Try as I might, I just cannot understand the mentality of the New York Yankees. On the one side they are preaching a need, not a desire, an actual need to get under the luxury tax in 2014. This makes sense, the new collective bargaining agreement drastically raises the taxes repeat offenders will pay every year. However, if a team falls under the luxury tax amount the tax rate resets. It is one thing to have one of the top three payrolls in the majors, it another to needlessly pay more for the privilege to make that claim. Paying the luxury tax leads to revenue sharing among the other teams and the Yankees have paid $224.2 million in luxury taxes over the past ten years --or slightly less than the Dodgers payroll appears to be for 2013. Staying under the level will allow the Yankees to keep a higher payroll than most while still fielding a contending team. As I said, this makes sense. It is how the Yankees are going about it that leaves me baffled.
The Yankees have made a priority of signing 1-year contracts this offseason to aging veterans. To date they have signed Mariano Rivera, Andy Pettitte, Hiroki Kuroda, Ichiro Suzuki, and Kevin Youkilis. At 33, Youkilis is the youngest player signed by 5 years. They are not a terribly young team, their farm system was generously listed in the top 10 according to Fangraphs. These rankings are in flux right now and will be reviewed and redrafted sometime before opening day. That said, they lack high ceiling pitching in their farm system and given the contracts they are handing out they do not expect any fielding prospects to make an impact in 2013 either. (I am not an expert on minor league systems so if you wish to challenge me on this, please feel free) They still feel they are in a window of opportunity to win the world series and going for it is cash out of their wallet not mine. However, they are overpaying for these additional veterans to the point that they have little to no trade value.
Every year at the trade deadline teams will eat some money and trade a player for a better prospect, the money the Yankees would have to pay to do this makes such moves "head-scratching" at best. As Cots points out in their Yankee spreadsheet, the Yankees have $183 million on the books this season, before including arbitration players or Ichiro's money. In 2014, $75 million for 4 players, and that does not include Robinson Cano, Curtis Granderson, Ichiro, or any of their arbitration players. The luxury tax is $189 million for 2014. So they will have around $115 million to play with, enough to run the entire payrolls of most teams. However, lets assume they go after, and get, Cano for an average value of $20 million a season. Toss in Ichiro's deal at $6.5 for 2014 and the arbitration eligible at $10 million players (currently 8 possible arbitration players, average $1.25 million/player). So 14 players for about $111 million. This leaves $77 million and still there will be holes in center, catcher, the rotation, the bullpen, and possibly shortstop. They will not boot Jeter out the door either, if he wants to play in 2014, he will get paid well to play "the Captain" if not for his on field production.
Add it all up, and that cap space diminishes rapidly. These are the Yankees, they do not do small, they do not deal with minor free agents. They will spend for a big arm because they need pitching, want to win, and do not really have much they can trade to get it right now. I say this thinking that Michael Pineda comes back and is a useful pitcher for them. They need to infuse some youth into their organization, useful, affordable parts that grow into the franchise. These players do not need to take over for the current players, they need to provide cost effective play and serviceable trade chips that their farm system is not currently providing. This would lower payroll while providing more cost certainty going forward. I do not understand their mentality of overpaying veterans this year and expecting anyone to think the same thing won't happen next off-season when their core is another year older and their holes still exist. Maybe they know something I don't, but maybe they have been looking at themselves in the mirror for too long.