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The Yankees’ $345 Million Band-Aid

The Yankees keep scooping up the best the free agent market has to offer, but $345 million just doesn't buy what it used to.

Adam Pretty

With the signing of Masahiro Tanaka, the Yankees have now landed four of the top six free agents on the market this winter. Between resigning players like Derek Jeter, Brendan Ryan and Hiroki Kuroda and these additions, New York has spent approximately $345 million dollars this winter. This wild spending spree obviously recalls the 2008-2009 offseason, when they responded to missing the playoffs for the first time since the 1994 strike by buying up the top of that winter's free agent crop.

The 2009 Yankees added Mark Teixeira, CC Sabathia, Nick Swisher and A.J Burnett, then ran away with the AL East on their way to a World Series championship. Though the strategy might be identical, its results probably won't be. Many experts have responded to the Tanaka signing by labeling the Yankees Wild Card contenders. $345 million spent and the Yankees are still not even clear favorites to make the playoffs. That wasn't the case in 2009 and that shows just how far the Yankees have fallen in the last five years.

This offseason, the Yankees didn't buy up the top of the market to return to the type of domination they have grown accustomed to, they did it just to remain relevant. Despite their incredible financial advantages and winning tradition, the Yankees are finding it harder and harder to compete as consistently as they have over the past decade and a half. The strategy that landed them a World Championship in 2009 is outdated and they have yet to adapt to that reality. The result is a $345 million band-aid that will keep them in contention for a few more years while making it still more difficult for them to adapt to the game's new landscape.

The Yankees had been dabbling with the notion of pushing their payroll down below the $189 million luxury tax hold prior to their spending spree this winter. Getting below $189 million was never going to be easy for the Yankees with at least $84 million tied up in for 2014, but it was possible. They had 12 contracts coming off their books this offseason leaving them with $100 million on free agents before crossing that line and Alex Rodriquez's suspension promised another $26 million for the 2014 payroll. Yankee fans were mildly horrified by the idea for the most part, but resetting that luxury tax rate had to be extremely tempting for the Steinbrenner brothers. Unfortunately, Plan-189 would have meant truly rebuilding and everyone knows; the Yankees can never rebuild.

The 2013 team was as close as the Yankees have come to a rebuilding effort since the days before the strike. The team didn't look to trade away talent, but they shunned top free agents like Zack Greinke and Josh Hamilton and focused on adding veterans with upside on short term deals. They added Kevin Youkilis and Travis Hafner, picked up the some of the remains of Vernon Wells albatross contract and re-upped veterans Andy Pettitte and Ichiro, who had been solid for them in 2012. That strategy had its merits, even if worked out horribly in the end. Had Youkilis or Hafner hit on a late career renaissance, they would have produced significant value at a modest cost and possibly even brought in draft picks by warranting a qualifying offer. At the very least, the plan opened the Yankees roster up to a proper gutting at the end of the season.

Though the results of this plan were disastrous, strong pitching kept the Yankees in the playoff hunt for most of the 2013 season and as a result their 85-77 record doesn't reflect just how bad the team really was last year. Their Pythagorean record was just 79-83. The Yankee offense was terrible. They finished 11th in the league in runs scored in 2013 and that undersells just how bad things were. When adjusted to reflect the impact of their pro-hitter park, the Yankees were the second worst offense in the game last year, just behind the Astros. No that isn't a typo, the Yankees offense was worst the Astros last season. Can anyone really blame them for abandoning plan-189 after that?

The problem for the Yankees now is not a lack of talent for 2014. It is a lack of options beyond next season. The rules of the new CBA are perfect for them. They control costs below the major league level by capping draft picks and international amateur spending. They impose relatively modest compensation costs for teams that sign away top free agents and they have discourage everyone but the Dodgers from spending past the luxury cap. But while the rules are their favor, the trends are not. Teams are locking up players long before they reach free agency more than ever before and new TV money has made that much easier. There are serious more competitors in the free agent market than in the past as well. With less talent hitting the open market, teams are seeking enormous prospect returns when shopping established stars. With a farm system that ranks in the bottom half of the game featuring little near-major-league-ready talent combined with a roster full aging, overpaid veterans, the price to stay competitive keeps growing, while the returns keep diminishing.

If everything breaks right in 2014, the Yankees might win the AL East and avoid a one game playoff, but with each coming year, the outlook gets worse for them. Their first draft pick in the talented 2014 draft will be the 56th pick overall and their rivals in Boston will have three picks before that. They will almost certainly need to replace Derek Jeter next year or the year after and their options are thin. Asdrubal Cabrera is the youngest potential top free agent at short at this point and he is 29. Only 31-year-old Hanley Ramirez and 32-year-old J.J. Hardy seem like the only other reasonable alternatives. At second, there are even fewer slimmer options coming to the free agent market in the next few years. Free agency just doesn't offer as many solutions for the Yankees future problems as it did this offseason and that is a key reason they decided to buy now. Alex Rodriguez's contract is an albatross even with their virtually unlimited budget and Mark Teixeira and CC Sabathia are hitting the painful years of their deals as well. If free agency can't mend their roster woes, it is hard to see where the Yankees will turn.

The trade market has becoming more important as the free agent market has shrunk and that is a problem for New York. If a team is shopping a possible replacement for Derek Jeter, they will probably find a better prospect package outside the Yankees organization than with in. just released their top 100 prospects list and the Yankees have two players on that list, catcher Gary Sanchez and outfielder Mason Williams. Both players just cracked Double-A in 2013, with Sanchez seeing 110 plate appearances at that level and Williams seeing 76. There are other talented Yankees farm hands, of course. Players like Tyler Austin and Slade Heathcott were in Baseball America's top 100 prior to the 2013 season and pitcher Manny Banuelos could reestablish his value after missing 2013 with Tommy John surgery, but this isn't a stacked system and it won't offer much help in 2015 unless things break really well for New York.

The Yankees can certainly be in the bidding for a player like Giancarlo Stanton, Nick Franklin or Jordan Zimmermann if they were put on the market, but they can't simply hope to outbid everyone. If the Cubs or Astros or Red Sox want to beat them in a trade bid, they probably will. The Mets could do it too. So could the Dodgers. Or the Pirates. Or the Rockies... the list goes on and on. In the world of free agent bidding only one team can stand with the Yankees, but when it comes to the trade market they are distinctly mid-market bidders right now and even that might be generous.

There is a secondary cost if they have to turn to the trade market as well. By trading away young talent, the Yankees would double-down on the need to buy upgrades and replacements in the future. Young talent is cheap and often superior to what the free agent market offers, but it isn't easy to stock up on it when you have just two picks in the top 100 slots in the draft.

Writing about the Yankees chances in 2014, Rob Neyer had this to say:

It's obviously been a TREMENDOUS winter for the Yankees...[Snip]... But for the Yankees to win (say) 95 games, they still need CC Sabathia to bounce back, and Ivan Nova to pitch well for more than half the season.

Before Tanaka (B.T.) we would have predicted a third-place fight for the Yankees. After Tanaka (A.T.) it's easier to imagine them in a second-place fight. And even if they lose that fight, of course they can still make the playoffs.

Five years back, when the Yankees bought up every top player available, they were a lock to win the division. Now, the same strategy has bought them a fighting chance at a one-game playoff. What will this strategy buy in three years or five years, when they have to return to it once more? New York can still leverage their out-sized revenue to put a consistent powerhouse on the field, but they can't do it in the same way and it seems they have not yet accepted that reality. The Yankees winter spending spree has made them a much better team, but they are still the same organization they have always been and the world around them has changed.