Yankees: Boxed In And Already Over The 2022 Luxury Tax Limit

Yankees 2022 Payroll

The Yankees, even before trade and free-agent additions this winter, already exceed the luxury tax limit. Boxed in again, is there a way out?

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Postscript: 3:10 pm ET 10/29/21

Readers are dismissing the content of this article by stating that the luxury tax threshold has yet to be determined for the 2022 season. While that is true and all calculations are based on the $210 million limits of last year, there is no way the new limit will be high enough to offset the gap between that number versus the needs of the Yankees.  All I can say is do the math yourself.

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As always, the Yankees are smack in the middle of Hot Stove talk revolving around potential trades and free-agent signings for the 2022 season.

But stark reality tells a story that is bound to disappoint Yankees fans because once again, Brian Cashman is boxed in by past decisions and salary commitments that leave the team all but impotent.

This is best seen in a projected analysis of the Yankees payroll for 2022 as conducted by Spotrac.

The proverbial bottom line shows that standing still with no subtractions or additions to the current Yankees roster; the team is liable for nearly $4 million in luxury taxes for the coming season.

Subject to change that goes up or down when the new agreement between owners and players is finalized, Spotrac uses last year’s threshold of $210 million.

From the get-go, the Yankees have a $135 million commitment to players under contract.

The kicker comes when additional salaries are added for players eligible for arbitration. It assumes the Yankees will not buck their trend to award raises to all, even if the player falls short in production for the 2021 season. Spotrac projections include:

  • Aaron Judge               $17 million       +$7 million
  • Joey Gallo                   $9.5 million       +/-0 (salary paid by Rangers)
  • Gary Sanchez              $7.5 million       +$1.2 million
  • Gleyber Torres             $5.75 million     +$1.75 million
  • Gio Urshela                $5.25 million     +$.5 million
  • Luke Voit                     $5.25 million      +$.5 million
  • Jameson Taillon           $4.5 million        +$2.2 million
  • Jordan Montgomery   $4.25 million      +$2.2 million
  • Chad Green                 $4.2 million        +$2.1 million

Yankees: Paring Down Via Trades

While the players above are the high-rollers, nine other arbitration-eligible players account for an additional $13 million in the projected Yankees payroll for 2022.

Thus, the only way for the Yankees to add players via trades and free-agent signings is by subtracting first.

Now, the question – who do the Yankees part with?

Subject to argument, my picks from the list are Luke Voit, Gary Sanchez, Gleyber Torres, and Joey Gallo – who together free up $28 million for the Yankees to spend.

Generously, let’s add another $5 million by assuming Clint Frazier and Domingo German can also be traded (not shown on the above list), and the Yankees now have an “extra” $33 million.

Now, how far can the Yankees go, even after these moves with $33 million?

Yankees: Dream On

In a somewhat surprising development, Anthony Rizzo let it be known he is “eager” to return to the Yankees as a free agent.

Retaining Rizzo, a left-handed bat and sure-in-the-field defender makes perfect sense for the Yankees. Reportedly, however, the 32-year-old slugger will be looking for a nine-figure contract with an average annual value of $30 million.

Uh-oh. There goes the Yankees’ newly created “surplus” in one fell swoop.

A second scenario is more of the same regarding the Yankees’ interest in Corey Seager as a solution to their shortstop problem.

Multiple reports indicate that the Dodgers All-Star shortstop and upcoming free agent Corey Seager is expected to ask for a contract worth over $300 million in the offseason.

Again, the Yankees adding Seager is a plus-plus move. It enables Gleyber Torres to remain at second base (if he is not traded) and DJ LeMahieu to become the regular first-baseman in the lineup.

Alas, signing Seager or any of the other free agent shortstops eats up all of the Yankee’s provisional $34 million, as well as eliminating the addition of Rizzo – or vise-versa depending on which player you like best.

Adding further to the Yankee’s dilemma is that we haven’t even addressed the team’s need for a number two behind Gerrit Cole, requiring the addition of Robbie Ray (let’s say), who will also command $30 million per as a free agent.

Hal Steinbrenner: The Elephant In The Room

Hal Steinbrenner, the Yankees’ managing partner, has yet to be heard from. Typically, Steinbrenner hands Brian Cashman a number not to be exceeded for the coming year’s team payroll, upon which he crawls into his lair, leaving all personnel decisions to Cashman.

As demonstrated by the painted picture thus far, unless Steinbrenner reverses himself by allowing Cashman to exceed the luxury tax threshold, Cashman is boxed in regarding ways to improve the Yankees for 2022.

Yankees Principal Owner Hal Steinbrenner
Yankees Principal Owner Hal Steinbrenner

Moreover, we’re talking about going way over the limit, and not by merely a few million dollars if the Yankees add $90 million to their payroll by signing (for example) Rizzo, Seager, and Ray.

Risking the enragement of Yankees fans who know the franchise is a money-making machine, Steinbrenner will not authorize Cashman to make the moves necessary for the Yankees to compete in 2022 and even beyond.

From where Steinbrenner sits, winning doesn’t matter because he is assured of three million in attendance, plus colossal revenue generated by TV contracts and the sale of Yankees’ team paraphernalia that guarantee his shareholder’s healthy dividend checks.

Comparisons to the free-spending ways of his father don’t matter either, as Hal has set his fiscal conservative ways to draw a definitive line between himself and his dad.

It is a phenomenon we see so often as the heir to a fortune that grapples with the desire and need for Hal Steinbrenner – to be “his own man.”

Don’t Shoot The Messenger, But…

Unless there’s a way I don’t see, the Yankees offseason is over before it even gets off the ground.

The math to add players like the ones discussed beforehand isn’t there, and this will force Brian Cashman to repeat what he did last year when he gave Aaron Boone (essentially) the same team to work with as the one he had in 2020.

Cashman can, and he probably will try to squeeze as much as he can by making a series of trades, but the return on those players is not likely to make a difference in the Yankees’ standing against the Rays, Red Sox, and Blue Jays in 2022.

Winners of 92 games in 2021 (not too shabby), the Yankees will finish at or near the exact total again, but it will all be for naught, and another season will pass by without that elusive 28th World Title in hand.

I wish I could say differently, but this is the state of the New York Yankees today…

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Author: stevecontursi

I am an amateur writer with a passion for baseball and all things Yankees and Mets.