An enormous challenge awaiting GM Brian Cashman is determining salaries for arbitration-eligible players. According to MLB Trade Rumors, the New York Yankees and the Tampa Bay Rays have the most arbitration-eligible players at 19. The two Los Angeles teams and the Arizona Diamondbacks have the least number of such players with five.
MLB Trade Rumors employs Matt Swartz’s algorithm, which has been quite accurate in the past, to estimate the arbitration salaries of those who are eligible. If the Bronx Bombers were to pay Swartz’s projected arbitration salaries for everyone eligible, the total amount would be $80.6 million. This would be in addition to the $136 million the Yanks are contractually obligated to shell out for 2022.
We’ll get to that later, though.
MLB teams have the option to offer their players a contract or non-tender them. Players become free agents if they’re non-tendered. When players reach arbitration eligibility, they earn more say over their own salaries. Teams and players can negotiate a one-year deal before the arbitration deadline, which is what commonly occurs.
Alternatively, both sides can file their preferred salary amounts and then meet with an arbitrator, who decides how much a player should receive. Agents and MLB teams establish arbitration salaries by looking at comparable players, statistics, and other factors.
So let’s get into how this might be a problem for the Bombers this offseason.
The expiration of the collective bargaining agreement
This year a monkey-wrench has been thrown into the process. The deadline to offer contracts to club-controlled players this year is Dec. 2. However, the present collective bargaining agreement runs out on December 1.
If no agreement is in place, MLB and its 30 owners could immediately implement a lockout. Also, players can decide to walk out and strike. Either of these events would halt player transactions, probably until a new deal is reached. This would obviously interfere with the Yanks’ roster-building strategies.
Before Cashman can make any expensive roster changes, it would be advantageous for him to know what any new rules regarding the luxury tax threshold may be implemented. Will there be escalating financial penalties for exceeding the tax again, and, if so, how much? Or will MLB, the owners and players opt for a different approach? We will have to wait to find out.
A long, drawn-out negotiation process will likely hurt Cashman’s ability to execute a fluid offseason plan.
According to Cot’s Baseball Contracts, the Yankees appear to have cleared the 2021 luxury tax threshold of $210 million. Adding a $135 million base payroll to the estimated $80 million in arbitration salaries would produce a total salary budget of $215 million for 2022.
How will Brian Cashman handle the Yankees’ arbitration salaries?
Opportunities still remain for Cashman to navigate the uncertainty of the final outcome of the negotiations. For example, Aaron Judge says he wants to be a “Yankee for life,” and the club could work out a multi-year extension for him sooner than later.
Of course, the Bombers are under no obligation to offer every arb-eligible player a contract. Cashman can significantly reduce the team’s $215 million salary budget by designating non-tender candidates in the short run. He can also sign arbitration-eligible players and trade them during the offseason if he feels they have a market value. For example, Joey Gallo ($10.2 million), Domingo German ($2.1 million), Gleyber Torres ($5.9 million), and Chad Green ($4.1 million) could all be considered attractive options to other clubs.
Either way, Cashman will want to avoid a situation where the Yankees organization and eligible players have unsettled contract situations. Thus, he will likely want to issue the desired contracts before Dec. 2.
The biggest challenge for the Yankees GM will be to design a strategy that will allow the team to retain their high-quality core players while improving the competitive nature of the Yanks within a pre-determined budget. To accomplish this, Cashman will probably have to let some of the club’s free agents go (e.g., Cory Kluber, Joely Rodriguez, Brett Gardner, and Darren O’Day) and non-tender several arb-eligible players to create more space to sign free agents.
Possible non-tender candidates include Gary Sanchez ($7.9 million), Clint Frazier ($2.4 million), Miguel Andujar ($1.7 million), and Tim Locastro ($700,000). And, as noted above, the Yanks can also decrease their salary budget through trades.
The need for the Yankees to address roster deficiencies before the 2022 season
As fans know, the Boys in Pinstripes have holes to fill in the middle of the infield before the 2022 season gets underway. Given the free agent market this year, there’s an excellent opportunity to pursue an elite player at shortstop. Also, if Sanchez has played his last game as a Yankee, the club will have to obtain a new starting catcher, most likely via trade. Aaron Hicks’ ability to be a frontline player next year is uncertain, and the team may want to seek a new starting centerfielder.
Signing Judge and Rizzo to lucrative, multi-year contracts and addressing the other needs will cost the Yanks a large sum of money in salary. The real question is whether Cashman can reduce the team’s budget enough to pursue other players to make the team a true World Series contender in 2022. As we can see from the salary numbers, the GM may not clear enough payroll to continue paying present core players while acquiring new star players. Things are very tight.
If this is the case, then owner Hal Steinbrenner will need to open his wallet and increase the payroll for the team. Whether he’s willing to do this will likely depend on the new CBA. Once again, a daunting and uncertain offseason lies ahead for the Yankees.
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