Is the Yankees’ trade deadline business finished now that they’ve added Joey Gallo?

The Yankees consummated the first true blockbuster of this year’s trade deadline period when they reportedly acquired Joey Gallo and Joely Rodríguez from the Rangers in exchange for a quartet of minor league prospects. The deal has yet to be confirmed by the organization, though indications suggest its finalization is imminent.

By getting Gallo, New York fills several needs. Their outfield has been a cobbled-together mess, and the former Ranger adds a Gold Glove presence to provide some stability. He also brings them a top-five raw power left-handed bat as well as a strong on-base presence — he leads MLB with 74 walks coming into Wednesday night. That said, there are plenty of other areas on the roster that need to be addressed, and hopefully Gallo is only the first domino to fall.

So how does Gallo’s acquisition affect the Yankees’ ability to do additional business before the trade deadline? That depends wholly on their financial approach to the season. Despite not explicitly stating it, the Yankees have indicated with their behavior that the number one priority for this season is to avoid exceeding the first Collective Balance Tax (CBT) threshold.

They traded Adam Ottavino to the Red Sox for the right not to pay him. They structured the deals handed to Brett Gardner, Darren O’Day, and Justin Wilson to defray the CBT hit across two seasons. They traded Luis Cessa and Wilson to the Reds to free up marginal payroll space (as well as two 40-man spots).

On the other hand, we have this assertion from the man at the very top:

So how are we to square these two conflicting reports? Based on the body of evidence before us, it’s easy to be skeptical of that lone sound bite from the owner. Therefore, let’s look at the effects of this trade should the financial constraints remain in place.

Gallo is earning $6.2 million in this, his second year of arbitration. According to FanGraphs’ RosterResource, the Rangers have paid just under $4 million of that. Rodríguez is in the final year of a two-year, $5.5 million deal, with the Rangers having paid almost $1.6 million of the $2.75 million owed this year. By RosterResource’s calculations, that brings the Yankees CBT number to roughly $209.4 million, leaving them $600,000 to spend before breaching the first CBT threshold of $210 million.

We’ve talked about what Gallo brings from a production standpoint as well as how he helps the team avoid entering CBT payor status. However, I’d argue that the biggest win for the Yankees is the fact that Gallo is not a rental; he remains under team control through the 2022 season — his final year of arbitration. This means he can contribute to the Yankees’ chase for a playoff berth this season and help lead a title charge next.

Returning to the $600,000 in “cap space,” that’s not a lot to work with if the Yankees want to make more additions. Per Ken Rosenthal of The Athletic, New York approached the deadline hoping to reinforce the bullpen, address shortstop, and add a lefty bat. Gallo answers that final need in spades, but the first two areas remain.

The bullpen has blown several multi-inning leads in recent weeks, and in general has looked a lot shakier than it did the first two months of the season. And while Gleyber Torres has performed much better of late, there are upgrades rumored to be available on the market. Trevor Story and Trea Turner are the two names being thrown around the most. Unfortunately, Turner is prohibitively expensive from a prospect cost standpoint, while Story’s remaining salary of just over $5 million would bring the Yankees beyond the threshold — barring the Rockies eating a majority of the money left, or the Yankees doing another Cessa/Wilson-esque move to unload contracts.

Of course, the simple answer is for the Yankees to disregard the luxury tax and wield the financial power that no other team in the league has access to. Their moves in 2021 send such conflicting signals as to whether the prevailing priority of this season is to make a playoff push (as the Gallo acquisition would suggest), or to reset their CBT overage rate. The next two days will answer that question, but for now, let’s celebrate the fact that Joey Gallo is a New York Yankee.

Update (10:10 am EST)

This news will almost certainly aid the Yankees in their goals of staying below the CBT threshold while also pursuing another name on the market. Per Mark Feinsand of MLB.com, the Rangers are covering “most of” the $2.2 million owed to Gallo and $900K of the $1.05 million owed to Rodríguez. So that should help New York pursue another notable name while also maintaining their luxury tax avoidance quest.