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Hal Steinbrenner wants the Yankees’ payroll down to $189 million by 2014

Mar 1, 2012, 1:16 PM EDT

Hal Steinbrenner

Hal Steinbrenner said today that the Yankees plan to decrease their payroll to below the $189 million luxury tax figure by 2014, which is when the new collective bargaining agreement threshold kicks in.

Steinbrenner called it “streamlining” the payroll, which is currently at around $210 million.

Wallace Matthews of ESPN New York notes that Alex Rodriguez, Derek Jeter, CC Sabathia, and Mark Teixeira are already under contract for $75 million in 2014, which would leave about $110 million for Robinson Cano, Curtis Granderson, and 19 other players.

Obviously a $189 million payroll is still massive, even looking ahead to 2014, but the Yankees’ payroll hasn’t been below $200 million since 2007, when it was $190 million. Since then their annual payrolls have been $209 million, $201 million, $206 million, $203 million, and now $210 million.

Toss in the usual inflation of player salaries and $189 million in 2014 would represent a pretty significant change.

  1. tigers182 - Mar 1, 2012 at 1:22 PM

    How are they expected to compete?!

    • kgsmith - Mar 1, 2012 at 3:26 PM

      uhm, quit buying talent and championships and go back to “home grown” talent. They brought talent like Jeter and Rivera up through the minors, let the scouts do their jobs, and bring in more kids with skills rather then paying 25 million for (alleged) juicers.. just a thought.

      • nflfollower - Mar 1, 2012 at 6:38 PM

        Tigers comment seemed like sarcasm to me. Of course, at the rate they’re going in Detroit, the might surpass the Yanks.

  2. Baseball Beer Burritos In That Order - Mar 1, 2012 at 1:36 PM

    My Mets are hoping to “streamline” the fanbase by then, from the look of it.

  3. sdelmonte - Mar 1, 2012 at 1:38 PM

    This is why the Yankees traded for Pineda. If things go the way Cashman hopes, he will have one highly priced starter in CC, and four young guys – Pineda, Nova, those prospects everyone is high on – whose combined salaries even after arbitration will be lower than CC’s.

    The elephants in the room are Tex and A-Rod’s contracts.

    • cur68 - Mar 1, 2012 at 2:01 PM

      Kudos on not grabbing the low hanging fruit that is CC Sabbathia and the phrase “elephant in the room”. I couldn’t have laid off that sweet fastball down the middle.

      • sdelmonte - Mar 1, 2012 at 2:13 PM

        Yeah, but his sweet fastball down the middle is too good for me to make contact with.

  4. yankeesfanlen - Mar 1, 2012 at 1:46 PM

    If we find great FAs or trades, sign them, go to $240M if needed, pay the tax. Why do any different after 92 years?

    • kgsmith - Mar 1, 2012 at 3:32 PM

      see that is where the problem is in baseball. The other teams have what are called “farm systems”.. this is where players are generally selected from the draft and brought up from single A to the majors. The Yankees however, feel that buying World Championships is competition. Its not.. This is why when A-roid and Clemens were under the microscope for his juicing (allegedly), and now Cashman with his mistress (allegedly) I have no sympathy for them.. Yes they are human also, I get that, but really? With the money these players make, buy a gym, and rent a hooker. but then again, when you are a cheating organization, your employees just follow lead..

      • 18thstreet - Mar 1, 2012 at 5:19 PM

        I hate the Yankees, but I fail to see what Brian Cashman’s love life has to do with any of this. That was a cheapshot.

      • dano1262 - Mar 1, 2012 at 5:55 PM

        Met fan crying like a b****!

  5. sndvl99 - Mar 1, 2012 at 1:50 PM

    Are you kidding me? This is like saying that your alcoholic father is cutting down from 2 liters of Jack Daniels to 1 and 3/4. #NonStory

  6. stex52 - Mar 1, 2012 at 1:56 PM

    110 MM$ is as more than the majority of the league spends now. And you are starting with four very good players, at least three of whom will probably still be performing at high levels. It may be an ugly process, but I think the Yankees can do it and win. The trick is to wean off of the aging free agents and develop the farm system (which is pretty good now) more. But they will lose a couple of their hot commodities in the process. Just get value in trade for prospects.

