Just recently the Washington Nationals decided to break the bank for Max Scherzer, signing the ace to a record $210 million contract, the largest pitching contract ever (Sure, the Nationals will save money by deferring payments, but it's still a decent chunk of change). The Yankees, to some peoples' surprise, sat on the sidelines. I mean, they didn't completely sit on the sidelines this offseason as they signed Andrew Miller and Chase Headley which amounted to nearly $100 million in total salary, but it was no 2013 or 2008 offseason, that's for sure.
The plan this offseason has not been like previous Yankees' offseasons. It makes sense: with new television revenue giving what used to be smaller market teams significant amounts of revenue, the Yankees certainly aren't getting discounts on the free agent market. And with more teams locking up their youthful talent well into what would have been free agency, free agents aren't as common as they once were. It's no surprise that players like James Shields are free agents at 33, and not at 30. This new landscape, of course, should breed new tactics.
Because the Yankees can't just outspend everyone, they need to make due with the talent they have, or try to create new talent. They've done their best impression of chain-trading a paperclip for a house by acquiring Chase Headley for Rafael De Paula and Yangervis Solarte, and effectively acquiring Nathan Eovaldi, Garrett Jones, and a half-season of Martin Prado for Peter O'Brien. If they want to be successful, they'll need to continue to wheel-and-deal in that fashion.
The above chart is the Yankees' payroll obligations through 2017, courtesy of Cot's Baseball Contracts. The team currently has $208.7 million in payroll going into 2015, which reduces to $180.8 million in 2016 and just $120.6 million in 2017. Of course, the obligations do not include arbitration amounts or even estimates for 2016 and 2017, so it's fair to say that $180.8 million is well below what the actual payroll will be.
Barring some large shedding of salary, it is likely that payroll in 2016 will be very similar to this season, if not even higher considering inflating arbitration costs for the younger players. If the Brian Cashman and company are intent on saving their beans and focusing on building a younger and more robust roster, I doubt they change their mind in the next year.
But, these are the Yankees, of course. Ownership could all of the sudden decide that James Shields is worth the money, but it seems unlikely at this point. After acquiring Didi Gregorius, Nathan Eovaldi, and a legion of young relievers, the Yankees have made it obvious that their old strategy of "buy all of the good players" just doesn't work as it once did. I'm sure they would love to splurge this year or even next, but $210-215 million is indeed the ceiling to the Yankees' budget, then it appears they will have to make it work as is.
This isn't necessarily a bad thing. Brian Cashman's contract is through 2017, which I think is no surprise. If the long-time GM can make the team a competitor through minimal but smart free agent signings and a flurry of trades and minor league transactions (and hopefully some help from the farm), then I would imagine the team looks to keep him around. Cashman has had a pretty good track record with trades and minor league signings, but he'll have to make the scrap heap his lifeblood this season and next. There will be pains along the way, I'm sure, but a younger and more sustainable roster only yields exponential benefits when the team is relatively free(er) of large financial commitments come 2017 and 2018.