How a hypothetically reduced A-Rod suspension affects the 2014 budget

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Hopefully A-Rod brings some thunder to the lineup.

Alex Rodriguez made his season debut yesterday just hours after Major League Baseball slapped him with a 211-game suspension relating to PED usage and his involvement with Biogenesis. He won’t be going anywhere just yet as his appeal plays out in front of an independent arbitrator. Like it or not, having Rodriguez back should be a boon to the lineup, given the abominable production from other Yankees’ third basemen this season (51 wRC+, -0.9 fWAR). There’s no doubt that the Yankees will happily look the other way on his prior transgressions should he play a role in getting this club to the playoffs. Simply put, the Yankees need A-Rod. Without him, the odds of playing baseball in October would be much bleaker.

Aside from an offensive upgrade now, the organization also stands to reap benefits from Rodriguez eventually serving a suspension. With the results of the appeal not coming until the offseason, A-Rod will be set to serve his suspension (reduced or not) starting in 2014. While he’s suspended, he won’t be paid, freeing up some room in the $189M budget plan for 2014. With that in mind, let’s take a look at where the Yankees stand in their attempt to avoid paying any of the Competitive Balance Tax (CBT). In this illustration, I’ll assume that Rodriguez gets his suspension reduced to 100 games, meaning the Yankees will save almost $17M in salary for CBT purposes. Obviously, numerous scenarios might play out, but I’m guessing that a reduction to 100 games is conservative in terms of savings for the Yankees.

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2014 Salary Commitments

The $102,924,691 committed above also includes $12M in player benefit costs, and the 15 players at league minimum on the 40-man roster but not the active 25-man. If you’re wondering why Vernon Wells and Alfonso Soriano‘s CBT figures seem off, an explanation is coming a in a bit. With $189M the luxury tax threshold, the Yankees will have slightly more than $86M to play with, before some key arbitration cases with Brett Gardner, David Robertson, and Ivan Nova. Chris Stewart, Francisco Cervelli, Shawn Kelley, and Jayson Nix also are arbitration eligible, but are unlikely to have significant payroll effects. In fact, some of them are likely to be non-tendered in favor of some slightly cheaper, near league-minimum players within the organization.

The elephant in the room is Robinson Cano‘s impending free agency. Cano will be the top free agent on the market this offseason, and will undoubtedly become one of the highest paid players in baseball. If the Yankees want him back, it’ll take a huge chunk out of their budget. Plus, there’ll be a need to either replace or retain Hiroki Kuroda, while making up for the losses of definite and/or likely retirees (Mariano Rivera, Andy Pettitte) and other free agents (Phil Hughes, Curtis Granderson). Retaining or replacing that kind of production won’t come cheaply.

I’ve embedded this offseason scenario in a Google Doc below. The other tabs of the document can be found in the 2014 Budget Tracker page above. As touched on before, the explanations for Soriano’s and Wells’ CBT figures are within the spreadsheet. Furthermore, you can follow my logic in the paragraphs below the embedded hypothetical payroll.

First, I decided to non-tender Francisco Cervelli and Jayson Nix. I could have gone with Stewart as a catcher to be cut, but I figured the Yankees’ fascination with him may result in him staying put. Plus, I expect the Yankees to attempt to upgrade at the position, reverting Stewart to a backup role. Luis Cruz can serve as a cheaper utility infielder, and is a better defender to boot.

Next, and as I have done in previous scenarios, I used arbitration trends and similar player case results as a general guideline for estimating the outcomes of the looming arbitration cases (Gardner, Robertson, Nova, Kelley, Stewart). This resulted in $16.7M added to the payroll. That brings the count up to $119,624,691. Add in the pre-arbitration players with modest raises, and the total comes to $123,794,691, with a bit more than $65M to spare.

Re-signing Cano to a deal with an average annual value of $25M (say, seven years, $175M) leaves $40M to go. That seems like plenty of money left to spend, but truthfully, it isn’t all that much considering the voids that remain. At this stage in the exercise, there are gaping holes in the rotation, catcher, left side of the infield, and the corner outfield. The bullpen is a bit thin, too. Moreover, the Yankees would need to leave space open for any 2014 trade deadline additions, and the risk that A-Rod hits his 660th home run late next season after his suspension ends, triggering a $6M bonus.

It’s going to be very hard to count on CC Sabathia as an ace going forward, given his performance this season. It’s hard to say if Hiroki Kuroda will be back next season given some of his trepidation last winter. He’d certainly be welcome to return, but it would probably require a raise from his $15M salary in 2013. Without him back, Ivan Nova becomes the de facto #2 starter. Although his recent performance is promising, it’s difficult to be confident in him as the second starter. After that, the shoulder and elbow issues of Michael Pineda and David Phelps respectively are extremely disconcerting.

At backstop, there’s no way the Yankees go into 2014 with a Cervelli-Stewart tandem. I would also be surprised if they gave Austin Romine or J.R. Murphy a shot, given the club’s preference of veterans. There is one attractive free agent option: Brian McCann. However, he could very well cost $13-15M on an annual CBT basis. At that price, you can see where this is going: the Yankees’ don’t have enough budget room to patch up all of their problems via free agency.

With the rotation and catching established as arguably the two biggest concerns, let’s briefly examine the other issues. Despite the A-Rod savings, the suspension will make the left side of the infield even worse. It’s fair to question if Derek Jeter can hold up at short anymore, given his three DL stints this year. Plus, who is going to play third with A-Rod absent? For now, David Adams is the best internal option, but doesn’t leave anyone with much confidence. And how about that outfield? Other than Gardner, it’s pretty damn bleak. Finally, while the bullpen is going to take a big blow with Rivera’s retirement, I do have confidence in the organization’s ability to find and develop relievers via trade (Kelley) and within (Robertson). Dellin Betances has impressed in a bullpen role with Scranton, and could become a factor next year. Others such as Mark Montgomery and Chase Whitley could get chances, too.

Ultimately, the Yankees will have to scrounge at certain positions because of the lack budgetary room. They may only be able to sign one of Kuroda, McCann, or Granderson,  forcing them onto lesser but cheaper or reclamation project free agents. Think guys like Mark Reynolds, Carlos Ruiz, David Murphy, Jorge De La Rosa, Dan Haren, etc. None of them are very inspiring. The trade market is also a viable option, but it would be foolish to dump top prospects given an already grim future.

Don’t get me wrong, the savings from A-Rod’s suspension are sure to help the Yankees’ upcoming offseason. Whatever amount is saved from the suspension is going to help the club’s chances in 2014. However, it doesn’t mask the fact that the $189M plan was hastily contrived. The roster construction has raised many issues going forward, with many of them not looking promising. Health concerns, albatross contracts, washed up veterans, you name it. At this point, we can only hope that Rodriguez makes the best of his opportunity to play in 2013, and for his suspension to be longer than the assumed 100 in this instance. The more money freed up, the better. Every extra dollar to spend makes the 2014 outlook slightly less pessimistic.

Photo by gbrunett on Flickr (Original version) UCinternational (Crop) [CC-BY-2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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