Following a new labor agreement between Major League Baseball and the MLBPA, the New York Yankees now have some flexibility.Staying put until a new agreement between the sport and its player’s association was made was a “wait and see” move for the New York Yankees, and they now see they are open for business.
Ken Rosenthal first reported news of the agreement, which is for five years meaning the streak of phenomenal labor peace will advance to 27 years, as there has not been a lockout since the unfortunate strike back in 1994.
So, in addition to baseball coming, a new luxury tax threshold — the elemental reason why the Yankees stayed pat to kick off the offseason — has been established.
In the first year of the new deal (next season), the threshold will progress from $189 million to $195 million in the first year of the deal, $197 million in year two, $206 million in year three, $209 million in year four and $210 million following the conclusion of the deal, also according to Rosenthal.
As a bonus, teams over the threshold will lose a second and fifth round pick, compared to the first round pick teams that sign a type-A free agent must surrender.
Why is this important? Well, we are all very familiar with principal owner Hal Steinbrenner’s primary mission to get his organization under the $189 million threshold to avoid paying a luxury tax and, as of late, shaving some payroll.
Now, there’s some flexibility with the new agreement that can make the Evil Empire even more sinister than it was back in the late 90’s.
With the most recent trade of Brian McCann, New York has roughly $136 million on the books — before arbitration — with Alex Rodriguez’s $21 million and CC Sabathia’s $25 million coming off the books by 2018.
The New York Yankees may finally get beneath the threshold, and if you’re wondering why that is such an intent, once they get below it, their tax rate will subsequently be reset. Rather than paying 50% for exceeding the threshold, Steinbrenner and co. will only be taxed 20%.
Cashman now has a budget and can go to work this winter, but this new collective bargaining agreement truly means that: the spending spree in 2009? Psh… That was nothing.
Throwing in the youth movement with spending room never seen before will be quite the sight.
It’s hard to envision New York getting below the threshold with biting the bait of Edwin Encarnacion or Aroldis Chapman, so if the Yankees truly take this whole “rebuilding” thing to heart, it would bode well in the long run.
With “Baby Bombers,” Gary Sanchez, Greg Bird, Aaron Judge, Luis Severino, Luis Cessa, Chad Green and forthcoming kids in Justus Sheffield, Clint Frazier, Gleyber Torres and James Kaprielian, there will a total of pre-arbitration players that haven’t been seen in the Bronx for quite some time.
While these kids — who make close to league minimum for the next several years — it provides the organization some time to appraise the talent they can retain, and talent they should separate from.
By the time a solid core is established, the intent of sitting comfortability under the luxury tax threshold will be achieved by the time superstars like Bryce Harper, Manny Machado, Clayton Kershaw, Josh Donaldson and more are projected to hit the open market.
If Cashman doesn’t invest in a single free agent until the 2019 free agent class and simply uses the time to take a serious look at his youth, he’ll have $64 million on the books after A-Rod, Sabathia, Brett Gardner and Chase Headley will come off the payroll in two years.
This is, of course, ahead of any arbitration or anyone else being dealt, signed or released (situations that are obviously going to happen). The bottom line is, highly touted and young talent is on the rise, money is coming off the books and the CBA will give Cashman room to perform moves to essentially insure championship rings.
That’s why I have subjectively been preaching patience, avoid Yankee-like temptations and to not splurge on this free agent class — one that won’t build a championship caliber team.
Patience, for now, is still expected. After all, there has only been speculative talk about what the future could look like. Yankees’ fans should now see that it has become a bonafide reality.