Two Years Without Yankees

The Yankees will still be playing, of course, but it’s beginning to look like they won’t be the 500 pound Gorilla of the Hot Stove League that they have been in the past. According to Joel Sherman of the New York Post, the increased luxury tax rate and the chance to cut revenue sharing payments for teams under the luxury tax cap are enough – combined – to convince the Yankees brass that it is now in their best interests to get under that threshold by the time all this comes on line (2014).

Now, while this is a ‘good thing’ for competitive balance, broadly speaking, the Yankees will still be massively outspending the MLB peloton that the Tigers are in.

$189 million buys a lot of talent, even if that talent is pushing 40. From a profit maximization perspective, it was probably always in the Yankees best interest to try to fall just under the threshold and accept a mere 90% chance of making the playoffs. BUT… in years past we have seen the Yankees splurge time and again, and push that payroll ever higher for two reasons: 1. they can and 2. a 90% chance of making the playoffs isn’t acceptable in the Bronx. New Yorkers, it seems, think of baseball like Detroiters have come to think about hockey.

This year, the Yankees are bucking the trend – which is apparently part of their goal of reducing their 2011 payroll of about $207 million to $189 million in the next two years despite a number of expensive long-term currently on the books. The Yankees aren’t going to be holding any fire sales or dumping anybody for salary reasons alone – they just don’t do that sort of thing – but they don’t seem to have much interest in spending, even to improve a rotation with a lot of question marks.

I’m not going to talk about how this is going to impact the Yankees or their chances or their personnel decisions, because frankly I don’t care all that much. What interests me is that it looks like we’re actually going to get a little window into what the offseason might look like without the Yankees: that means no Yankees to make top free agents offers they can’t refuse and no need for the Yankees competitors to make tit-for-tat personnel moves to try to prevent the Yanks from pulling away. This has been the driving force in free agency for so long, I’m not sure any of us really know what to expect without it.

I don’t think this year’s crop of free agents are going to like the new world order are going to like it much, though. Prince Fielder and Albert Pujols don’t play positions of need for New York, so even without austerity in the Big Apple you might figure the Yanks wouldn’t be showing much interest – and there could be some truth in that. That’s not really how this matching effect has played out, though. Given that the Yankees biggest need appears to be starting pitching, you would expect them to show more than the zero interest they have in C.J. Wilson – and if they signed him, in years past we’d expect the Red Sox (or the Rangers, etc…) to feel the need to make a move to match, and maybe they’d give Albert Pujols the sun, moon and $200 million and move the Greek God of Walks back to third base. This year, the Yanks don’t have the cash for Wilson (and even if they did, the Red Sox might be a bit too close to the luxury tax threshold to make a big splash in return) – so where does he go?

I know the economy isn’t in the greatest shape, but baseball revenues are doing fine and owners still have an overwhelming desire to win even if it costs profits. Nonetheless, we might see top free agents take a discount of as much as 1/3 of what their agents think they’re worth – and what they probably could have gotten in the past. Wilson is one of the less inspiring top starters we’ve had on the market in a while, but Albert Pujols and Prince Fielder are among the top 5 batters in the big leagues and this definitely applies to them too. I suspect we’ll see a lot of guys sticking around kind of late in the offseason, and when they finally sign I think they’ll be settling. The big winners could be teams who decide to spend when nobody else will – maybe the new Miami Marlins (though I’d figure Loria will close his purse once he has one new star to get fans enthusiastic again) and the Washington Nationals – who have been offering guys big contracts year after year and getting shut out. But maybe that’s not the whole story: it could be that with a couple of years of no Yanks in free agent negotiations, salary expectations might really start to fall and fall far enough that mid-market teams can hold onto the guys they want to hold onto. If the new CBA did that… couldn’t be all bad, right?