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New York Yankees' revenue keeps rising as the payroll keeps dropping - What gives?

Anthony Koon
ANALYST
Feature
183   //    09 Jan 2019, 12:14 IST

2018 AL Wild Card Game - Oakland Athletics v New York Yankees
2018 AL Wild Card Game - Oakland Athletics v New York Yankees

Looking at the chart below, it is clear to see that the Yankees' annual revenue has grown substantially year over year. Long known as the biggest spenders in Major League Baseball, the Yankees have been actively trying to shed payroll to get under the Luxury Tax threshold of $200 million since 2016.

2018 was the first season in the history of the tax that the Yankees avoided paying a penalty and reset their "repeat offender" tax. Heading into the 2019 offseason, fans had been expecting a spending spree reminiscent of the Yankees of old considering the talented free agent crop and increased payroll flexibility.


Credit: reddit.com/r/NewYorkYankees
Credit: reddit.com/r/NewYorkYankees

So are the Yankees finally spending?

Not exactly. While the Yankees have been linked to the ultra-expensive free agent Manny Machado, they seem to be low-balling the star with their offer and don't intend to break the bank and chase Machado.

While they did fork over some money to reliever Zach Britton, the Yankees are actively looking to ship off the remains of the pitcher that once was Sonny Gray in order to help keep them below the luxury tax mark once again.

For a team that at one point regularly spent over 50% of its overall revenue on the team payroll (and still turned a hefty profit no less!), Yankees fans have been rightfully confused as to why management seems wary of spending money. At the current projections, the Yankees will be spending under 30% of their revenue on payroll, a number exceeded by notoriously frugal teams like the Tampa Bay Rays.

Well, why aren't the Yankees spending?

Yankees owner Hal Steinbrenner has gone on record saying that you can field a championship caliber team for under $200 million and it seems that the organization has really taken that to heart.

All that said, the Yankees have a plethora of talented youngsters on extremely team-friendly deals. More than the fact that they simply don't want to pay the luxury tax, the Yankees are likely trying to structure their payroll in a way where they don't have large sums of money tied up in older players when their young guns are in line for a pay raise.

The Yankees have made it abundantly clear that they have a plan to build a long-term dynasty and GM Brian Cashman seems dead set on not deviating from the course to chase a ring in the short-term.

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At the end of the day, it seems that keeping the exciting young core intact will remain the Yankees' top priority for the foreseeable future. Big names such as Judge, Andujar, Torres, and Sanchez are likely due for a monster payday in the not so distant future. Meanwhile, they already have star slugger Giancarlo Stanton locked up for a whole lot of money across 10 more years.

The Yankees are more than likely prepared to open up the chequebook and exceed the luxury tax once again, but not until they make sure the "baby bombers" are locked up first.

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