Are the Yankees really done?

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Updated: January 10, 2017

According to a recent post at MLB Trade Rumors, the New York Yankees are done making moves for the 2017 season. This is a bit surprising considering that the Yankees are only projected for 83 wins right now at FanGraphs Projected Standings and that is very un-Yankee like to accept that sort of designation.

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They have long been linked to Jose Quintana on the trade market, but it appears that his asking price is too high for a trade from the White Sox. Cashman has said they wanted “three elite prospects” which doesn’t make sense for the Yankees after they just received prospects of that caliber last season. Gleyber Torres, Clint Frazier and Justus Sheffield should all be considered untouchable for now.

Of course, it’s been a long time since George Steinbrenner has been in charge and with the current luxury tax rules, it’s easy to understand why a team might choose not to go over the threshold. The current rules have the luxury tax threshold set at $195MM and if you are a three time repeater (which the Yankees are) you would pay a 50% taxation on that money. That means if the Yankees payroll is $195MM, they would pay an addition $97.5MM in penalty fees. That is a lot of money, even for the Yankees.

If the Yankees do finish 2017 under the luxury tax threshold, they will then reset their tax rate so that the next time they go over they won’t pay the 50%, but instead pay 22.5% at that time. That is big money when we are talk about $200MM payrolls.

According to Baseball Reference’s Yankees salary page, New York has a $194.6MM right now and that is with rough arbitration estimates. It seems as if the number on Dellin Betances is a bit low ($3.4MM) when he is one of the best relievers in the game. Even something as small as that $600K raise for Betances would put them over the limit. All this is not including potential minor league call-ups for injuries and other such salaries. Getting under the limit seems unlikely and River Ave Blues is particularly bearish on them doing so.

Of course, Chase Headley and Brett Gardner are available to any who wants them. The market has been quiet on them thus far and even if a trade did happen, the Yankees would surely have to include some money going back. Maybe if they moved both they could get under, but that seems unlikely.

Perhaps a clearer path will present itself when the season starts. Let’s say the Yankees find themselves once again out of the race for the playoffs. Would teams have interest in starter Michael Pineda if he puts together a good first half? Absolutely. He is a free agent after the season so the Yankees could hypothetically bring him back like they did with Aroldis Chapman. That would be $8MM right there. Maybe CC Sabathia puts together a good first half and the Yankees can send him and his $25MM expiring contract somewhere. They’d have to include money, but maybe not all of it. New DH Matt Holliday could even have potential value if he plays more like his career norms than how he did in 2016. The path is there, but the path includes the Yankees being bad and selling.

I can see them finding a way to do this and staying there for 2018 as well because the Yankees seem dead set on what happens after the 2018 season. Namely, when Bryce Harper, Manny Machado, Clayton Kershaw, Zach Britton and so many other big names are set to become free agents. That is when the Yankees will strike and go way over the tax limit. It’s going to be a scary team if everything works out.

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