State of the Budget: 1/15/14

Since our last budget update, Alex Rodriguez was officially suspended for the 2014 season, the Yankees added Ellsbury and Beltran to their roster, while they also landed Roberts and Thornton. The majority of the 40 man roster was set, Wells was designated for assignment, and a handful of players filed for arbitration. And yet, the last month has felt fairly quiet up until the last week of Rodriguez news. Now that we know that most of his money is off the books, we can take a more definitive look at the state of the Yankees budget and just how doable that $189 million goal really is. 25-Man Roster

1- C: Brian McCann (5/$85MM) $17.000MM 2- 1B: Mark Teixeira (8/$180MM) $22.500MM 3- 2B: Brian Roberts (1/$2MM) $2.000MM + $2.600MM Bonuses 4- 3B: Kelly Johnson (1/$3MM) $3MM 5- SS: Derek Jeter (1/$12.81MM) $12.810MM + $7.000MM Bonuses 6- LF: Jacoby Ellsbury (8/$169MM) $21.175MM 7- CF: Brett Gardner (Arb 3) $4.000MM 8- RF: Alfonso Soriano (8/$136MM) $17.000MM* 9- DH: Carlos Beltran (3/$45MM) $15.000MM 10- BN: Brendan Ryan (1/$2MM) $2.000MM 11- BN: Eduardo Nunez (Min) $0.511MM 12- BN: Ichiro Suzuki (2/$13MM) $6.500MM 13- BN: Francisco Cervelli (Arb 1) $1.000MM 14- SP1: CC Sabathia (5/$122MM) $24.400MM 15- SP2: Hiroki Kuroda (1/$16MM) $16.00MM + $0.500MM Bonuses 16- SP3: Ivan Nova (Arb 1) $2.800MM 17- SP4: David Phelps (Min) $0.511MM 18- SP5: Michael Pineda (Min) $0.511MM 19- CL: David Robertson (Arb 3) $5.500MM 20- RP: Shawn Kelley (Arb 2) $1.500MM 21- RP: Preston Claiborne (Min) $0.511MM 22- RP: Dellin Betances (Min) $0.511MM 23- RP: Adam Warren (Min) $0.511MM 24- RP: Matt Thornton (2/$7MM) $3.500MM 25- RP: Cesar Cabral (Min) $0.511MM

Guaranteed: $181.262MM Bonuses: $10.100MM

40-Man Roster

26- SP: Manny Banuelos (Min) $0.040MM 27- SP: Nik Turley (Min) $0.040MM 28- SP: Vidal Nuno (Min+) $0.080MM 29- SP: Jose Ramirez (Min) $0.040MM 30- SP: Shane Greene (Min) $0.040MM 31- SP Jose Campos (Min) $0.040MM 32- RP: David Huff (Min+) $0.080MM 33- RP: Bryan Mitchell (Min) $0.040MM 34- C: Austin Romine (Min+) $0.080MM 35- C: Gary Sanchez (Min) $0.040MM 36- C: J.R. Murphy (Min) $0.080MM 37- IF: Dean Anna (Min) $0.040MM 38- OF: Ramon Flores (Min) $0.040MM 39- OF: Zoilo Almonte (Min+) $0.080MM 40- OF: Slade Heathcott (Min) $0.040MM

Total: $0.80MM

Other Commitments

Vernon Wells (7/$126MM) $18.000MM** Alex Rodriguez (10/$275MM) $3.156MM Cash Considerations: *-$13MM (From Cubs for Soriano), **-$18MM (From Angels for Wells) Player Benefits: $12MM Cushion For Non 25-Man Players: $3.5MM


Guaranteed Budget Owed: $185.718MM Potential Bonuses: $10.100MM Budget: $195.818MM

Current Budget Remaining: -$6.818MM

As the Yankees sit at a commitment of $195.818 million, they land nearly $7 million above the $189 million luxury tax threshold. But there is some good news for those pro-budgeters, the numbers include potential bonuses of $10.100 million to Jeter, Roberts, and Kuroda.The chances are extremely low that they'll end up paying all of these incentive bonuses. We've also heard some rumors that the organization is looking to trade Ichiro Suzuki, and some salary relief could come from that.

Even if the organization were to take a major risk and assume the bonuses won't trigger, while dealing Ichiro and his $6.5 million, the team would still remain within $10 million of the $189 million budget. Yet the roster still has so many needs in the rotation and bullpen. While it's possible to find players capable of starting and relieving, with all the money spent this offseason, I don't see how the team could rely on a rotation where 3 of the 5 spots will go to a group of Ivan Nova, David Phelps, Michael Pineda, Vidal Nuno, and Adam Warren. There is a similar sentiment for the high-leverage portion of the bullpen.

The $10 million that the Yankees could free up is hardly enough to sign Masahiro Tanaka. Perhaps Ervin Santana or Ubaldo Jimenez would work at that salary, but a risky long term commitment would be necessary. One option is to trade Gardner and whatever money he'll earn in arbitration for a pitcher. If the Yankees found themselves without Ichiro's money and were able to pull of a Gardner for Homer Bailey trade, the team could find itself with that rotation upgrade and still below $189 million.

In the end, the budget is still possible, but it looks like building a contending team in 2014 around $189 million will be nearly impossible without some miraculous breakout seasons. I guess we could see the Yankees trade some prospects for cheap talent, but they've been extremely reluctant over the last decade. If they do decide to lose the budget, the Yankees would probably spend $40 million more before reaching their 2013 opening day commitment. This kind of money could land them all of Stephen Drew, Masahiro Tanaka, and Grant Balfour.

With just a little more than a week to go in the Tanaka courting, and what will likely be a run on the pitching market thereafter, it looks like we'll finally have some sort of an official answer on the budget constraints in the coming weeks.


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