At the editorial offices of NoMaas in Boise, ID, we’ve been debating around the water cooler about how this $189 million thing will affect Wins & Losses. While we absolutely believe the main reason behind the payroll cut is so that Steinbrenner Inc makes more money, we’ve been discussing what effect the cut will have on the baseball product. After all, we’ve been advocating efficiency for years, and the Hal Doctrine might push the organization towards that more than ever. Efficiency is a good thing and obviously, Brian Cashman’s been steering the club’s decisions in that direction over the last few seasons. When opportunity costs increase, the evaluation process needs to be more astute. This can be a big positive over time.

With all this said, it’s also important to realize that Hal Steinbrenner is not allowing for a transition period. He’s drawn a hard line in the sand and mandated that this payroll level by achieved by 2014 — and considering the current configuration of the team, the Yankees will be worse than they are now, at least in the 2014 season. Here’s why:

The worst contracts will still be on the books in 2014

Try as they might to add bargain players, the Yankees will still have the millstone of Alex Rodriguez’ contract around their necks. ARod’s salary drops to $25 million in 2014, but for the purposes of the luxury tax, it will be counted at the yearly average of the entire contract: $27.5 million. This historically atrocious contract will serve as a painful reminder of the reality of opportunity costs for the next 6 seasons.

The next biggest contract the Yankees currently have is CC Sabathia, with a $24.4 million hit. Sabathia will turn 34 in 2014 and will likely be overpaid at that point, though not to the level of ARod. Mark Texeira will also be 34 in 2014. He’s already overpaid relative to his $22.5 million AAV contract.

Together that’s $74.4 million in obligations that you know are going to net negative value. If that’s not dispiriting enough, bear in mind that we may be subjected to a 40-year old Derek Jeter exercising his player option for 2014.

The best values on the current roster will cease being values in 2014

Nick Swisher will be a free agent after this upcoming season. Robinson Cano and Curtis Granderson will be a free agents after 2013. These are great players who are generating excellent value at their current prices. However, in 2014, most or all of that value will be gone. The Yankees will either have to pony up, or find replacements who are likely to generate less wins.

Russell Martin is a nice value at $7.5 million, but he will also be a free agent after the 2012 season, and he’s already rejected the Yankees lowball extension offer. Hopes are high for Phil Hughes and Joba Chamberlain to rebound as prime cost-controlled assets. However, next year (2013) will be their last year of arbitration and then it’s free agency. Even the king of value, Brett M Gardner, will cease to be such a grand bargain. The 2014 season will be his final arbitration year and we can expect him to earn about 70% of what he’s worth. That’s still a nice player to have, but it means more value to make up with less money.

GMs are becoming more savvy

As the Omar Minayas and Jim Hendrys of the world continue to get replaced by GMs without mild retardation issues, Brian Cashman will have less opportunities to cheaply acquire undervalued players like Nick Swisher. It’s more difficult to swindle. Combine this fact with less money to spend on free agents, and that’s a problem.

Randy Levine

While Brian Cashman has shown admirable restraint in acquiring free agents, the Yankees team president has a long history of spending like a drunken sailor. Chances are the front office knew last offseason that a payroll reduction would be required in the near future. Yet, Levine still handed out a totally irresponsible contract to Derek Jeter when nobody was bidding anywhere within earshot. He followed that up with the brilliant Rafael Soriano deal. Despite the new budget reality, there’s every chance Randy Levine can’t be stopped.

Hopefully over time, the $189 million directive will push the Yankees even more towards the philosophy of becoming leaner, maximizing the farm system, and avoiding idiotic contracts. Efficiency can produce great results. However, this will take more than two years to accomplish, and thus for at least the 2014 season, the Yankees will be a worse team than they are today.


Where many of our debates take place: the NoMaas break room