First, a disclaimer--if the New York Yankees wanted to spend more money, they could. With revenues in excess of $500 million, the payroll could certainly be higher than it is now, no matter how much Hal Steinbrenner contorts himself to assert otherwise. While significant luxury tax and non-player payroll obligations prevent the Yankees from approaching that $500 million figure, it is safe to say that the current salary commitment of around $215 million is below what the organization is truly capable of.
That being said, there is another reason that New York has been so hesitant to make a big splash in free agency in order to upgrade the roster. Management's frugality certainly has played a role, maybe even the biggest role, in refusing to add payroll, but the balance of the Yankees' roster has also been a factor. It is possible that no other team in the majors has assembled a collection of talent as solid, if unspectacular, as the Yankees have. Given the team's lack of clear holes, adding talent on the free agent market this winter would have been no sure thing. Signing a big name such as Chris Davis, Yoenis Cespedes, or Johnny Cueto would have been great, but when the players they would have replaced are already serviceable, would the investment have been worth it?
The Yankees are owners of the perhaps most balanced roster in the American League. According to Fangraphs depth chart projections, right field is the only of the eight positions in the field at which the Yankees are expected to receive below average production (in this case, below average can be defined as fewer than 2.0 WAR). Carlos Beltran and company project to only produce about one win in 2016, but the Yankees can expect average or better contributions at every other position. Across the field, the Yankees look competent, ranging from second base (projected 2.0 WAR), to catcher (projected 3.7 WAR). The pitching staff is similarly capable, as the starters are projected to fall anywhere between CC Sabathia (at 1.7 WAR) and Masahiro Tanaka (at 4.1 WAR). The Yankees roster quite clearly seems to be nothing if not solid, even though its apparent best players, in Brian McCann and Tanaka, appear to fall short of being stars.
Most of the AL is unable to boast this kind of balance. The only other team with just one position in the field projected as below average is the rival Boston Red Sox. Boston appears to have a weakness in left field where Rusney Castillo headlines a group projected for 1.4 WAR, but other than that, they too are relatively devoid of holes. Every other notable contender sports a roster with considerably more weaknesses. The Blue Jays have issues at first and second base. The Astros are counting on an unproven Jon Singleton at first base, and a declining Colby Rasmus in left field. With Michael Brantley injured, the Indians have an entire outfield full of problems. The list goes on. Boston and New York stand as the only teams who enter the season with seemingly only one position of concern; not coincidentally, Fangraphs currently has the Yankees and Red Sox projected as the top two teams in the American League.
Given how solid a roster the Yankees have built, would a big free agent signing have been worth it? Right field certainly could be a problem for New York next year. Despite Beltran's offensive resurgence in 2015, he is still going to be 39 years old, and cannot be counted on for a repeat performance. However, the Yankees still have $15 million tied up in him, and have the highly touted Aaron Judge eyeing the majors. It is unlikely GM Brian Cashman deemed it prudent to invest heavily in a position with both a highly paid veteran and an excellent prospect already in place (to say nothing of quality backup Aaron Hicks).
It is unclear if the value brought by a pricey free agent would be worth the price. Since the Yankees have decent players everywhere, the only place to find clear upgrades would have been at the top of the market. That means names like David Price, Zack Greinke, or Jason Heyward. Each member of that trio projects to be about a 5-win player in 2016, but each required the kind of massive, long-term commitment that the Yankees are now loath to give out. If New York refuses to hand out seven-plus year contracts in order to shop at the top of the free agent market, then the names in lower tiers simply won't cut it. Is it worth it to commit $130 million to Justin Upton to be, say, a one-win upgrade over Brett Gardner? Does investing nine figures in an over thirty pitcher like Jordan Zimmermann or Cueto make sense when the pitchers they are replacing are already competent? From an economic perspective, there just isn't much marginal value to the Yankees. Signing these free agents would have required commitments in excess of $20 million a year, despite the fact that their production would not be valued as $20 million better than the serviceable players they would have replaced.
One can certainly argue that part of playing in New York is that you can make the huge salary commitments. You can overpay for an asset that isn't really much of an upgrade. I cannot dissuade anyone from making those assertions. If the Yankees wanted to sign a Cespedes, or a Mike Leake, or whomever, despite already having quality players, they could. Heck, they could probably sign Price or Greinke to a contract that could potentially look like an albatross in a few years and still have plenty of money leftover. However, as already has been discussed here, the Yankees' patience in recent years has set up a promising future. The team is already very solid, several mega contracts will soon come off the books, and with a rejuvenated farm system that looks ready to bear fruit, perhaps even some young stars will soon spruce up the solid roster. It is frustrating to see management refuse to invest anything in the free agent market, but given the Yankees' balanced roster construction, their financial thriftiness may not have been such a bad idea after all.