Staying Under $189M: The Impossible Dream

[jon abbey]

The thing is that over the last two offseasons, they've let all of their own guys go while spending at least as much on other team's free agents, who seem to be collectively bigger risks to deliver. It's an incomprehensible macro philosophy when examined from the end of the 2012 season until now, as I've discussed in detail before. The Cano decision makes sense from the perspective of "we're not signing any deals longer than seven years anymore", we'll see how it looks six or seven years from now. Again, NY was fucked either way on that, short term if they let him go and stuck carrying money long term if they signed him. They chose the first way for once, time will tell. 

 

[EvilEmpire]

The thing is that over the last two offseasons, they've let all of their own guys go while spending at least as much on other team's free agents, who seem to be collectively bigger risks to deliver. It's an incomprehensible macro philosophy when examined from the end of the 2012 season until now, as I've discussed in detail before. The Cano decision makes sense from the perspective of "we're not signing any deals longer than seven years anymore", we'll see how it looks six or seven years from now. Again, NY was fucked either way on that, short term if they let him go and stuck carrying money long term if they signed him. They chose the first way for once, time will tell. 

No question they've made some mistakes -- Russell Martin seems to be the biggest one that comes to mind, but overall, I'm hoping the "no long deals to guys who are in their 30s" philosophy is here to stay. I know some guys are productive at that age, but predicting who will do it is a fool's errand.

Going back to Martin for a second, I'm convinced that cutting payroll for 2014 wasn't the main reason he didn't get signed. I think they just really wanted a shot at McCann and figured they could assume some risk at catcher for a year. All the injuries to other position players made the lack of offense from that position stand out a lot more.

 

[jon abbey]

Going back to Martin for a second, I'm convinced that cutting payroll for 2014 wasn't the main reason he didn't get signed. I think they just really wanted a shot at McCann and figured they could assume some risk at catcher for a year. All the injuries to other position players made the lack of offense from that position stand out a lot more.

 
Is McCann even such a clear upgrade on Martin overall? When you factor in health and defense, it seems to me like a pretty small upgrade for a huge amount of money and a much longer commitment. 

 

[jon abbey]

 I'm hoping the "no long deals to guys who are in their 30s" philosophy is here to stay. 

 
Ellsbury turned 30 a few months ago, seven years is pretty damn long. McCann will also be 30 by the time spring training starts, they're not exactly getting these guys at 25. 

 

[EvilEmpire]

Ellsbury turned 30 a few months ago, seven years is pretty damn long. McCann will also be 30 by the time spring training starts, they're not exactly getting these guys at 25. 

The only way to get quality players around age 25 nowadays is for teams to develop them, which of course is a related but different problem for the Yankees. With regard to Ellsbury specifically, yeah seven years is a long time and he'll just be turning 37 at the end of it if the Yankees use the buyout. Not ideal, but they're basically paying through his age 36 season. Could be worse, but I'm still not a fan of the deal. That said, I think it is a better deal than signing Cano for 10 years.

I sort of agree with regards to Martin and McCann, but think it is too early to tell. If they would have done things differently last year and kept Martin, I don't think with all the injuries that last season would have turned out any different. So I'm trying to keep an open mind. Maybe McCann will be great. We'll see.

 

[nvalvo]

 
Is McCann even such a clear upgrade on Martin overall? When you factor in health and defense, it seems to me like a pretty small upgrade for a huge amount of money and a much longer commitment. 

 
I think if he plays to his track record, he's totally worth it and a big upgrade. .270/.350/.450 is an amazing line from a catcher, and a pretty typical year from McCann. The Dodgers' version of Martin that put up those sorts of numbers is long gone. Martin is, as you say, stronger defensively, but at the plate, Martin's career year is a typical year for McCann. 
 
But the health concerns are the big issue. With his vision questions, etc., there's a non-trivial chance McCann just implodes. So he's a high-risk, high-reward signing. I think that's a good move for a team with the Yankees' resources. With their revenues, they can self-insure this kind of deal. 

