Over a decade ago the term "parity" sent shivers down the Yankees' spine. The idea that, one day, almost every team would have a legitimate shot at being a contender, and the Yanks wouldn't be able to just dominate every year and book a ticket to the playoffs in April, was a scary one. Fast forward to 2016, and parity is actually the Yankees' friend; it's saved them money and made them one of the biggest World Series threats in baseball.
For those unfamiliar, parity in sports occurs when there's not a huge difference in competitiveness between the best and worst teams in the league, there is no prolonged stretch of dominance/ineptitude for teams, and for the most part, all teams have a legitimate chance of being competitive. The level of parity that exists in each sport is often debated, but generally, baseball is considered to have perhaps the most parity in sports. It's ironic, given that they're the only one of the major four sports without a true salary cap (although the luxury tax surely helps), but it's undeniable that parity exists in baseball.
From 2000-2005, the standard deviation for team wins was 12.5, and 18 different teams made the playoffs. For comparison, from 2010-2015, the standard deviation was 11 (lower standard deviation means less of an average difference between the mean, 81 wins, and the rest of data, indicating greater parity for the league), and 25(!) different teams have made the playoffs. Last season the standard deviation was just 10.3, and FanGraphs projects it to be only 6.6 this season.
In my opinion, in times of increased parity, teams that are just better than average stand to benefit significantly. I understand that parity ensures there shouldn't be top teams, but this isn't baseball communism where every team has exactly the same talent level. Parity still exists if some teams are better than others, there's just not as wide of a gap.
Think of it in this very unscientific, but simple way. When there's less parity, there's going to be a handful of teams that are great. Then there will be your averages teams, and finally some terrible ones, with the rest of the teams filling in along the way. With more parity, almost all teams are going to range from say, below average to above-average, with maybe a couple of outliers that are significantly better/worse than the rest.
In a league full of parity, being an above-average team makes you a legitimate contender. You will be better than the vast majority of the league, who is average or worse, and you just have to contend with the handful of teams that are on your level or slightly above it. In a league where parity doesn't exist, being above-average doesn't get you anywhere because you just can't contend with the teams that are truly great and significantly better than everyone else.
And if the Yankees can be labeled anything this season, it's above-average. For years, Yankee fans thought that increased parity would hurt the organization, and that was a fair concern. You can argue the Yankees were ultimately a victim of parity in 2013, 2014, and even 2015, but I don't see it that way.
The Yankees not having played in an ALDS since 2012 can be attributed to a variety of reasons. You can argue it was injuries, or poor roster construction, or age, but parity isn't one of them. The two biggest ensurers of parity in baseball are the luxury tax and the extra wild card team. However, while the Yankees have shown more frugality than in the past, they didn't have a problem blowing past $189 million for 2014, and still boast a payroll over $200 million. As for the added wildcard team, it's not as if they've been knocked out of the playoffs by one. In fact, it's the only thing that's kept them in the playoffs/playoff hunt these past three seasons.
So parity hasn't been an enemy to the Yankees, and this season, it could be their best friend. While the National League seems to have a clear set of top teams (Cubs, Mets, Nationals, Cardinals, Giants, Dodgers), and then a clear bottom (Braves, Phillies, Reds, Rockies, Padres, Brewers), the American League can make no such claim. According to FanGraphs' projections, the NL has five of baseball's top seven teams, and also the six worst teams in the MLB. In the AL, meanwhile, every single team is projected to win between 78 and 86 games, besides the Red Sox (91).
Due to this, the Yankees are in great shape. Since they have such a balanced roster and should at least be a playoff contender, there was no reason to break the bank this offseason. Their 85 projected wins puts them as the third best team in the AL behind the Red Sox and Astros. The playoffs have essentially become a crapshoot; in a league with such parity, all you need is to be good enough to get a lottery ticket into October and then go from there.
When you look around the rest of the American League, the Yankees stack up well. It's hard to say any team is definitively better. The Red Sox project well, but their starting pitching is still questionable, and they have finished in last place in three out of four seasons. The Blue Jays lost David Price. The Tigers improved with Justin Upton, but are still nothing special. You can never count the Royals out, but they're projected for just 79 wins, and the AL West looks to be a free-for-all.
While the Yankees have plenty of questions of their own, they still have the second-highest scoring offense in baseball from last season, four very promising starters, and a bullpen for the ages. They may not be a great team, but they should be above-average and that alone gives them a legitimate shot to win the pennant.