Saturday, February 2, 2013

The Fall of the Yankee Empire

Sometimes when you're caught in a tidal wave, it's hard to lose perspective that an end is in sight.  It can't last forever.  Nothing does.  It sure seemed like The Yankee Empire (trademark pending) was going to last forever, but in recent years there have been signs that it is on the fade.  The year 2012 accelerated that point.

Every great empire has a strong leader (most of the time a dictator or a series of dictators) and the Yankees were no exception.  The first chink in the armor for them occurred on July 13, 2010 when George Steinbrenner died.  Steinbrenner ruled the Yankees with an iron fist and from the mid-90's to his passing they were not allowed to lose under his watch.  Prior to his death, his influence started to wane and his sons gradually took over control.  After his passing, Hank assumed the majority of control over the franchise.

Meddling still occurred (the phrase "to meddle" is probably on the Steinbrenner coat of arms), such as when Rafael Soriano was signed against GM Brian Cashman's wishes.  Plus the Alex Rodriguez re-up in 2007, after he opted out of a contract scheduled to run until 2010, reeked of interference from the ownership.  Especially the part with bonus clauses for certain home run milestones.

But by and large, spending has been restrained under the reign of Prince Hank.  Since 2010, the only long term deals of note under his watch were the re-signing of CC Sabathia (a decent enough deal for a top of the rotation pitcher) and the re-signing of franchise icon Derek Jeter (3 year - $51M from 2011 to 2013).  Heck, the Yankees even engaged in a salary dump with the Pirates by picking up about half of AJ Burnett's contract in exchange for 2 players that will never see the majors most likely (Diego Moreno and Exicardo Cayones).

The most major fissure in the Yankees empire though were two independent, yet related, events that happened in 2012.  The first was the sale of the Dodgers in May to the Guggenheim Group for $2 billion dollars.  Immediately, the Dodgers started throwing money around everywhere.  They traded for  nearly every bad contract on the Red Sox and tossed huge dollars to international players like Yasiel Puig and Hyun-Jin Ryu.  The second event was every story during the deadline and the offseason of 2012 involving the phrase "Yankees trying to get under the $189M luxury tax threshold for 2014".  This caused them to largely stay out of free agency this past offseason.  When they did dabble, it was mainly for 1 year deals.

The Yankees have a very old team.  Most of the time that means experienced, but in this case it also means that players are exiting their peaks and getting injury prone.  A-Rod recently got caught (again) to a PED scandal.  The Yankees are quietly trying to get out of the remaining 5 years and $114M they owe him by saying that his 2nd hip operation in 3 years may end his career.  If that happens, insurance will theoretically pick up 85% of the cost, which means they will owe him about $16M.  Most importantly, though, they get to take his approximately $23M/year off their payroll for luxury tax purposes in the retirement scenario.  Of course, that only works if A-Rod actually, you know, retires.  He defiantly denied involvement with the Biogenesis clinic and said he is working hard to come back in 2013 to continue playing.

The Yankees have 3 mega contracts on the books after 2013 -- Texeira, Rodriguez, and Sabathia.  Texeira is also on the downslope and on the books through 2016 at $23.125M/year.  Sabathia is still effective and on the books through 2016 at $23M/year (with a vesting option for 2017).  Jeter has a player option for $8M in 2014, so it's hard to see him turning that down, but $8M to the Yanks is not that much.

The Yankees will need to decide about the future of Robinson Cano after 2013.  It makes sense that the Yankees will sign him, as he is their top hitter, but it is not inconceivable that the Dodgers swoop in and grab him in free agency.  Curtis Granderson is also a free agent, but with his age and declining skills the Yankees won't make much effort to re-sign him.

The Yankees don't have much in the way of replacements at the AA and AAA level to immediately replace players after 2013, either.  The Yankees were banking on a wave of pitching led by Dellin Betances, Manny Banuelos, and Michael Pineda, but all three have dealt with significant injuries and/or ineffectiveness.  The Yankees do have some potential impact hitters in the form of Mason Williams, Gary Sanchez, and Tyler Austin but all of them will probably spend the majority of 2013 at High A and not be ready for the 2014 season when some of these free agents depart.

With less and less high quality players reaching free agency during their peak years, it's hard to imagine the Yankees reloading for the 2014 season (when they want to stay under the $189M threshold) via free agency.  It's possible that Cashman uses players like Austin, Williams, and Sanchez in trades to accelerate the process by trading for younger major league players with multiple years of control.  But realistically, it seems as if there may be some lean non-playoff years after 2013.  With the rise of the Blue Jays and the continued success of the Rays, it's even possible that the Yankees have some losing seasons while they rebuild-but-don't-say-rebuild.  The last losing season for the Yankees was 1992 -- the mirror image of the last Pirates winning season.

The Yankees are in the largest media market and are willing to spend huge amounts of money, but they are no longer the top of the heap in baseball.  There may be some lean days ahead of them.

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