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The 2020 Yankee Budget

As we prepare for the 2020 free agent sweepstakes to get into full swing, I thought that I would briefly cover the Yankees’ 2020 payroll at present and how much room they might have to make additions.

According to Spotrac, the Yankees are presently at $199.2 million in total player salaries for 2020. A few points:

This includes $26.1 million for Jacoby Ellsbury which the Yankees have refused to pay (but will almost certainly have to pay in whole or in part).

It includes the last $5 million for Alex Rodriguez which I mention in case anyone was in a good mood.

It does not include any money for Luke Voit, Mike Ford, Gleyber Torres, Miguel Andujar, Domingo German or Jonathan Loaisiga.

It assumes that the Yankees will pay Gary Sanchez, Aaron Judge and James Paxton, Tommy Kahnle and Chad Green on one-year deals as opposed to signing them to extensions.

Adjustments

Let’s make the following adjustments:

Add $3.5 million for Voit, Ford, Torres, Andujar, German and Loaisiga.

Add $15 million for player benefits.

Add $2.5 million for minor league contracts.

Assume that Kyle Higashioka replaces Austin Romine as the backup catcher for $500,000 or so per year.

Assume that Clint Frazier finally gets his chance for $500,000 or so per year.

This gets us to $221.2 million in total payroll.

Competitive Balance Tax

There is a competitive balance tax which is as follows:

20% on amounts from $208 million to $228 million.

32% on amounts from $228 million to $248 million.

42.5% on amounts over $248 million (plus the movement back by 10 slots of the highest draft pick).

Needs

The Yankees seem to be set at all five infield spots (with Torres moving to shortstop).

They are somewhat set all 3 outfield spots (Judge, Stanton, Gardner and eventually Hicks) although outfield depth is a bit sketchy given Stanton’s injury history, Gardner’s age, and Frazier’s questionable ability to play defense.

They are set at DH as they have an extra man at first (Voit or Ford), third (Andujar and Gio Urshela) and Frazier can hit well enough to DH.

Dellin Betances became a free agent and based on their previous behavior, I’d guess that the Yankees would not mind adding another reliever.

The Starting 5 (Luis Severino, Paxton, Masahiro Tanaka, Jordan Montgomery and German (when he returns from his certain suspension) seems pretty good. J.A. Happ is still under contract and they have Michael King, Deivi Garcia (if his command improves), Clarke Schmidt and Miguel Yajure in the high minors.

2021

The Yankees have some major payroll relief coming in 2021.

Ellsbury’s $26.1 million will go away.

They will finally be free of Alex Rodriguez, saving $5 million from 2020.

Unless the Yankees somehow have J.A. Happ start 27 games or pitch 165 innings, his $17 million will go away.

James Paxton is scheduled to be a free agent and his $12.9 million projected salary will go away.

Masahiro Tanaka will be a free agent saving $23 million.

D.J. LeMaieu will be a free agent although I’m guessing he will be re-signed at a decent salary increase.

That’s $84 million dollars (not including LeMahieu). Now some of that will be chewed up by continued raises in arbitration and salary bumps to Judge, Sanchez, Montgomery, Torres, Urshela, Andujar, etc. But the Yankees should still have some room to get under the $250 million second level cap in 2021 if they are over it in 2020.

Wants

Everyone wants the Yankees to sign Gerrit Cole. I’m not sure what more I can do to add to what’s already been written here other than to remind everyone that based on previous history with starting pitchers, you are buying an elite pitcher for just two years (most likely). It’s downhill after that so you have to believe that Cole substantially increases your chances for a title in the next two years, because after that the results are mixed.

As noted, another $13 million reliever would be nice.

Conclusion

I’m not sure that Gerrit Cole even wants to sign with the Yankees, but the question is, can the Yankees “afford” him if they want to in 2021 without getting into serious salary trouble going forward?

My answer is a cautious yes. I can see a 2021 rotation of Cole, Severino, German, Montgomery and one of the AA/AAA kids being quite manageable salary-wise even without Paxton or Tanaka, much as I’d be sad to see Tanaka go.

I’m not saying that the Yankees should do this. They will have to sign some big money extensions for Judge, Sanchez and Torres in the not too distant future. These are core Yankees and I would be surprised to see the Yankees let them go. Those three deals in the $25-$35 million range will add up to $100 million or so which is a lot of money, even for the Yankees.

My gut at present is that the Yankees will add another reliever as well as perhaps some outfield depth and that they will pass on a name starter.

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