Steve Cohen is the ghost of Christmas future for some Yankees fans who fear that the Mets' new owner will begin hoarding the type of pricey players who have long been the exclusive domain of the Steinbrenner family. This is the context in which Brian Cashman has been answering questions lately, and why he has mentioned that his boss typically spends more money than other teams do.
"I'm aware of what my directives are from ownership," he said on a Zoom call with reporters the other day. "I'm not permitted to share that publicly. ... But I am aware of what my directives are, and I feel confident that we will again have the highest payroll regardless, and so our commitment to fielding a tremendous team is still going to be intact."
What Cashman did not say is that, in the end, the Yankees' 2021 payroll might fall under the threshold for baseball's Competitive Balance Tax -- the latest example of how the CBT levels agreed to by the players and owners in 2016 have effectively served as a salary cap in a sport that theoretically operates without a salary cap.
On the night the 2016 deal went down, the negotiated CBT numbers and resulting penalties for teams that spent beyond the threshold shocked many agents and club executives. Some predicted immediately that club spending among the big-money teams would change dramatically. Those assessments turned out to be correct, to the great detriment of players -- veteran free agents, especially.
Baseball's winter market is moving slowly again: Only nine of the first 24 contracts signed went for more than $3.1 million, and all of the premier free agents -- George Springer, Trevor Bauer, J.T. Realmuto and DJ LeMahieu -- remained unsigned. The uncertainty surrounded the dispersal of the coronavirus vaccine and when ballparks will be fully open to fans are factors in the slothful spending.
But the Collective Bargaining Agreement that went into effect in 2017 has clearly been a driving force in how much big-money teams are not spending, as historically big-spending teams work to avoid or minimize the luxury-tax penalties.
According to Cot's Contracts data, the Yankees went over $200 million in payroll as far back as 2005 -- you remember that team, with Randy Johnson, Gary Sheffield and Jason Giambi, among others -- and over 10 straight seasons from 2008 to 2017, the Steinbrenners fostered payrolls of at least $225 million (including the extras tacked on for luxury-tax accounting).
After the current CBA was signed, however, the Yankees pulled their spending under the CBT threshold for 2018, to $193 million, to reset their tax penalties. The Yankees spent big again in 2019 and 2020, relatively speaking, but with the threshold set at $210 million for the upcoming season, the team appears poised for another dip in spending.
But they are hardly alone in this practice. The Red Sox grew their payroll to a league-high $243 million in 2019, the year after winning the World Series, before reeling it back down to $198 million (prorated for 60 games) for 2020, earning a luxury-tax reset. In 2015, the Dodgers spent $297 million, according to Cot's data, and in 2018, they cut that by more than $100 million, to $195 million. Other factors have influenced the team spending, as well. Following the death of Tigers owner Mike Ilitch, who had been one of the biggest spenders in the sport, Detroit slashed its salary allotment from $207 million in 2017 to $135 million in 2018.
At the time the initial CBT levels were negotiated, the industry-wide perception was that the thresholds were lower than they should have been, given the skyrocketing franchise values and revenue streams -- and that the penalties were draconian. With teams facing steep tax rates for going over the threshold repeatedly, the behavior of the teams shifted dramatically, with the number of tax-level violators dropping quickly.
2017: 5
2018: 2
2019: 3
If the Yankees stay below the threshold for 2021 and Cashman is correct in his projection that his team will have the highest payroll, then no teams will cross the line in the season ahead.
To repeat: The Yankees' payroll for 2021 will be almost identical to what it was in 2005.
The soft salary cap has hardened, and all evidence indicates that baseball's middle class of players is absorbing the financial hit from the money not spent.
The most elite players -- the game's 1 percenters, so to speak -- continue to get record-setting deals. Mike Trout got $430 million from the Angels, Mookie Betts $365 million from the Dodgers, Gerrit Cole $324 million from the Yankees, and those players (and others) are positioned to be franchise centerpieces and are effectively company brand names.
Last year, a record $2.4 billion was committed to the free-agent class. Great news for the players, right? Well, not all of them. The number of multiyear deals is in decline. The most multiyear, free-agent contracts in any offseason, according to information dug up by Sarah Langs:
53, in 2005
52, in 1993
48, in 2014
48, in 2007
48, in 1999
If you're wondering about multiyear deals in recent winters, well, the numbers are very different.
2017: 34
2018: 44
2019: 33
2020: 33
Even the number of deals for elite players has been declining markedly. The most contracts of four-plus years signed during an offseason is 15 -- and that happened in 1999, 2005 and 2015. Over the past four winters:
2017: 9
2018: 5
2019: 5
2020: 11
So far this winter, James McCann is the only player to get a contract of at least four years, although the final number might be five or six long-term deals once Bauer, Springer, Realmuto, LeMahieu and Jake Odorizzi work out contracts.