 

[jon abbey]

Well, FWIW, their bWARs in recent years have been very comparable, from 2010-2013:
 
Martin: 2.0, 2.5, 1.8, 4.3=10.6 total
McCann: 3.6, 2.7, 0.8, 2.2=9.3 total
 
And the difference is even bigger if you just look at 2011-2013, obviously. It's hard to believe NY chose to sign one of these guys at 5/85 over the other at 2/17. Sorry I keep bringing that up, but it's a really hard one for me to swallow. 

 

[Sampo Gida]

What does the $189 million threshold have to do with letting Cano walk? I think the 7 years they offered at a higher AAV than Seattle is a pretty good indicator that the luxury tax had nothing to do with the decision to not offer more. If the Yankees were good with that luxury tax hit for the next 7 years, then 3 more probably wouldn't be an issue...if they thought Cano would be one of the best players in the game in years 8-10. But they don't. The Yankees have said they are still willing to spend if it addresses an area of need, and they are. That still doesn't mean that they want to take on too much risk of having a lot of payroll tied up in unproductive players.

 
They made him an offer he was unlikely to accept, and if by some chance he did, they probably don't sign Ellsbury. 
 
And while the back end of a 10 year deal is a loser,  the front end is discounted if Cano maintains a 5-6 WAR level of performance for a few years
 
It is interesting that they replaced 10 years of Cano in his age 31-40 years (24 million AAV) with 10 years of Ellsbury and Beltran in their age 30-39 years, 30-36 for Ellsbury and 37-39 for Beltran).  Ellsbury and Beltran will cost them 36 million in 2014 for 5.8 WAR (per Zips) while Cano would cost 24 million for about the same WAR.
 
Anyways, even with the spending they have still managed to cut payroll over 45 million if Arod is suspended for the year and roughly 20 million if he is not.  Their fears of spending 24 million a year in 2023 when the NPV of his deal then is about 16 million is interesting.
 
At this point it looks as if JA was right and they are not going to go past 189.  Maybe they surprise us. It seems pretty stupid to have given up 3 draft picks just to be an 85 W team in 2014, but who am I to judge

 

[derekson]

 
 
At this point it looks as if JA was right and they are not going to go past 189.  Maybe they surprise us. It seems pretty stupid to have given up 3 draft picks just to be an 85 W team in 2014, but who am I to judge

 
I think the only way that they go over 189M is if ARod's suspension is reduced enough that they get forced over by ARod's salary. In that situation I think they'd just say "screw it" and go sign at least one of Tanaka, Garza, Ubaldo, or Ervin Santana. But if ARod's suspension is upheld or reduced by fewer than 100 games or so then I think the Yankees will stick with the $189M plan.

 

[jon abbey]

Yeah, I agree with that. Not saying it's what they should be doing, but I do think it's what they will do. 
 
What we've still never seen from NY's side is an accounting as to this $100M they allegedly believe (via Joel Sherman) that they will save by staying under $189M. I would really like to see that, one would think that they would owe it to their fans to spell it out a bit, assuming of course they do end up staying under. 

 

[semsox]

 
I think the only way that they go over 189M is if ARod's suspension is reduced enough that they get forced over by ARod's salary. In that situation I think they'd just say "screw it" and go sign at least one of Tanaka, Garza, Ubaldo, or Ervin Santana. But if ARod's suspension is upheld or reduced by fewer than 100 games or so then I think the Yankees will stick with the $189M plan.

 
I think the best case scenario from a Sox schadenfreude perspective would for A-Rod's suspension to be reduced to, say, 100 games (just long enough for them to realistically squeak under), and then A-Rod hitting 6 HR's in those games to get the 6 mil bonus to push them over. Pretty much my dream scenario.

 

[Sampo Gida]

 
I think the best case scenario from a Sox schadenfreude perspective would for A-Rod's suspension to be reduced to, say, 100 games (just long enough for them to realistically squeak under), and then A-Rod hitting 6 HR's in those games to get the 6 mil bonus to push them over. Pretty much my dream scenario.

