Brian Cashman still has a lot of work to do. According to the Yankees’ GM , “there are still steps in the process” to take, but if his master plan precludes adding payroll, Cashman will have to subtract salary before adding more talent.
USA Today recently reported that the Yankees’ actual payroll (AAV, not current salaries) was $241.15 million, resulting in a luxury tax just over $26 million. Based on 2016 contracts, estimated arbitration awards, and minimum-level assumptions for others on the 40-man, the Bronx Bombers only have about $4 million left to avoid exceeding last year’s payout. So, unless the Yankees deviate from their plan to hold the line on spending, Andrew Miller or Brett Gardner may become a casualty of Cashman’s future wheeling and dealing.
Yankees’ Estimated 2016 Payroll
Note: Current Salary is a player’s base salary + prorated signing bonus and applicable buyout. Actual payroll is defined by the CBA as the average annual value of all contracts, and is used to calculate the luxury tax. For players who are eligible for arbitration, estimates from mlbtraderumors.com are used. For other players on the 40-man roster, the CBA prescribed minimum is used ($510,000 for major leaguers; $80,000 for minor leaguers), with a 10% raise for players that have more than a year of service time.
Source: Cots Contracts, fangraphs.com, baseball-reference.com, mlbtraderumors.com, proprietary
Even if the Yankees exceed their self-imposed budget constraints, their bottom line should still be fatter. In fact, at the status quo, the Yankees percentage of revenue spent on player costs would not only be at its lowest level since at least 2000, but it would also fall below last year’s MLB average, which, after this winter’s spending spree, is headed in the opposite direction of the Bronx Bombers’ outlay.
Yankees’ Payroll/Luxury Tax as a Percentage of Team Revenue, 2001 to 2016E
Note: For 2001 to 2014, revenue is based on Forbes projections and net of revenue sharing and stadium debt service. Payroll is based on final figures for each year released by MLB, and may not necessarily equal the amount upon which the luxury tax is based.
Note: For 2015 to 2016, revenue is based on 7% growth, which matches CAGR from 2003 to 2014 (but is less than recent growth rates in wake of new long-term regional and national TV deals with build in escalators). Payroll is based on an adjustment to reported actual payroll of $241,150,000 commensurate with 2014 and carried forward to 2016 (when current payroll is reported, this number will be updated).
Source: bizofbaseball.com and MLB releases published by AP (final payroll), MLB releases published by AP (luxury tax) and Forbes (revenue)
So, why are the Yankees being so frugal in a deep free agent class with so much difference-making talent? One reason is because Hal Steinbrenner doesn’t believe he should “have to have a $200 million payroll to win a world championship”(despite charging the highest prices in the league and enjoying taxpayer subsidized financing), but, regardless of motive, the Yankees new ways of doing business have made it necessary for fans to be just as familiar with the team’s payroll as its 40-man roster. So, as a service to Yankee fans, the Bronx Bombers’ 2016 payroll and future commitments will be maintained on the aptly named tab above. Consider it a new kind of scorecard for Cashman’s unfinished business…one that measures success in dollars saved, not games won.