The Futility Infielder

Remaking the Yankees for 2003, Part I: The Money

Last winter, I wrote a series of articles examining the offseason personnel choices facing the Yankees. The series was fun to write, well-received, and it helped put me on the map in the world of baseball blogs; to this day, I think it stands as some of my best work. So it's with great pleasure that I begin a new set of articles, to unfold over the next few weeks, devoted to the Yanks' offseason plans.

When I began writing last year's series, the Yanks were coming off of a stunning defeat in Game Seven of the World Series. They had been a mere three outs from their fourth consecutive World Championship and fifth in six years when the wheels finally came off in that Arizona mallpark.That lengthy championship run, fuelled by some incredibly timely October play, had painted over many of the cracks in the team's aging foundation; simply put, it's tough to break up a winning team. But when several of those foundation players became free agents and the Yanks had no championship team to preserve, they were presented with a grand opportunity to remake themselves. As I wrote at the time:

This year's team, as close as they came to winning a World Championship, was a rebuilding effort waiting to happen, with Tino Martinez, Paul O'Neill, Scott Brosius, and Chuck Knoblauch all in the final year of their contracts. Those four players, despite their accomplishments, their popularity, and their big-game experience, were drags on the Yankee offense last season. Now that they've scattered to the four winds (O'Neill retired immediately after the World Series, Brosius on Monday [November 26]), the Yanks are left with holes to fill and money to spend.

And the Yankees spent. They bought a new cornerstone for their offense in Jason Giambi, signing him to a 7-year/$120 million contract. They filled in their leftfield gap with Rondell White, signing him for 2 years/$10 million. They rounded out their rotation by signing a fifth starter in Sterling Hitchcock at 2 years/$12 million, and then a SIXTH starter in David Wells for 2 years/$7 mil. They shored up their bullpen by signing setup man Steve Karsay for 4 years/$22.25 mil.

As if to prove that money grew on trees, they rewarded their catcher, Jorge Posada, with a 5-year/$51 million pact. This after having spent the previous winner locking up Derek Jeter (10 years/$189 mil) and Mariano Rivera (4/$39.99 mil), not to mention Andy Pettitte (3/$25.5 mil), Drew Henson (6/$17 mil) and their free-agent marquee signing, Mike Mussina (6/$88.5 mil).

The result was not only the highest payroll in baseball in 2002, but the highest by a wide margin. The Yanks' Opening Day payroll was $125,928,583, $17.5 million more than the second-highest, the Boston Red Sox. They added to that significantly during the season, acquiring Raul Mondesi and Jeff Weaver, and pushed their payroll over $135 million. They even paid out the largest performance bonus for any player, $4 million to David Wells for making 30 starts.

But regardless of the cost, it didn't add up to another Yankee World Championship. And with a new Collective Bargaining Agreement in place -- one specifically aimed at curbing the Yanks' spending via a competitive-balance tax and revenue sharing -- money in the Bronx no longer grows on trees. Brian Cashman has been given explicit orders to trim payroll. In last year's "Remaking the Yankees" series, I avoided addressing the fiscal consequences of the team's needs until the final installment. But given Cashman's current marching orders, it seems only fitting we examine it at the outset this time around.

In 2003, the Yanks (and any other team) will pay a 17.5% tax on all salary above $117 million. It should be noted that for those purposes, "salary" includes the average annual contract value of all players on the 40-man roster, plus $7.7 million in benefit costs. This is an important distinction; it penalizes the Yanks for those hefty long-term contracts, which were structured to permit the team near-term flexibility while taking advantage of the long-term revenue increase that YES will presumably bring. Thus Jason Giambi costs the Yanks $17.1 million for tax purposes, even though his 2003 salary (including signing bonus) is "only" $13 million. Ouch.

By my calculations, based on the information at the MLB Contracts Page, the Yanks have $114.1 million committed to 15 players in 2003. This includes signing bonuses but not performance clauses, and includes Andy Pettitte (who's got an $11.5 million team option which the Yanks must decide whether to exercise by Friday) but not Roger Clemens (whose $10.3 million buyout made him a free agent). They have eight free agents (including Clemens but not Pettitte), and at least five other significant players whose salaries are yet to be determined. Here is a chart (all salary costs in millions of dollars):

              2003       

          Base + Bonus

Jeter     14.0 + 2.0

Giambi     9.0 + 4.0

Mussina   10.0 + 2.0

BWilliams 12.0           

Pettitte  11.5

Rivera     8.5 + 2.0

Mondesi    7.0

Posada     5.0 + 2.0

Hitchcock  6.0 

White      5.0

Weaver     4.1

Karsay     4.0

Wells      3.0

Henson     2.0

AHernandez 1.0



Arias      FA

Clemens    FA

Coomer     FA

Mendoza    FA

Stanton    FA

Vander Wal FA

Ventura    FA

Widger     FA



OHernandez ARB

Spencer    ARB

Wilson     ARB

Soriano    < 3 y.e.

Johnson    < 3 y.e.

Choate     < 3 y.e.

Alfonso Soriano, Nick Johnson, and Randy Choate, because they have less than three years of major league experience, aren't yet eligible for arbitration; the Yanks can renew their contracts unilaterally. Orlando Hernandez, Shane Spencer, and Enrique Wilson, with between three and six years of major league experience, are without contracts but not eligible for free agency unless the Yanks decline to offer them arbitration. Between those six, the Yanks figure to add another $10-12 million to their payroll, assuming they sign Soriano to a longer deal and exercise their rights on El Duque. That puts them at around $125 million without a starting third baseman, two of their three setup men, and any kind of bench, to say nothing of the remainder of the 25- and 40-man rosters or considering the average annual value of these contracts. To keep payroll down, they're going to have to get creative. Already, the Yanks have discussed moving White, Hitchcock, and Mondesi -- $18 million worth of mostly dead wood -- with other teams. They've made noises about trading Pettitte and even Posada, and letting mainstays such as Clemens, Stanton, and Mendoza walk. Clearly, this is not business as usual in the Bronx.

I'll begin examining the Yankees position by position needs and options in the next installment, hopefully this weekend. Starting it off? Starting pitching, of course.