 
I don't think Arod plays another game for the Yankees, or MLB for that matter.  I think as soon as he finishes his suspension he gets released and paid whats left on his last 3 years (about 60 million).  Not sure if that clears the books with regard to LT calculations for the Yankees in 2016 or 2017 (assuming the 60 million might all get booked in 2015 which would be at the 17% tax rate of the Yankees stay under 189), but even if not I think he is gone,  I also think he gets blackballed like Bonds.  Maybe he plays in Japan.
 
I mean, Arod is likely to produce 6 WAR in his last 3 years.  Not enough to keep him on and earn another 12-18 million in bonuses on top of his 60 million (plus tax)

 

[Montana Fan]

Sampo, what I read in A-Rods's email communications with his BFF, Randy Levine, doesn't lead me to believe he will be paid to go away. If Levine is still President of the Yankees, I think A-Rod has a place on the team.

 

[Sampo Gida]

Sampo, what I read in A-Rods's email communications with his BFF, Randy Levine, doesn't lead me to believe he will be paid to go away. If Levine is still President of the Yankees, I think A-Rod has a place on the team.

 
You may be right, although the relationship certainly soured at the end, and the leaking of the emails could suggest Levine may be on the way out (nothing else to base that on though).  However, I still think its possible, especially if this can clear him from their books in 2016 and 2017.  That 27.5-33.5 million AAV will make it impossible to sniff 189 and be competitive.  

 

[soxhop411]

“@VernonWells10: Thank you @Yankees for the opportunity to be a part of such a storied franchise. #Blessed #NextChapter”

 

[nattysez]

This will open up a 40-man spot so they can formally sign Thornton.  You know things are bad when you're playing for free (as far as the team is concerned) and they waive you so they can sign Matt Thornton.

 

[jon abbey]

Well, that's good news. They still need to clear a 40 man spot for the corpse of Brian Roberts, though. 

 

[TheYaz67]

Oh good, now that Wells is gone, its only a matter of time before they sign another outfielder!

 

[Doug Beerabelli]

“@VernonWells10: Thank you @Yankees for the opportunity to be a part of such a storied franchise. #Blessed #NextChapter”

I read that as "steroid franchise". It is an anagram.

 

[snowmanny]

The ARod suspension makes the question of bidding on Tanaka more interesting, because the Yankees actually could stay under $189MM if they don't add another big contract, correct?

It's hard to imagine them not trying to sign him, though.

 

[mabrowndog]

So if the full-season A-Rod suspension holds up, the Yankees get $25M salary relief for 2014, but would resume shelling out $61 million from 2015 through 2017. His cap number for those seasons will be $22M, $21M and $21M respectively.
 
Their team cap number for 2014 now drops to around $168.7M:
 
152.7M current salary obligations
$11.8M player benefits
$ 5.2M minor leaguers on the 40-man and prorated MLB pay for in-season call-ups
 
That gives them around $20 million with which to fill out their roster with a half-dozen MLB retreads (and to provide for any in-season acquisitions). 
 
If they go after any front-line pitching (Tanaka, Garza, E. Santana), there's still no way they'll avoid the luxury tax unless the signee(s) defer nearly all 2014 salary and there's only minimal signing bonus prorating.

 

[EvilEmpire]

The luxury tax is based on payroll at the end of the season, so the numbers also adjust based on any salary they shed as well. Even after all their off-season signings are complete it will be hard to tell how close they might be able to get.

 

[snowmanny]

Given the above, I think the really questionable move was Beltran. He is a go for it now signing since he could rapidly decline, but I'd be more concerned about NY in 2014 if they had signed 1-2 quality starters.

 

[nattysez]

So if the full-season A-Rod suspension holds up, the Yankees get $25M salary relief for 2014, but would resume shelling out $61 million from 2015 through 2017. His cap number for those seasons will be $22M, $21M and $21M respectively.
 
