Yankees current payroll could derail plans for contract extensions

James Paxton #65 of the New York Yankees (Photo by Elsa/Getty Images)
James Paxton #65 of the New York Yankees (Photo by Elsa/Getty Images) /

The Yankees will have several high-priced free-agents following the 2020 season and a few players amid their arbitration years. So if you thought that Yankees general manager Brian Cashman had his work cut out this winter, just wait until next.

Every team has a World Series window of opportunity — that they can take advantage of because of budding stars still within their arbitration years, or by acquiring low(er) cost players that blossom before they are set to re-enter the open market. That’s where the Yankees currently find themselves.

Although the Yanks have not reached a Fall Classic since winning it all in 2009, in two out of the last three seasons, the Bombers have met the Houston Astros in the ALCS, only to come up short.

Signing Gerrit Cole to a nine-year, $324 million contract with a fifth-year opt-out and full no-trade clause, hopefully, gets this club over the October hump.

However early as it may seem to talk about next offseason, D.J. LeMahieu, James Paxton and Masahiro Tanaka will become free agents.

More from Yankees News

LeMahieu was the steal of the decade last winter when he signed a two-year, $24 million deal. If he can duplicate his level of production from ’19, he’s in line for an enormous payday.

Tanaka is on the books for one last payment of $23 million, and Paxton is in his final year of arbitration, where he is estimated to command close to $13M.

While Tanaka was average during the 2019 regular-season, he’s been outstanding in the playoffs since joining the club in 2014. As for Paxton, a slow start to ’19 culminated in 10 consecutive wins down the stretch where he showed all the signs of a legit No. 2 that should benefit pitching behind Cole immensely.

Although Tanaka has learned how to pitch with a partially torn UCL effectively, he’s a ticking time bomb — and at 32, he’d need to take a drastic pay cut to stay in the Bronx.

Therefore, it may be more advantageous for the Yankees to give that extra money to Paxton and move No. 1 prospect Deivi Garcia into the rotation (if he’s ready). The club should still have Jordan Montgomery and Domingo German at its disposal as well — to round out the rotation.

Naturally, you’ll hear plenty of clamoring for the Yanks to buy out the remaining arbitration years with long-term contract extensions for the likes of Aaron Judge, Gary Sanchez, and even Gleyber Torres, who is still pre-arbitration. It’s a growing trend in baseball that a team like the Braves has taken full advantage of with Ronald Acuna and Ozzie Albies.

However, low-cost salaries are the reason why Cole was signed, Aroldis Chapman re-signed, and Adam Ottavino inked last winter. Sure, it makes sense to lock up Judge and Torres, especially, for the next 7-10 years, but that will increase their salaries beginning in 2020, substantially. In turn, that could lessen the chances of bringing back LeMahieu, Paxton, or Tanaka next year due to the rising luxury tax threshold.

This isn’t the NFL; players aren’t going to hold out or demand a trade because they want their money now. While it may be in the clubs best interest to sign a young player sooner rather than later as to avoid extra millions, at this time, an exception exists.

As of today, the Yankees’ payroll is $240M. Throw in another $15M in player benefits, and $2.5M in minor-league salary, and the Yanks’ total luxury tax allocation is $258M — some $50M over the initial penalty. If the organization exceeds $248M (the highest penalty tier), not only would they incur a 75 percent penalty, but their top draft pick in 2021 would fall 10 spots.

Winning a World Series could change Hal Steinbrenner’s stance on any penalty he’s likely to incur next season. Because what’s an estimated $7M luxury tax bill when you’re making hundreds of millions in revenue due to championship No. 28. It worked out just fine for the 2018 Red Sox.

And it’s not like salary won’t come off the books. As you read this, Cashman is trying to unload J.A. Happ and his $17M contract this year (plus a vesting option for another $17M in 2021).

While Giancarlo Stanton could opt-out of the final eight years on his contract, I don’t see him leaving a $233M on the table — especially if 2020 resembles anything like last season.

Zack Britton also has a player option for $13 million in 2021; however, considering the ever-increasing price teams are giving to relief pitchers, I wouldn’t be surprised to see Britton pass on the final two-years, $27 million ($14M team option in ’22) to hit free agency in search of closer-type money.

Next. Yankees fire strength and conditioning coach. dark

Sure, Brett Gardner may retire following the 2020 season (or sign another one-year deal), and the Yanks will be entirely out from under Jacoby Ellsbury’s burden (depending on the outcome of the MLBPA grievance). Even still, the Yankees will be hard-pressed to re-up any players until the roster has been flushed out following next season. It’s a risk they’ll be forced to take unless Steinbrenner allocates even more funds for players already signed.