The new Collective Bargaining Agreement changed the game for large payroll clubs, raising the luxury tax rate and offering partial revenue sharing refunds for remaining under the luxury tax threshold. Yankees GM Brian Cashman and owner Hal Steinbrenner have both come out and said the club’s goal is to get under the $189MM luxury tax threshold by 2014, just two years from now.
At the moment, the Yankees have just three players under contract for 2014: Alex Rodriguez, Mark Teixeira, and CC Sabathia. Those three combine for $75.125MM in salary, giving the team roughly $113MM for the remaining 37 spots on its 40-man roster plus benefits and bonuses. Both Robinson Cano and Curtis Granderson are scheduled to become free agents after 2013, and both could command $20MM+ annual salaries if they maintain last year’s production. Michael Pineda and Ivan Nova will both be in their first arbitration years, potentially giving the club two cost effective rotation options behind Sabathia.
Building a World Series contender for $189MM or less is obviously doable, but getting from where the Yankees are now to where they want to be in 2014 may prove difficult. Cashman and everyone else in the front office will have to come up with creative solutions at certain positions and also make some very difficult decisions about whether to retain productive players or allow them to leave as a free agents.