The Yankees Proved They Don’t Need To Spend To Win

The Yankees have proved over the past few seasons that in order to win games, they don’t need to spend their money on free agents.

“You Don’t Need a $220 Million Payroll…”

In 2012, Hal Steinbrenner candidly expressed his desire to build a Yankees team from the ground up, with a robust farm system capable of competing for a World Series. Notably, Hal stated that the Yankees “goal” was to get under the luxury tax threshold, a far cry from his father’s mantra of “win at all costs.”

Half a decade after Hal made those remarks, the Yankees built a team that has contended deep into the playoffs in two consecutive seasons, and in 2018, the first time in 15 years, the Yankees payroll was under the luxury tax threshold. Since 2003, New York has paid over $340 million in luxury taxes or 61% of all luxury taxes paid in total.

After slashing over $30 million from their payroll from 2017 to 2018, the Yankees (after the J.A. Happ signing) currently have an estimated $177 million in salaries committed for 2019. Many have speculated that Hal’s goal was to get under the tax threshold to be able to spend big in 2018 and 2019 when many star players are entering free agency. However, will Hal be willing to pay the luxury tax again?

Hal has already proven that New York doesn’t need to spend big to win. They were 1 win away from the World Series in 2017 with a core of young home-grown players such as Aaron Judge, Gary Sanchez, and Luis Severino. The 2018 rendition added Gleyber Torres and Miguel Andujar, both of whom contended for A.L. Rookie of the Tear, and have bright futures.

Report: Yankees To Meet With Manny Machado On Wednesday

While fans are clamoring for the Yankees to spend big on Manny Machado or Bryce Harper, they already have constructed a team that is very similar to the 2018 team that won 100 games. By adding James Paxton and J.A. Happ, the starting rotation is poised to outperform 2018. The Yankees will most likely add to their bullpen, which was the best in the league in 2018, but will they add the generationally talented Machado or Harper?

With teams like the White Sox and Phillies have very few long-term salary commitments, and Hal’s sense of fiscal responsibility, the Yankees will almost assuredly be outbid on Machado and Harper. It’s a stark change from years past when the Yankees earned the most money and spent the most money. Currently, the Bronx Bombers are still earning the most money, but they do not have the highest payroll.

Can’t Spend, or Won’t Spend?

The Yankees have come under sharp criticism for their austerity plan. From 2014-2016 they spent just under 50% of their revenue on payroll. In 2017, that number dropped to around 35%, due to spending less and earning more. If trends continue and the club remains below the luxury tax threshold and continue to see an increase in revenues, that ratio could drop to 30% or lower.

With the league average hovering somewhere around 45% of revenue being spent on payroll, these Yankees are penny pinchers compared to their peers. If New York spent the same portion of revenues on salaries as many other teams, their payroll would be north of $300 million. A number than some argue is sustainable.

With the Yankees winning, however, it’s hard to argue with their plan. Could they sustain a $300 million payroll? Sure. Do they need to to win? It does not seem like it at this point.

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