Their team cap number for 2014 now drops to around $168.7M:
 
152.7M current salary obligations
$11.8M player benefits
$ 5.2M minor leaguers on the 40-man and prorated MLB pay for in-season call-ups
 
That gives them around $20 million with which to fill out their roster with a half-dozen MLB retreads (and to provide for any in-season acquisitions). 
 
If they go after any front-line pitching (Tanaka, Garza, E. Santana), there's still no way they'll avoid the luxury tax unless the signed players defer all 2014 salary and there's only minimal bonus prorating.

 
You may have left the arb-eligible guys out of your $152.7 number, and possibly also Brian Roberts.  The last calculation was that the MFY have around $8mm left to spend on this year's team if their arbitrations go as expected, Jeter and Brian Roberts hit none of their incentives, and they don't save anything for mid-year additions.

 

[Brickowski]

Their team cap number for 2014 now drops to around $168.7M:
 
152.7M current salary obligations
$11.8M player benefits
$ 5.2M minor leaguers on the 40-man and prorated MLB pay for in-season call-ups
 
That gives them around $20 million with which to fill out their roster with a half-dozen MLB retreads (and to provide for any in-season acquisitions). 
 
If they go after any front-line pitching (Tanaka, Garza, E. Santana), there's still no way they'll avoid the luxury tax unless the signee(s) defer nearly all 2014 salary and there's only minimal signing bonus prorating.

Nah, if Cashman spends even a penny more on retreads he ought to be fired. Spend whatever you must on Tanaka and if you need a second baseman or an outfielder, bring up some farmhands, even if they are not ready.

Also, even if they go over $189M in January, they may be able to shed salary during the year.

 

[mabrowndog]

 
You may have left the arb-eligible guys out of your $152.7 number, and possibly also Brian Roberts.  The last calculation was that the MFY have around $8mm left to spend on this year's team if their arbitrations go as expected, Jeter and Brian Roberts hit none of their incentives, and they don't save anything for mid-year additions.

 
Oops. I counted Roberts but not the arb guys (Robertson, Gardner, Cervelli, Kelley & Nova), since I quickly grabbed the figures from Cot's. That only tightens their belt even further.
 

Nah, if Cashman spends even a penny more on retreads he ought to be fired. Spend whatever you must on Tanaka and if you need a second baseman or an outfielder, bring up some farmhands, even if they are not ready.

Also, even if they go over $189M in January, they may be able to shed salary during the year.

 
Well, prepare for his axing, then. Because I'l bet Mark Reynolds (at the very least) will be joining the party.
 
As for shedding salary, sure, they may be able to do so. But if there's been an edict by H&H to get under the cap for 2014 (as reported), then signing more big-money players while banking on an in-season salary dump seems a risky way to go about it. What if the players most likely to be dealt get injured or under-perform, limiting or eliminating any demand?

 

[glennhoffmania]

Deferrals or signing bonuses won't help them since it's based on AAV.

Also I thought ARod's cap number was 27.5 since his deal was 275/10. But I'm on my phone right now and don't feel like looking it up.

 

[snowmanny]

Apart from Ichiro, I am having a hard time imagining what salary they could possibly shed. 

 

[mabrowndog]

1) Deferrals or signing bonuses won't help them since it's based on AAV.

2) Also I thought ARod's cap number was 27.5 since his deal was 275/10. But I'm on my phone right now and don't feel like looking it up.

 
1) Right. That's why I noted deferral on salary and minimal prorating of any bonuses.
 
2) Bonuses are prorated for cap purposes, but not salaries. For this year, his salary is $25M. Signing bonus was $10M total over 10 years, so tack on another $1M for that and his 2014 cap figure is $26M. 

 

[mabrowndog]

Apart from Ichiro, I am having a hard time imagining what salary they could possibly shed. 

 
Kuroda. If it's clear by the ASB that the Yankees won't be contenders, and he's still pitching decently, they'll move him tout de fucking suite.

