Don’t Panic, the Yankees Are Already Back

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.

The second: Alex Rodriguez made Bud Selig very angry. It’s possible that within a week of his appeal hearing, an arbitrator will come up with a ruling on MLB’s suspension of A-Rod. Now, the Yankees aren’t going to get what they ­really want: A-Rod kicked out of baseball for good, with his salary wiped off the books forever. (The Yankees’ aggressive anti-A-Rod PR campaign this summer, which at one point included general manager Brian Cashman saying “Alex should just shut the fuck up,” because A-Rod had excitedly tweeted he would be available to return from injury soon, was one of the moral low points of the franchise. That’s acting like Steinbrenner.) But they are gonna get some relief next year. Even if A-Rod receives something less than a full-year suspension, the Yankees will get back some of their $26 million committed to A-Rod next year, which makes it that much easier to stay under the $189 million. The Yankees couldn’t have anticipated they’d receive any break on the A-Rod contract: Selig is handing them a big, big favor.

The interesting thing is that the Yankees probably don’t have to sign another A-Rod to replace him; playoff teams aren’t built with high-priced long-term contracts anymore. (FanGraphs listed the five worst contracts in baseball this year, and they were all hitters signed to big contracts through their thirties or longer, just like Cano is about to be.) For a model, look at those hated Boston Red Sox, your 2013 AL East champions. The Sox shipped out their overpriced, cripplingly extended contracts and signed a bunch of mid-tier, short-term, inexpensive veterans like Stephen Drew, Mike Napoli, and super-closer Koji Uehara, among others. These vets, now basically living contract to contract (and thus constantly in need of proving themselves, as opposed to long-term contracts like the one Cano’s about to get), almost all had career years, leading to Boston’s breakthrough. This is the new model: You can go up on the amount you pay a player, as long as you don’t go long on the years.

Being in this position allows the Yankees, improbably, to reload on the fly. They have franchise-building to do to return to the machine they’ve been over the past two decades, particularly in the farm system, which regressed this year with the underperformance of some key prospects. But they now have the money and the time to do it. And once they clear the luxury-tax threshold, they’ll be able to spend even more in the coming years … and could even get themselves in a position to sign some huge long-term contracts that won’t blow up in their face: The Nationals’ Bryce Harper and the Angels’ Mike Trout, two of the best young ballplayers in baseball history, are scheduled to hit free agency after the Yankees’ salary-cap tax resets. What a coincidence! That’s the thing about the Yankees: They can retool their roster with these short-term-­contract veterans and still have the money, later, to pay big long-term contracts that are worth it. And when Trout and Harper hit the market, both will be in their mid-twenties, far younger (and thus less risky) than players like Cano. Those are the type of contracts that don’t wreck your franchise. The Yankees can have everything they want now.

This season felt like an ending, and in many ways it was. But do not be confused: The Yankees are still the Yankees, and will always be the Yankees. This is a team that’s going to win, and spend, and win, and spend some more. When other teams decide to cut back, to let go of the past and try a new plan going forward, it can take as long as a decade to pull together: It’s an organizational implosion. The Yankees don’t have to do this; their reloading period is only a year or two, and they even contend in those years. They’re going to be fine. They’re going to be better than fine: They’re going to be the Yankees.

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Don’t Panic, the Yankees Are Already Back