  7. phukyouk - Mar 1, 2012 at 1:59 PM

    I think that what alot of people don’t get is that it not only puts them under the threshold but it also resets the clock. of course in 2015 they will be back in the 200 range but instead of paying a 40%+ luxury tax they will be back to the minimum 17% and then 18% the following year and so on. its more than just saving 10 Million one year. its saving close to $60 over the subsequent years.

  8. renorocker - Mar 1, 2012 at 2:08 PM

    “Down To” and “189 million” should never be used in the same sentence.

  9. uyf1950 - Mar 1, 2012 at 2:15 PM

    It can be done. Not easily but it’s certainly doable. After the 2013 season the Yankees will probably only have 4 “high” priced players on their payroll (A-Rod, CC, Tex and Cano). By high priced I mean with an AAV for luxury tax purposes of $10MM or more. Those 4 players will account for about $95MM of the $189MM target number. That leaves them with about $85MM to fill out the rest of the roster. And still leaves them about $10MM to allow for benefits, etc…

    Like I said not easy but doable. BTW, probably Granderson, Swisher and Martin will not be renewed when their contracts expire. Unless Cashman and the accountants can come up with some very creative way(s) to keep one of them and still get until the threshold. My guess is all 3 are gone and replaced via trades similar to what the Yankees did with Montero to get Pineda and some positions filled with prospects like Romine or Heathcott or Banuelos, etc…

    • proudlycanadian - Mar 1, 2012 at 2:24 PM

      There is a future HOF closer who will probably retire after the season.

      • uyf1950 - Mar 1, 2012 at 2:28 PM

        Yes, and probably replaced by David Robertson or who knows maybe in 2014 by the newest Yankee David Aardsma. The Yankees will have a lot of options pitching wise come the 2014 season. Maybe even some they could use as trade bait to get a good and relatively inexpensive position player.

        Just saying where there’s a will there’s always a way.

      • phukyouk - Mar 1, 2012 at 4:08 PM

        WHO?!?

      • Kevin S. - Mar 1, 2012 at 7:29 PM

        People I’d rather have closing in 2014 than David Aardsma: David Robertson, Joba Chamberlain, Phil Hughes, Dellin Betances, AJ Burnett. Aardsma’s low-leverage filler.

  10. Glen - Mar 1, 2012 at 2:25 PM

    And that year they’ll miss the playoffs, and go on a spending spree again the following offseason.

    Cashman is a genius!

  11. deathmonkey41 - Mar 1, 2012 at 2:35 PM

    Can players re-work contracts to help with salary relief for the luxury tax like they do in football to get under the cap?

    • churchoftheperpetuallyoutraged - Mar 1, 2012 at 2:39 PM

      The Luxury Tax is based on AAV of the contract, so unless they pull a bunch of Bobby Bonilla-esc contracts out, it’s going to be rough.

    • uyf1950 - Mar 1, 2012 at 2:53 PM

      The only thing that can help the Yankees as far as their current players that have contracts for 2014 and beyond. Is if A-Rod retires after the 2013 season takes a year off (2014 season) decides to be reinstated “ala Manny being Manny”. Then the Yankees resign him for the 2015/16/17 and 2018 season for the same money that was left on his contract had he not retired after the 2013 season with 4 years left. BTW that amount is actually about $85MM because A-Rod’s contract was front loaded. So his AAV in the very, very highly unlikely case would be a little over $21MM for 2015 through 2018. Instead of the $27.5MM it actually is today. And since he would be retired for the 2014 season under my example the Yankees have a $27.5MM savings against their payroll.

      But If I haven’t made it clear that’s not going to happen.

  12. rob0527 - Mar 1, 2012 at 2:54 PM

    Why r the Yankees worried about cap, they print money in new stadium and r a huge draw on the road. If u r willing to spend 189 million what’s a few million more to guarantee a good team, it’s not like they can’t afford it.

