Hal Steinbrenner suggests that the Yankees will try to cut salary to avoid the luxury tax
Wallace Matthews of ESPN New York has a story about Hal Steinbrenner up today. It’s interesting in many respects, but one thing Yankees fans immediately noticed in the first hour after the thing was published -- indeed, the one thing they were tweeting about pretty madly -- were Steinbrenner’s comments about the team’s payroll.
The Yankees have long been big spenders. That spending has ended up costing them a lot more than player payroll in recent years, however. Under the Collective Bargaining Agreement teams whose payrolls reach a certain level for a certain amount of time are charged a luxury tax. That threshold has been $189 million and the Yankees are one of the few teams who have been forced to pay the punitive tax for exceeding it for a sustained period.
In 2012-13 the Yankees famously attempted to get below that $189 million level, much to the chagrin of their fans. The strategy caused them to pass on a lot of free agents that Brian Cashman likely would’ve pursued in the past. Pitching was a particular sore spot among some, with the Yankees laying off the Zack Greinke and Anibal Sanchez markets during that time. Letting Russell Martin walk and going with budget catching was something that displeased many. They were not a part of the major international bidding of the period either, passing on Yoenis Cespedes, Yu Darvish and Yaisel Puig. Finally, it’s hard to tell how many trades which would’ve involved the Yankees taking on salary weren’t explored but it’s impossible to ignore that such trades had been part of the Yankees’ team-building strategy in the past.
But beyond any actual moves which the Yankees avoided -- and it’s worth noting that they probably avoided signing BAD contracts too -- the strategy, termed “Plan 189" by some, was sort of galling in a cosmic sense. “We’re the friggin’ Yankees!” their fans exclaimed. “We’re SUPPOSED to outspend everyone! What fun is being U.S. Steel -- what fun is being The Evil Empire -- if we’re afraid of paying a luxury tax!”
OK, maybe that’s an exaggeration, but the fact is that the Yankees are incredibly profitable and, unlike most teams, can quite easily afford to chase wins well before they calculate dollars spent per win. Their history of doing so is something which made it nice to be a Yankees fan. There was never a need to temper offseason hot stove chatter with “well, if we can afford it.” It was all about wins.
The Yankees abandoned Plan 189 when Masahiro Tanaka became available in the 2013-14 offseason. They were down to about $190 million or so and maybe poised to get under the tax threshold, but Steinbrenner and the Brain Trust decided that Tanaka was too good to pass up. Wins matter to them too, after all. They signed Tanaka and resumed being the Yankees we all know and love and, in some cases, loathe.
But now, in the Matthews interview, Steinbrenner says that Plan 189 is back on the table. He says that “when baseball’s new collective bargaining agreement comes out, he will try once again to pare the Yankees’ payroll below the threshold to avoid paying the luxury tax, as he tried to do in 2013.”
To be fair, Steinbrenner quickly noted that a LOT of payroll is going to fall off naturally anyway. Indeed, a lot of it is the payroll which made cutting down to $189 million a couple of years ago impossible. In the near future they will shed around $100 million by letting Alex Rodriguez, Mark Teixeira, Carlos Beltran and CC Sabathia walk away. Those will be good baseball decisions too, of course, that happen to dramatically improve the payroll situation. Steinbrenner likewise says that a good deal of the money freed up by those guys leaving will be plowed back into payroll, though not so much that the luxury tax will be triggered. Assuming it even still exists under the new CBA which will go online at the end of the year.
Still, this kind of talk is uncomfortable for Yankees fans. They’re not accustomed to hearing team management talk about there being objectives in player acquisition which are not “acquire the best player, full stop.” It likewise comes at a time when team management is being pretty tone deaf with respect to the way it is so conspicuously pursing every last dollar and favoring its wealthiest fans. Maybe that stuff plays better if the Yankees are seen to be using their ridiculous wealth to acquire the best players, but if they’re seen to be pinching pennies on the field while shaking fans by their ankles for loose change off of it there will be some serious backlash from the fan base.
We’ll see how it all plays out, of course. But for now this is the kind of talk which will put Brian Cashman and the Steinbrenners under a new and more intense sort of scrutiny at trade deadlines in hot stove seasons to come.