Yankees avoid arbitration with all eight eligible players
The Yankees recently avoided arbitration hearings with all eight arbitration-eligible players–Didi Gregorius, Sonny Gray, Dellin Betances, Adam Warren, Aaron Hicks, Tommy Kahnle, Austin Romine and Chasen Shreve.
Recently, all eight arbitration-eligible players agreed to one-year contracts to remain with the Yankees.
Salary arbitration is available to players who have at least three years of major league service, but less than six. If a contract is not agreed upon between the player and the team by a pre-determined deadline in mid-January, a hearing is held to decide the player’s next year wage.
After the 2017 season, the Yankees had eight players who did not have a contract for 2018 but were eligible for arbitration, many of which are key parts of the team. All of whom agreed to contracts before the arbitration deadline.
All eight of these players received pay increases from last season, which are typical results of players who are eligible for arbitration. Salary increases ranged from the 145 percent increase of Kahnle’s new contract to Romine’s 37 percent.
The important point to take away from this is that the Yankees are not only retaining key pieces to a successful team but are doing so in a cost-concerned way. This new style of the Yankees, saving money instead of spending excessive amounts, is the force driving the push to avoid arbitration.
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Last off-season, the Yankees avoided arbitration with all but one of their eligible players, Dellin Betances, which did not result in positive relations between the club and the player. Along with the negativity that resulted, Betances saw his salary increase by almost 500 percent, even in a lost arbitration hearing.
By avoiding all hearings this offseason, the Yankees potentially saved millions of dollars, which could be used to avoid having to pay a luxury tax at the end of this coming season or fund a top starting pitcher. Or both!
With a total team payroll of $157,870,357 as of now, the Bombers still have around $39 million until they reach the competitive balance tax of $197 million. That much room could become useful down the road.
Last season, the Yankees payroll reached $224,458,752, of which $19,314,265 was applied toward pre-arbitration players whose contracts were at most one-year long.
If we were to assume that the Yankees will employ a similar number of pre-arbitration players with one-year or less major league contracts, that leaves the Yanks with close to $20 million left until reaching the threshold. Coincidentally, Yu Darvish, one of, if not the top arm of free agency, has a market value of about $21.9 million per year.
However, while comparing recent former free agents with similar credentials as Darvish, including age and position, Darvish’s value per year was found to be around $17.2 million.
Calculations of this $17.2 million include the creation nine linear regressions comparing statistics of 26 former free agent starting pitchers to the average annual salary of each players’ new contract. Afterward, each of the nine-resulting salary prediction was averaged together to conclude with the $17.2 million.
Now that the Yanks have settled these eight loose ends, the team can focus on pursuing additional talents to achieve a World Series championship, such as Darvish, or use the excess salary room to hunt for an additional asset in the form of a trade.
Next: Yankees: 6 infield trade targets for the offseason’s final month
Either way, the Yankees look to be in good shape to stay below the tax threshold, saving millions of future dollars, all because arbitration was avoided in eight different forms this offseason.