    • phukyouk - Mar 1, 2012 at 3:04 PM

      60 Mil is 60 Mil no matter who you are

      • 18thstreet - Mar 1, 2012 at 5:24 PM

        Not really true. There are some people in this country who are so rich that their investments earn more than $20 million per year. And that’s just the stuff that’s not hiding in offshore Cayman Islands accounts.

        I think you underestimate just how rich being in the one percent really means. Hank Steinbrenner’s lifestyle will change not one iota without $60 million over 5 year. His father worked hard to make sure Hal never has to, and the Republican Party is working very hard to make sure that it stays that way.

      • bigharold - Mar 1, 2012 at 10:25 PM

        “Hank Steinbrenner’s lifestyle will change not one iota without $60 million over 5 year.”

        It’s not merely a matter of the Steinbrenner family. They are the majority owners but there are lesser partners and they want dividends too. And, clearly the notion that just spending money is the answer doesn’t work. If it was that simple the Yankees would be WS champs just about every year.

        In order to be the dominant MLB franchise that they want to be, to be The New York Yankees, they need to be smarter. Just throwing money at problems will not work in the long run. Nor will trying to do it completely in house with the farm system. In order to be a successful franchise in the 21st century the Yankees will need to sign big ticket free agents, .. but the right ones, .. not the biggest one every off season. They will need to make intelligent trades, .. like Swisher, Granderson and hopefully Pineda. And, they’ll need the farm system. Relying too much on free agency is not only an expensive but risky tactic as it tends to paint the team into a corner with heavy contracts. More importantly it stunts the development of young talent. Once the Yankees sign, for example Teixeira all the sudden they don’t have a need for a young 1B or even power hitter that could be put at first just to get his bat in the line up. They lose draft picks when they sign other FA.

        If the Yankees want to win in the 21st century like they did in the 20th, then they will need to operate smarter and use all avenues at their disposal. Throwing money at problems is usually not the best thing.

        Also, 20 mil here, .. 30 mil there, .. after a while that is going to start adding up to real money.

  13. WhenMattStairsIsKing - Mar 1, 2012 at 3:34 PM

    Man. $189 million doesn’t go as far as it used to, eh?

  14. Ari Collins - Mar 1, 2012 at 3:35 PM

    Pretty impossible for them to do. It’s actually $179MM or less they’d have to get to, because medical expenses are factored in for luxury tax purposes. And A-Rod, Tex, CC, and Jeter combine for $88.4MM for luxury tax purposes. So that leaves $90MM for 21 roster spots, or a little more than $4MM per player. That means a roster of four good players, only one of whom currently plays like a superstar, and 19 players who are either cost-controlled or free agent role players. No good free agents. No re-signing Swisher, Martin, Cano, or Granderson.

    I don’t see the Yankees getting down to a pre-2004-sized payroll when salaries have gone up so much over the last 10 years. But it’ll be interesting to see if they can pull it off.

    • Ari Collins - Mar 1, 2012 at 4:06 PM

      In the next two years, it would almost definitely mean letting go of one of Swisher and Martin this year, and letting go of one of Cano and Granderson the next.

      It would also mean passing on elite FAs like Hamels, Greinke, Cain, Lincecum, Jimenez, Josh Johnson, Garza, Carpenter, Votto, Napoli, Hamilton, Asdrubal Cabrera, and Ellsbury.

      • phukyouk - Mar 1, 2012 at 4:09 PM

        if they backload contracts wouldnt that help with FA’s?

      • Kevin S. - Mar 1, 2012 at 4:18 PM

        No, because MLB looks at the AAV of a contract, not the amount of a given year.

      • uyf1950 - Mar 1, 2012 at 4:30 PM

        Ari, it is doable. Here I’ll show you how. I’ve even included in the list an allowance for A-Rod hitting one of the milestone incentives. I think my math is correct. But you’re welcome to check it. Even if it’s off by a little bit I think you get the idea.

