The Yankees seem to be very cost conscious this year as they have refused to sign expensive free agents to lucrative contracts. In fact, most of the moves they have made have been motivated by the desire to save money. They signed Andrew Miller at $9 million per year over David Robertson at $11.5 million. They traded for a pre-arbitration eligible shortstop in Didi Gregorius instead of signing any of Stephen Drew, Asdrubal Cabrera or Jed Lowrie to more expensive free agent deals. They decided not to pursue Jon Lester or Brandon McCarthy, and seem set on leaving Max Scherzer alone. They ended up bringing Chase Headley back at $13 million a year, but it seems that they have now made up for that money by clearing away some payroll in their latest trade.
To keep up with the pattern, Martin Prado and David Phelps for Nathan Eovaldi and Garrett Jones was not only about finding the pieces they needed, but also about saving money while doing so. The Yankees traded Prado, who was due $11 million in 2015, and David Phelps, who was projected to get $1.3 million in arbitration, to the Marlins for Nathan Eovaldi at a projected $3.1 million and Garrett Jones for $5 million on the year. The Yankees agreed to pay $6 million of the remaining $22 million on Prado's contract over the next two seasons, meaning that they will be giving $3 million to Miami this year. Essentially, the deal gives the Yankees everything they wanted. They traded $9.3 million in order to receive $8.1 million. Take those savings, add them to the $2.5 million they saved by choosing Miller over Robertson, consider the cost of Rob Refsnyder at second base now, and that Gregorius will make peanuts next to someone like Drew, and they might have saved themselves somewhere between $10-15 million dollars by the end of the offseason.
Last year, the payroll was slightly over $197 million in player AAV and right now, before arbitration is decided yet, the Yankees sit at around $193 million for 2015. With Shawn Kelley, Ivan Nova, Michael Pineda, and Nathan Eovaldi all due to receive a combined $11 million in arbitration, and with another $4 million going to pre-arbitration players, that number jumps to $208 million. If you include luxury tax to the 2014 payroll, the final number ended up being over $203 million, so no matter how hard they try, it doesn't seem like the Yankees will be able to drop payroll any lower than that this year without actively trying to tear down the team. After this year the only players who will be coming off the books are Chris Capuano, Chris Young, and Garrett Jones, and while Kelley will be a free agent too, he'll be replaced in arbitration by Gregorius, Justin Wilson, and Adam Warren. They might not be able to tear down payroll, but they can hold the line.
If the Yankees are making their moves based on payroll, they're going to find it very difficult to hit that $189 million mark over the next two years. Not much payroll will be freed up before the 2017 season when Mark Teixeira and Carlos Beltran hit free agency, so expect moves like the Yankees made for Gregorius and Eovaldi to become more of the norm going forward. In a few years, the Yankees could end up relying on more prospects, especially if Greg Bird and Aaron Judge pan out, alleviating their need to add expensive players at the trade deadline or during the winter. They may have saved a marginal amount of money so far this offseason, but with fewer and fewer big contracts to pay off, the Yankees seem to be stabilizing payroll for the future. It'll be time to watch once the big contracts start coming to an end, then they can either start to reinvest or decide that a cheaper team is the way to go.
We talk about Plan 189 like it's this imminent thing, but it's really not. Their biggest mistake was trying to reach it in one offseason. Now, by taking it slow, Plan 189 will envelope a new era in Yankee baseball because it's not a singular event that will come and go. Expect the payroll to level out over the next two seasons and then drop after that, but as long as they continue to make shrewd deals to actually improve the team overall, rather than just protect their pocketbook, the Yankees suddenly crying poor won't be nearly as painful, as frustrating, or as confusing as it has been. It's just a new way of life.