 

[Brickowski]

I'm sure there's demand for Gardner, and Beltran as well.

 

[mabrowndog]

Nah, if Cashman spends even a penny more on retreads he ought to be fired.

 
Well, break out the scythe. He's just brought the immortal Robert Coello aboard.  :lol:
 
Eric Van (9/5/2010): "He is actually a guy who might be a big-time bullpen solution."
 
Paul M (9/6/2010): "Coello ... will likely be a footnote at the end of the day."
 
Ahhh, the good ol' days of EV's worthless prognostications.

 

[glennhoffmania]

 
1) Right. That's why I noted deferral on salary and minimal prorating of any bonuses.
 
2) Bonuses are prorated for cap purposes, but not salaries. For this year, his salary is $25M. Signing bonus was $10M total over 10 years, so tack on another $1M for that and his 2014 cap figure is $26M. 


I'm pretty sure this is wrong. If he signs a deal that totals 275m, including signing bonuses and salaries, you spread everything equally over ten years. His salary for 2014 doesn't matter. His cap number is 27.5m per year, every year, unless incentives or options kick in.

 

[Lose Remerswaal]

I'm sure there's demand for Gardner, and Beltran as well.

 
I can't think of a Free Agent traded before he played for a team.  I bet there's a reason for that.

 

[mabrowndog]

I'm pretty sure this is wrong. If he signs a deal that totals 275m, including signing bonuses and salaries, you spread everything equally over ten years. His salary for 2014 doesn't matter. His cap number is 27.5m per year, every year, unless incentives or options kick in.

 
Yup, you're right. Chalk up another massive brain fart for me.

 

[EvilEmpire]

 
I can't think of a Free Agent traded before he played for a team.  I bet there's a reason for that.

Why would he need to be? Sure, the more of the season he plays, the less savings there are for this year if they trade him, but the payroll at the end of the season is what matters.

 

[CaptainLaddie]

Even if Beltran didn't have a no-trade, he couldn't be moved without his permission.  Guys who sign a multi-year deal can't be moved in the first year of their deal unless they allow for it.

 

[StuckOnYouk]

Keep in mind this talk of subracting payroll during the season. I find it hard to believe the Yankees are going to compete without ADDING payroll via a trade. So even they do some subtracting, I'm sure some addition will be needed due to the usual injuries, underperformance, etc that goes on with a roster.

 

[Brickowski]

Beltran and Kuroda both have no trade clauses, though. Not that they couldn't be persuaded to waive them but both made it clear they wanted to play only in NY.

No trade clauses are waived all the time. But regardless of the status of individual players, the Yankees have players who might be moved to get under $189. Does Soriano have a no trade?

 

[terrisus]

Keep in mind this talk of subracting payroll during the season. I find it hard to believe the Yankees are going to compete without ADDING payroll via a trade. So even they do some subtracting, I'm sure some addition will be needed due to the usual injuries, underperformance, etc that goes on with a roster.

 
Well, that's assuming they have a reason to try to improve.
If it's June and they're hanging out in 4th place, that might change the focus a bit.

 

[snowmanny]

No trade clauses are waived all the time. But regardless of the status of individual players, the Yankees have players who might be moved to get under $189. Does Soriano have a no trade?

 
I think he can be moved, and the Yankees have $5 Million of his salary on their books.
 
I have a hard time with the premise that the Yankees are going to put together a $195Million dollar payroll with a plan to dump salary if they are in fourth place after 80 games.  I think their payroll is either going to be $188 Million or $225 Million.

 

[Saints Rest]

I'm pretty sure this is wrong. If he signs a deal that totals 275m, including signing bonuses and salaries, you spread everything equally over ten years. His salary for 2014 doesn't matter. His cap number is 27.5m per year, every year, unless incentives or options kick in.