        POS…………… NAME ……………………………….2014
        C……………..Austin Romine………………………$500,000
        1B………….…Mark Teixeira…………………….$22,500,000
        2B……………Robinson Cano…………………..$20,000,000
        SS/DH…….…Derek Jeter………………….…….$14,000,000
        3B/DH…….…Alex Rodriguez…………………..$27,500,000
        LF……………Brett Gardner…………..………….$7,000,000
        CF……………Could be Granderson or TBD… .$18,000,000
        RF………..….Prospect TBD (Heathcott)……..…..$500,000
        DH/Util Inf.….DH / Util. SS – Player TBD………$2,000,000
        SP1………….CC Sabathia……………..………$24,400,000
        SP2………….Michael Pineda……………….…..$3,000,000
        SP3………….Ivan Nova…………………………..$3,000,000
        SP4…..….….Manny Banuelos………..…..………$500,000
        SP5……………Phil Hughes…………………………$7,000,000
        CL…….………David Robertson…….……………$7,000,000
        SU…….………Set up man (Joba)…….…………$5,000,000
        RP…………….Cory Wade…………………………..$600,000
        RP……….……Adam Warren…………..…….…….$500,000
        RP……………Dellin Betances………….………….$600,000
        RP……………Relief Pitcher…..………………….$1,000,000
        RP…………….Relief Pitcher…….…..…..……….$1,000,000
        C……………..Francisco Cervelli…………………$1,500,000
        Util.-SS…..…..Eduardo Nunez………………..….$1,800,000
        Util.-OF…..….Chris Dickerson…………..……….$1,500,000
        Util.-OF Prospect/Rookie (ie:Justin Maxwell)………$500,000
        15……………Balance of 40 Man Players…….….$2,000,000
        ………………Player benefits, Incentives, etc……$10,000,000
        ………………Incentive (A-Rod)……………………….$6,000,000
        TOTAL Payroll………………………………………… $188,900,000

      • Ari Collins - Mar 1, 2012 at 6:22 PM

        Good math overall, but I think your premise is unsustainable.

        For one thing, Cano and Granderson are MVP candidates, and aren’t going to re-sign at an average of $19MM a year.

        The next issue is the prospects. Romine isn’t that great (though Gary Sanchez has a chance to be), and neither Mason Williams nor Slade Heathcott are all that good either. This team would depend on an OF prospect, a C prospect, and Manny Banuelos all working out. Prospects don’t always work out, and you can’t depend on three specific positions to be adequately filled. What’s more, only Banuelos has star talent on the farm, and New York rarely has patience to work in guys who will take some adjustment time to be valuable-at-the-minimum-but-not-particularly-good major league regulars.

        And even if those prospects work out, you’re talking about taking a 95-win team and putting a lot of replacement level players in. Just Swisher and Martin alone is 7 wins knocked off. Not to mention further likely decline from Tex as he gets to his mid-30s, and A-Rod and Jeter near the end of their late 30s. They’re going to need younger reinforcements from free agency or trades to replace the production from their core getting older.

        Basically, yeah, it’s mathematically possible to get under the threshold and put a good team on the field, if several prospects work out well, Cano and Granderson give them discounts, and no one gets old. But that’s an awful lot of ifs. I doubt they all come true, and I very much doubt that the Yankees are willing to go cheap even if it all works out.

      • uyf1950 - Mar 1, 2012 at 7:19 PM

        Ari, the point is it’s doable. Besides I didn’t expect you to agree with me. But there is always the opportunity to shift money I’ve allocated from 1 player to another. But first let me comment on:
        1) Cano will be 31 when his option year expires and he enters the 2014 season. I think but obviously I could be wrong that $20MM per should be enough to get the job done.
        2) Granderson will be 32 when his option year expires and entering the 2014 season. Is $18MM per enough to secure the services of a 32 year old CF’er. I think so. But if I’m off a little bit so it. There are a pretty good array of players that should hit the FA class of 2014 that I would think the Yankees could sign.
        Also as you should have noticed I’ve included $6MM in milestone incentive in the 2014 number for A-Rod. Now the Yankees may or may not need to use that for that purpose. It may be money they can use to increase their payroll. A-Rod needs 31 HR’s to reach Mays which he could reach the end of the 2012 season or early in the 2013. But he needs 85 HR’s to reach Ruth’s total and the next milestone incentive. To reach that milestone he has to average 28 HR’s in each 2012, 2013 and 2014. Can he do it, possibly but it’s far more likely that he would reach that level in the 2015 season. If that’s the case that gives the Yankees $6MM more to spend on their 2014 payroll and still stay under the $189MM tax threshold. In any case they would have a much better idea if that money is available during the 2013 season in plenty of time to use it for players salaries if need be. Be it to increase offers to Cano and or Granderson or some other player.

