandy and Cano for big salary reduction and a bunch of prospects will be a smart move. Get Morse to play left. Gardner to center. 5-6 triple A players, some of whom will be ready in late 2013 and then 2014…under the cap, loaded for the future….booo-yah. All that does is open a hole at 2nd, to be filled by Nix and Nunez, or Almonte, or maybe a major league ready 2nd baseman from the Grandy trade. Just something to think about.

  4. Stephen

    FYI – it’s articles/posts like this that will make me not come back to this site. I don’t mean to be a jerk about it, but as the other commenters have pointed out, your calculations are not correct. And honestly with all that’s been out there on the $189 million I am shocked to read something that doesn’t realize the luxury tax is calculated off aav. I suggest more research in the future.

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