This is what bugs me about the salary cap room that this suspension frees up: Arod's contract isn't voided it's just been altered. Now it's a 9 year contract worth roughly $251million, albeit over a 10 year window. Or if you prefer, a 3 (or 4 year contract) now worth $61million. In a way, it's like a restructuring, So the salary cap should still see a hit in 2014. I just don't get it.

 

[Sampo Gida]

Are you basing your assumption of his remaining salary accelerating on anything other than pure speculation? Because I don't know of anything that would suggest that would be he case. The Angels are paying Vernon Wells $18.6M this year and it's still on their luxury tax - I don't see the difference between paying a guy to go away and paying a guy to play for someone else with regards to how it would be accounted. Sox paid for Renteria for a few years and I'm sure they would have preferred getting it all done at once. There's no logical reason to think it would be accelerated like an NFL signing bonus. He's on the books for the terms of his contract whether they cut him or not.

 
Leaked emails that make someone look bad are sometimes the first step before kicking someone out.  Just speculation on my part.  Not talking about Wells.  Agree his salary paid by the Angles is not part of the LT for the Yankees.  You may be right on Arod being on the books for the term of the contract regardless of if they pay him off in 2015 or not, I was just asking, but the Red Sox did not cut Renteria, they traded him, so I don't think it is comparable. 

 

[bankshot1]

This is what bugs me about the salary cap room that this suspension frees up: Arod's contract isn't voided it's just been altered. Now it's a 9 year contract worth roughly $251million, albeit over a 10 year window. Or if you prefer, a 3 (or 4 year contract) now worth $61million. In a way, it's like a restructuring, So the salary cap should still see a hit in 2014. I just don't get it.

Agreed. To me the AAV of the contract is now (275-25)MM/10= $25MM. 

 

[nattysez]

At the risk of stating the obvious, I think the Slappy ruling means that, unless the MFY view Tanaka as a generational talent or do not stand to save as much from being under $189 as they've previously claimed (per Sampo's posts in-thread), they'll do anything they can to remain under $189 this year.  

 

[King of All Sawdust]

One thing I haven't seen mentioned is they are still going to be hit with a small piece of Arod's LT number.  The luxury tax salary is based on a 183 day season, and he was suspended for 162 of those days, so they will get charged 11.5% (162/183) of his salary.   $27.5MM X 11.5% = 3.156MM.
 

For luxury-tax purposes, teams are charged prorated portions of the deal annually -- so Rodriguez's luxury-tax figure was one-tenth of $275 million, or $27.5 million. But the suspension is for 162 games, not the full 183 days, so the Yankees will be charged the prorated portion of $27.5 million.

 
http://espn.go.com/new-york/mlb/story/_/id/10278277/alex-rodriguez-suspension-reduced-162-games

 

[jon abbey]

One thing I haven't seen mentioned is they are still going to be hit with a small piece of Arod's LT number.  The luxury tax salary is based on a 183 day season, and he was suspended for 162 of those days, so they will get charged 11.5% (162/183) of his salary.   $27.5MM X 11.5% = 3.156MM.
 
 
http://espn.go.com/new-york/mlb/story/_/id/10278277/alex-rodriguez-suspension-reduced-162-games

 
I think that article is wrong, since it was made clear he was suspended for the full season, including playoffs (ha!). 

 

[glennhoffmania]

Yeah that doesn't make sense, even putting aside the full season/playoff issue.  He was suspended for 162 games, not 162 days.  I don't know why ESPN would prorate it based on the number of days like that.

 

[snowmanny]

That is how it is being reported everywhere, though.

 

[nattysez]

Joel Sherman agrees w/ ESPN:
 

As for the Yankees, they get out of a great deal of Rodriguez’s contract for the 2014 season. Because the penalty was for 162 games, not 183 days (what is considered a full season), the Yankees will still be charged $3,155,737.70 toward their luxury-tax payroll. But that means they got out of $24,344,262.30 of the $27.5 million that is the annual charge for A-Rod for luxury tax purposes.
 

http://nypost.com/2014/01/11/a-rods-legal-loss-may-mean-the-end-of-his-career/