        So while I appreciate your concern of my numbers and quite frankly your skepticism I think they are far more accurate and realistic then you’re willing to give them credit for.

        As for Martin and Swisher. We’ll know something about those 2 after the 2012 season since both will be FA’s. I’m just not as ready as you appear to be to write off the Yankees prospects for those positions. Whether it’s Romine or Sanchez (for the 2014 season if Sanchez is put on the fact track) or in the case of Swisher whether it’s Heathcott or Mason Williams (again if he makes the fast track to the big leagues) in 2014. The point is there are options. And I think it’s not going to be as impossible as some may think or as devastating to their chances of making the post season in 2014 and beyond again as some think.

        But all of this is speculation on my part. We’ll see what the people that actually make the decisions do.

      • Kevin S. - Mar 1, 2012 at 7:38 PM

        FWIW, there’s no way Robertson’s making $7 million in 2014. I think he’ll be a first-year arb player, and only the elite get that much in Arb1, but even if it’s Arb2, the cynic in me says the Yanks let Soriano close in 2013 (if Mo retires) to depress Robertson’s arb number, since there’s really little effective difference between A) their abilities when healthy and B) the eighth and ninth innings.

      • uyf1950 - Mar 1, 2012 at 8:05 PM

        Kevin S – actually Robertson was 1st year arbitration eligible this past winter, he and the Yankees agreed on a $1.6MM salary for 2012. He will be a 3rd year arbitration eligible player for the 2014 season. So the $7MM might be just a touch high but certainly not very much.

      • Kevin S. - Mar 1, 2012 at 11:29 PM

        Huh. Right you are. I could have sworn he was still pre-arb.

  15. dparker713 - Mar 1, 2012 at 4:06 PM

    This means ticket prices are coming down, right?

  16. randygnyc - Mar 1, 2012 at 4:51 PM

    Lol @ the idea the Yankees would ever consider letting Cano go if his performance levels don’t deteriorate. Every decade the Yankees have a lifer. Cano is the next one.

  17. yankeesfanlen - Mar 1, 2012 at 5:37 PM

    Can we stop this? Okay, PRETEND that the Universe is trying to get under the luxury tax, then count the minutes before Hal says “screw it let’s buy the best talent” .
    People who drive 7-series don’t trade them for ’86 Yugos.

  18. gorilladik81 - Mar 1, 2012 at 5:43 PM

    Please just get rid of arod, the worst contract ever

  19. ogre2010 - Mar 1, 2012 at 6:15 PM

    He’s LYING!!

  20. klingonj - Mar 1, 2012 at 8:23 PM

    Let’s just say they are able to bring down the payroll where they don’t pay any luxory tax, who then supports the Marlins and Pirates owners that are more interested in pocketing the MLB revenue sharing than improving their teams. The wailing and gnashing of teeth by the so called ourists is laughable.

    • Ari Collins - Mar 1, 2012 at 10:08 PM

      Luxury tax doesn’t go to other teams. You’re thinking of revenue sharing.

  21. bobwheel - Mar 1, 2012 at 8:56 PM

    “uhm, quit buying talent and championships and go back to “home grown” talent”

    Are you serious? guess Cano, Robertson, Joba, Hughes, Nova, Betances, Banuelos, Cervelli, Romine, and Nunez aren’t enough in addition to Jeter and Rivera?

  22. uscthom78 - Mar 1, 2012 at 9:23 PM

    So the DONs no longer “investing” in the yanks. How interesting.

  23. ta192 - Mar 1, 2012 at 9:45 PM

    I’m hoping they can get down below $100 million…quickly…

  24. dirtyharry1971 - Mar 2, 2012 at 12:24 AM

    now if only the MLB would concern themselves with the teams that won’t spend anything like the jays, pads, pirates, KC, ect

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