The trend in the free-agent signings is not good for the vast majority of the players, nor is the recent shift in arbitration cases, with more and more teams either non-tendering players with three-plus, four-plus and five-plus years of service or using the threat of a non-tender as leverage to work out an agreement. Additionally, through the front offices' use of specialization, the opportunities for players to compile arbitration-friendly numbers has been diminished. Free agency is losing its value to most players; so is arbitration.
For years, the greatest concern among small-market teams is that the big-market teams would simply steamroll them by building payrolls many times greater than their low-budget opponents. Baseball will probably never have a financial system like the NBA and NFL do, in which all teams work within the same basic spending parameters -- but the fact that the Yankees and Red Sox continue to intermittently retreat means that the Rays have not been completely buried beneath an avalanche of cash in a way that they might without the luxury-tax threshold. In fact, the gap between the haves and have-nots has diminished as the big-market teams bump against -- but don't crash through -- the CBT ceiling.
For example: In 2005, the first year the Yankees spent more than $200 million, the Rays' payroll was about $30 million -- 14% of that of their division rival in New York. In 2019, Tampa Bay's payroll was at $93 million, or about 40% of what the Yankees' spent.
All of this raises some questions for the players as the Major League Baseball Players Association and MLB move closer to the expiration of the current CBA next December.
1. What can and should the players do to loosen the spending of big-market clubs, which has clearly been altered by the terms of the deal negotiated by the union in 2016?
2. Which group of players should be the priority for the union -- the small handful of elite players at the top of the food chain, who continue to break salary records, or the bulk of the brethren, the rank and file? For years, the players' association moved under the premise that the more that the best players were paid at the top of the market, the more they would naturally lift the salaries of their peers. But that has not been the case at all. Cole's deal last winter was for an average of $36 million annually, but the biggest package for any pitcher signed so far this winter is half of what Cole will make in a year -- Mike Minor got $18 million for a two-year deal with the Royals.
There are about 100 unsigned right-handed relievers, and the expectation is that most will sign for something in the range of $1 million to $2 million annually, well below baseball's average salary.
3. What's the best way to bridge the seemingly enormous gap between the union and MLB? Is it to use the threat of a labor stoppage later this year, or is it to aggressively seek the middle ground -- perhaps leveraging the players' willingness (or unwillingness) to participate in baseball's effort to reshape the product, which some in the game think has grown stale with the three-true-outcome competition and specialization?
News from around the majors
It's impossible to overstate how good Juan Soto already is at an absurdly young age, and the numbers he generated when leading off innings in 2020 provide a small window into that excellence: He had 13 hits in 25 at-bats (a .520 average), eight of them extra-base hits, including four homers, plus eight walks and one hit by pitch against one strikeout.
• Yankees manager Aaron Boone greatly enjoyed his first year sharing a dugout with Gerrit Cole, and how much Cole was invested in games on the days he wasn't pitching.
Early in the 60-game season, the Yankees played the Phillies in a doubleheader on Aug. 5. Knowing they had another twin bill scheduled for Aug. 8, Boone rested Aaron Judge and DJ LeMahieu on Aug. 6. During the course of that game, Boone used Judge as a pinch hitter with a runner at second and two outs in the eighth inning, and LeMahieu as a pinch hitter in the ninth.
Cole, locked into the game, asked Boone afterward: "Why'd you use them in that order?"
It wasn't a rhetorical question; Cole wanted to know the thought process behind the decision -- and as it turned out, the question he asked was precisely what Boone had been asking himself after the Yankees' 5-4 loss. It was a moment that revealed to Boone how deeply Cole thinks about the game.
• The perception of other teams is that Sandy Alderson has been scrambling since he took over as the Mets' president, conducting a front-office talent search while also touching base with agents and other teams. The hiring of Jared Porter as general manager helps.
"Prior to Jared coming on board," Alderson wrote in a text, "we were operating with a small group to make contact with agents and clubs. We were able to do some business and maintain contacts. 'Scrambling' would be the wrong term to describe what I was doing, but I did make a lot of calls. So did others in the organization. ... Now we have someone in Jared who can provide additional leadership and direction to all of our work, especially as we look to deepen our roster. We were already involved in that effort, but Jared will be invaluable in this area."
• There has not been a lot of movement so far this winter, but Perry Minasian, the Angels' new general manager, has been aggressive in trying to add pitching, to the degree that one of his peers compared Minasian's early decisions to those of Washington general manager Mike Rizzo.
"He's not messing around," said a rival executive. "He's got a need and knows he can't win unless he deals with it -- and he's dealing with it."
The Angels traded for shortstop Jose Iglesias, swapped with the Reds for closer Raisel Iglesias, and signed reliever Alex Claudio. All the moves are about winning in 2021, because all three players will be eligible for free agency after the upcoming season.