Yankees payroll situation headed into 2020 season

The projected MLB luxury tax threshold is $208 million in 2020. This season ended with the Yankees sitting at $201.2M in active payroll. So when you add it arbitration, player options, qualifying offers, and free agency, things could get dicey in 2020.

The Yankees have eight arbitration-eligible players to come to terms with this winter. They include James Paxton, Aaron Judge, Gary Sanchez, Tommy Kahnle, Chad Green, Greg Bird, Jordan Montgomery and Tyler Lyons.

Considering the type of production the first five players had in 2019, each should see a hefty bump in their upcoming salaries.

While Montgomery will contend for a starting rotation spot next spring, the Yanks could non-tender the likes of Bird, Lyons, Jonathan Holder, and maybe even Luis Cessa to open up spots on the 40-man roster — and of course, payroll.

Much like last winter, the need to sign at least one frontline (expensive) pitcher still exists. Even after the trade for James Paxton, who had a stellar time in the Bronx (when all was said and done), not going all out for a bonafide ace will be a significant mistake when you look at the outcome of this postseason and the nature of the overworked Yankee bullpen.

More from Yankees News

• Baseball Reference proves Yankees’ Aaron Judge lives rent free in Boston
• Yankees’ Clay Holmes trade just became even bigger disaster for Pirates
• Mets stealing New York Post’s entire Yankees offseason plan is hilarious
• Yankees add to championship core with Wilmer Difo signing
• Aaron Judge’s ‘breadcrumbs’ showed he was never leaving Yankees, has more moves in mind

However, will the Bombers drop as much as $200 million on free agent Gerrit Cole — $25.2M per year on Stephen Strasburg (should he opt-out) or $21.1M per season on Madison Bumgarner? Even Zack Wheeler is expected to garner a $23.4M AAV on the open market. All these numbers are courtesy of Sportrac.

Considering the Yanks’ penny-pinching ways over the past few offseasons, it’s challenging to imagine. But anything less will not sit well with the fanbase.

As far as player options are concerned, following Edwin Encarnacion’s dreadful postseason, we should expect the Bombers to exercise the $5M buyout in his contract, instead of picking up his $20M option.

Aroldis Chapman holds all the cards with his $15M player option ($17.5M with bonuses). After winning the AL Reliever of the Year Award, there’s little doubt Chapman will opt-out, even if it is to gain a few more years and dollars on his current deal with New York.

Dead money also exists, as Alex Rodriguez will receive the final $5M that the Yankees owe him.

Jacoby Ellsbury has finally entered the last season of his guaranteed contract and will collect another $21.8M (third-highest paid player on the team) before a $5M buyout comes into play in 2021.

With the loss of centerfielder Aaron Hicks to Tommy John surgery, which will reportedly keep him out for 8-10 months, the Yankees must decide whether one of their 2019 surprises in Mike Tauchman can handle the job.

Otherwise, they’ll look to re-sign Brett Gardner (who at 36, doesn’t patrol the outfield like he once did), Cameron Maybin (a 13-year veteran that hasn’t played 147 games in a single season since 2012) or free agent Adam Eaton of the Nationals.

Naturally, another lingering question is whether or not Cashman will extend a $17.8M qualifying offer to shortstop Didi Gregorius. Coming off a down statistical year due to the rust of Tommy John surgery, several clubs would likely sign the left-handed hitter, thereby surrendering draft pick compensation. That is if Didi were to turn down the Yanks’ offer.

Dellin Betances suffered a partially torn Achillies at the worst possible time (pre-postseason and pre-free agency), and although he won’t require surgery, depending on what transpires with Chapman, his time with the Yanks could be up as well.

Backup catcher Austin Romine can also seek greener pastures, which could include a shot of everyday play elsewhere.

While Miguel Andujar will return from a partially torn labrum, the infield is still crowded. Clint Frazier isn’t getting any younger. The club needs to know if he can handle an everyday role or if he’s trade bait. And breakout pitcher Domingo German is facing an extended suspension following allegations of domestic violence.

For a team that got so close to reaching the World Series, there is a lot of work for Cashman to do this winter — the first will of which is finding out if he’s allowed to surpass the luxury tax threshold.