Where does the Yankees’ payroll stand today?

The signs of the season are everywhere: houses are decorated with bright lights, carols play in every store, and malls and grocery stores are filled with jolly men dressed in red either waiting to hear your child’s wish list or to ask for donations, depending on where you are. That can, of course, mean only one thing: the Winter Meetings are upon us! And as the hot stove heats up for the first time since 2016, and amidst news that ownership has given Brian Cashman the go-ahead to offer a record deal to Gerrit Cole (and we don’t mean the music kind), it’s time to see where the Yankees’ payroll stands today.

The House: Players Under Contract

At the moment, the Yankees only have nine players under contract for the 2020 season: Giancarlo Stanton, Luis Severino, Aroldis Chapman, J.A. Happ, Adam Ottavino, Zack Britton, DJ LeMahieu, Aaron Hicks, and Masahiro Tanaka. These players alone combine for $137,985,000 worth of contracts. That does not mean that they are not worth the value, however: Steamer projects them to combine for a sizable 18.4 WAR next season.

The Blow-Up Lawn Decor: Arbitration Estimates

Another nine players, including some of the team’s biggest stars, are eligible for arbitration this winter. MLB Trade Rumors projects that the Yankees will spend roughly $34.6M on these players, with James Paxton expected to receive $12.9M in his final year of arbitration and Aaron Judge and Gary Sanchez to receive $6.4M and $5.6M in their first years, respectively. Joining these three will be relievers Tommy Kahnle ($3M), Chad Green ($1.4M), Luis Cessa ($1.1M), and Jonathan Holder ($800k), starter Jordan Montgomery ($1.2M), and third baseman Gio Urshela ($2.2M).

Between the arbitration estimates and established contracts, the Yankees currently have about $172.6M in salaries dedicated towards players expected to contribute at the major league level in 2020.

Lights and Garland: Pre-Arbitration Players

In addition to the 17 players already accounted for, the Yankees have 23 pre-arbitration players on the 40-man roster, plus Domingo German. These guys include major leaguers who have less than three years service time (and thus do not qualify for arbitration) as well as prospects. In both cases, these players’ salaries will be minuscule, barely above league average (for example, Aaron Judge only received $684,300 last season, the highest pre-arbitration salary on the team).

Currently, this group includes a wide range of players, such as Gleyber Torres, Miguel Andujar, Mike Tauchman, Clint Frazier, and Luke Voit, as well as top prospect Deivi Garcia. While the exact contract details for each player have yet to be announced, taking the 2019 average of $600k, we can estimate a combined salary hit of about $13.8M, bringing the total estimated payroll for the Yankees active players to about $186.4M.

Why wasn’t this thrown out last year?: Retained Salaries

For better or worse, that does not fill out the Yankees current payroll. Former Yankee Jacoby Ellsbury will receive $26,142,857 from the team this year (his salary, plus a $5M buyout for the 2021 team option). Or, well, perhaps they won’t. At this point in time, though, Ellsbury’s salary is fully guaranteed and thus on the books, and so is included here.

That brings the Yankees’ payroll up to $212.5M, or about $4M above the lowest luxury tax threshold of $208M; as the Yankees will be over this limit for the second consecutive year, it means that the Yankees will be paying a 30% tax on that $4M. The Yankees currently are about $16M under the 12% surtax level, which kicks in at $228, and roughly $36M below the highest tax level, which includes not only an additional 42.5% tax as well as a ten-spot penalty in the first round of the 2020 draft.

All this combines to say that the Yankees have room to spend big in free agency before hitting the highest luxury tax level, although two moves of any decent size likely see the threshold passed by. Even then, the penalties on any overages would be relatively small, and well worth paying for top talent.