True cost of Giants' Blake Snell deal explains why Yankees refused to engage

Would he really have been worth the $65 million?

2024 BBWAA Dinner
2024 BBWAA Dinner / Sarah Stier/GettyImages
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With late breaking news that the San Francisco Giants finally consummated a deal with 2023 NL Cy Young award winner Blake Snell, it's worth looking at what a similar deal would have cost the Yankees.

Per MLB insider Jon Heyman, and confirmed by Susan Slusser of the San Francisco Chronicle, the Giants are in agreement with Snell, pending a physical on Tuesday, on a two-year, $62 million contract that allows him to opt out after the upcoming season.

He’ll reportedly receive a $15 million salary in 2024, with a $17 million signing bonus that’s deferred until January 2026. Snell gets the bonus even if he opts out after 2024, so it essentially amounts to a $30 million player option for the 2025 season.

Per Roster Resource, the $31 million AAV deal pushes San Francisco above the luxury tax threshold of $237 million this year to just under the second tier of $257 million. Given they didn’t pay the tax last season, that would trigger a 20% penalty on any overages between $237~257 million. 20% on the $19.5 million they’re now above the threshold after signing Snell is an additional $3.9 million tax.

In addition, because Snell had rejected a qualifying offer (QO) from the Padres, the Giants will lose their third-round pick and $500K from their international bonus pool for Snell, after forfeiting their second-round pick and $500K of international bonus pool space to already add 3B Matt Chapman, who’d rejected a QO from the Blue Jays.

Not only did the Astros apparently balk last weekend, but USA Today’s Bob Nightengale says the Yankees took their six-year, $150 million guaranteed offer off the table last month and declined to reengage with Snell’s agent Scott Boras over the weekend.

What the Giants’ deal with Blake Snell would have actually cost the Yankees

Jon Heyman, who broke the Snell news, writes that the Yankees and Boras, “conducted renewed talks over the past few days, but they never got close to a deal after trying several avenues to try to blunt the 110 percent, fourth-tier tax the Yankees are confronting as a team above the final $297 million threshold.”

So instead of pitching for the Yankees at a $25 million AAV over six years, or the $24.6 million AAV that Aaron Nola will get from the Phillies over the next seven seasons, Snell gets a higher value, short-term ‘show me’ deal with the Giants, with an option to test free agency again after the season.

Sure, he’s won Cy Young awards in both the American and National Leagues, but he’s only averaged under 5.1 innings per start over his career, which means he taxes his team’s bullpen. Compare that to Gerrit Cole, who averages almost 6.1 innings per start, and that’s — on average — around 32 less bullpen innings required per year when he starts versus Snell.

And for a similar two-year, $31 million AAV deal, New York would have triggered an additional 110% luxury tax rate as a 3rd-time tax payor in the top bracket above $297 million this year. Adding that $31 million AAV to their current projected 2024 luxury tax payroll of $308 million would have triggered an additional $34 million in luxury tax, making the effective cost $65 million for one season of Snell.

And as a team that exceeded the competitive balance tax (CBT) threshold in the prior season, by signing a player who rejected a QO, the Yankees would have also lost their second- and fifth-highest selections in the amateur draft this summer, as well as $1 million from their international bonus pool for the signing period this year.

Given how successful the Yankees have been recently at player development, with a top ten farm system and six top 100 prospects based on both the ESPN (No. 6) and Baseball America (No. 9) rankings, losing those picks and international money aren’t insignificant considerations.

So let’s be thankful that Snell won’t be an Astro or an Oriole this year. With the best case news out of the Cole elbow diagnosis, hopefully he’s back on the mound and dealing again by June, and the Yankees can put the whole Blake Snell saga behind them.