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Don’t Panic, the Yankees Are Already Back

They may have missed the playoffs, but the richest sports franchise in America won’t be down for long.


Illustration by André Carrilho  

The New York Yankees’ 2013 season ended Sunday, and there aren’t many fans who are going to miss it. This was the year when it seemed like everything died.

Everything you thought you knew about this team—everything you have come to expect—went away this year. Andy Pettitte retired. Mariano Rivera retired too, played off by Metallica, a band whose members are now eligible for the AARP. CC Sabathia had the worst year of his career, and some in the organization are worried that years of overwork have left him permanently broken. Perhaps worst of all, at least to the fan base: Derek Jeter played only seventeen games, got twelve hits, and looked frighteningly, depressingly ancient; at the September press conference where he announced he wouldn’t play again this season, he said, “There’s no doubt in my mind I’ll be back to where I was.” His suddenly cragged face betrayed him; he didn’t believe that, and neither did anyone watching. He may return for one more season to say good-bye, but the ­Yankees as you know them are gone.

It’s not just the exit of the Core Four (Jeter, Rivera, Pettitte, and Jorge Posada, who retired after the 2011 season) that has fans despondent. It’s the fear that the Yankees are somehow over, that the franchise’s exceptionalism—the notion that we are the Yankees, so of course we win all the time—is something of the past, that the Yankees will now be­come Just Another Team. The major concern is the fact that the Yankees—the Yankees, for cripes sake!—have decided to stop spending money, in order to stay under the $189 million luxury-tax cap for next season. (The Yankees, worrying about the luxury tax?) Last year, they said good-bye to free agents Nick Swisher and Russell Martin, both of whom were in playoff races on teams other than the Yankees. This off-season, Curtis Granderson and Hiroki Kuroda might leave, and they’re not even the most painful losses: Robinson Cano, for whom you can make a legitimate MVP case this season, is almost certainly getting out of town too, likely for a record-breaking contract. Think about that: a superstar the Yankees desperately need leaving the team because another team is willing to pay him double what the Yankees will, or can.

And if the Yankees aren’t paying top dollar for players—if players are leaving the Yankees over financial concerns—are these really the Yankees anymore? The Yankees have the air of a crumbled empire, a bubble burst. The fans scream: George Steinbrenner would have never stood for this.

Then again, George Steinbrenner’s meddling screwed up the Yankees for nearly two decades. There’s a plan here. It’s not a perfect one. But I bet it works.

There has been some confusion about exactly why the Yankees are trying to get under $189 million next year, though the logic has been clear for quite a while. Major League Baseball’s luxury-tax limit will be $189 million in 2014. If a team’s payroll exceeds that, it must pay a minimum 17.5 percent tax. Every consecutive season in which a team exceeds the limit, the tax rises. The Yankees have exceeded it eleven years running, and would be set to pay 50 percent of the overage to the league if they exceed the limit again next year. But get under it just once—in 2014—and everything starts over. Which means that shaving $20 million off the payroll next year could mean $60 million or so more to spend in three years, and potentially more after that. The Yankees can spend more than anyone in baseball right now if they want to. This strategy ensures that in five years, they will be able to spend a lot more. This is not the Yankees being cheap. This is the team clearing its decks so it can spend in the future.

But a couple of strange things happened along the way to the payroll ­haven down the road, neither of which the Yankees could have anticipated when they put the plan together but both of which have worked out overwhelmingly to their benefit.

The first: The team was surprisingly good this season. The Yankees ended up winning more than half their games, which, while their worst record since 1992, is still far better than expected. They did this by finding, almost by happenstance, loopholes in the luxury tax, a rich man holding on to his wealth by knowing all the tricks. Vernon Wells and Alfonso Soriano, two of the most expensive, overpaid players in baseball, were salary dumps by their teams, with the Yankees one of the few teams willing to take them on. This is complicated, having little to do with baseball, but the way the Yankees made use of it shows their salary-cap savvy. The Angels and the Cubs paid most of Wells’s and Soriano’s salaries, which meant that the Yankees didn’t have to add much to their luxury-tax bill. (In Wells’s case, they might actually earn a credit.) This shady, but totally legal, accounting provides an opportunity; as long as the ­Yankees are willing to pay some of a contract—even a contract that goes past the 2014 window—they can get players other teams can’t. The ­Yankees have huge financial advantages even when they’re cutting payroll. To ­paraphrase Woody Allen’s Blue Jasmine: The rich even go broke different from the rest of us.


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