2014 Payroll Outlook And The Current Effect

As the Yankees continue to allow free agents to sign elsewhere, the detriments of a $189 million budget in 2014 is growing obvious. They have no real catcher or designated hitter, and the team's collective age might challenge injury records that they set last season. But World Series victories are not won in January. Despite the fan outcry, there's plenty of time left to acquire a catcher and designated hitter, though Hal Steinbrenner is making the situation worse. In regards to fans being uneasy with the current roster, he said,

"I’m surprised to hear that there’s anger, if you see what we’ve done this offseason. …We’ve signed three or four of the top free agents that were on the market, because we’re going to continue to field a championship caliber team."

What the team has really done, is lost Russell Martin, Nick Swisher, Rafael Soriano, and Alex Rodriguez. Adding Kevin Youkilis neutralizes the effect of losing Rodriguez, but how's the team supposed to make up the nearly 8 wins the other three provided? This is now an 87 win team, and 87 wins hasn't won the AL East since 2000.

It's all in the name of the budget, and though I'm not against keeping the payroll down, this current team is far from "championship caliber". Essentially, the Steinbrenners handed Brian Cashman a mammoth sized Alex Rodriguez contract, and then told him to keep the salary down. Fans should be upset, especially in ownership, but Cashman is still a smart enough GM to deal with it. He wouldn't have allocated resources to Hiroki Kuroda, Andy Pettitte, Mariano Rivera, Ichiro Suzuki, and Youkilis if he was throwing in the towel.

In all the recent talk about limited payroll, I think there's a lot more money left than the team is letting on. For instance, there were talks that Justin Upton's $8.54 million average annual value couldn't fit into the current payroll and 2014. Perhaps they're just purposefully blowing the budget situation out of proportion, in order to make the Diamondbacks lower their asking price.

Before I start rambling, the 2014 budget is what we're looking at. As it stands, there are four guaranteed contracts. CC Sabathia at $24.4 million, Mark Teixeira at $22.5 million, Ichiro Suzuki at $6.5 million, and Alex Rodriguez at $27.5 million. There was some speculation that Alex Rodriguez' home run milestone bonuses might effect the payroll, but they actually aren't counted towards the luxury tax, and as of last year, these types of bonuses are banned. Between these four players, the Yankees are at $80.9 million.

Then there's Derek Jeter and his option year. The new CBA is very confusing when it comes to option years, but from what a number of inquisitive minds, myself included, have interpreted, this particular option acts like a one-year contract on the luxury tax. I can't say this is for certain, but from the general consensus, as well as my interpretation, this seems to be the answer. Anyway, Jeter's option should count for $8 million plus $1.5 million for a silver slugger raise, or $9.5 million total.

There are also a few arbitration players that'll receive raises, and we have to guess at those. Brett Gardner, who's making $2.85 million in 2013, might see up to $5 million in his third arbitration year. David Robertson, who made $1.6 million in 2012, could see about $6 million in 2014. Then the first year arbitration players Francisco Cervelli and Clay Rapada will probably get around $1 million, with Ivan Nova getting around $2 million. Again, these are educated guesses, but the total is $15 million.

As for pre-arbitration players, all of these guys will receive around the league minimum, which should be $500,000 in 2014. Although Michael Pineda lines up as an arbitration player, there are some very big hints that team wants to option him to the minors for some of his rehab, limit his service time, and get an extra pre-arbitration year out of him.

There's also additional costs for other 40 man players, which should work out to around $78,000 for each of the additional 15 players not on the 25 man. Also there's player benefits to work in, which is currently slightly lower than $11 million in 2013.

As it stands, this is what we can predict for the team.

C Austin Romine $0.50
1B Mark Teixeira $22.50
2B David Adams $0.50
3B Alex Rodriguez $27.50
SS Derek Jeter $9.50
LF Zoilo Almonte $0.50
CF Brett Gardner $5.00
RF Ichiro Suzuki $6.50
DH Eduardo Nunez $0.60
SP CC Sabathia $24.40
SP Michael Pineda $0.50
SP David Phelps $0.50
SP Ivan Nova $2.00
SP Brett Marshall $0.50
RP Dellin Betances $0.50
RP Francisco Rondon $0.50
RP Mark Montgomery $0.50
RP Cody Eppley $0.50
RP Cesar Cabral $0.50
RP Clay Rapada $1.50
CL David Robertson $6.00
C Chris Stewart $0.60
UTL Corban Joseph $1.00
C Francisco Cervelli $1.00
OF Ronnier Mustelier $0.50
40 Man (15 x 78K) $1.17
Player Benefits $11.00
Total $126.17M
Remaining $62.83M

A lot of the bullpen pieces and utility players are guesses, but we can assume that they'll otherwise be filled by other league minimum salaries.

Just for fun, let's work a few of the other potential acquisitions into this budget. Let's say the Yankees re-sign or extend Cano to a generous deal that guarantees him $25 million a year. They trade for Justin Upton and his $8.54 AAV. And assuming Phil Hughes has a great season, the Yankees could re-sign him to a $10 million AAV contract.

C Austin Romine $0.50
1B Mark Teixeira $22.50
2B Robinson Cano $25.00
3B Alex Rodriguez $27.50
SS Derek Jeter $9.50
LF Justin Upton $8.54
CF Brett Gardner $5.00
RF Ichiro Suzuki $6.50
DH Eduardo Nunez $0.60
SP CC Sabathia $24.40
SP Phil Hughes $10.00
SP Michael Pineda $0.50
SP David Phelps $0.50
SP Ivan Nova $2.00
RP Dellin Betances $0.50
RP Francisco Rondon $0.50
RP Mark Montgomery $0.50
RP Cody Eppley $0.50
RP Cesar Cabral $0.50
RP Clay Rapada $1.50
CL David Robertson $6.00
C Chris Stewart $1.00
UTL Corban Joseph $0.50
C Francisco Cervelli $1.00
OF Ronnier Mustelier $0.50
40 Man (15 x 78K) $1.17
Player Benefits $11.00
Total $168.21M
Remaining $20.79M

So the Yankees end up with $20 million left, even after handing out these three contracts. Though the team is obviously looking a little weak on pitching, they have a number of prospects that will hopefully be ready by then. Dellin Betances, Manny Banuelos, Brett Marshall, and Mark Montgomery could provide some quality innings in the bullpen or rotation. Guys like Nick Goody, Branden Pinder, and Vidal Nuno could also be some relatively high-upside players that see some time in 2014.

The offense is pretty solid, though there's room at catcher and designated hitter. I don't think the team will be lucky enough to have any positional prospects become quality everyday players by 2014, so the remaining budget should be spent on depth. A few million dollars for some platoon DH's and utility players should set the offense straight.

Outside of the remaining budget, the team could also have something to spend in prospects. In any Justin Upton deal, they'll likely see two of the four top 100 overall prospects leave the system, but the organization has a number of high-upside players in the low levels. By 2014, a couple of these guys should be showing off their talent. They'll also have three first round picks in the upcoming Rule-4 draft, which will replenish the system.

In the end, having just $20 million to fill out this team isn't desirable, but neither is a $189 million budget. There's a lot more room than I first thought though, and it makes the idea of re-signing Cano, trading for Justin Upton, or extending Phil Hughes more realistic. All the team's complaints about not having enough money seem to be nothing more than a play at gaining an upper hand in the market.