Yankees are facing a $300 million question with payroll increasing

Late in 2023, Yankees managing owner Hal Steinbrenner publicly announced that spending $300 million shouldn’t be necessary to win a championship.

“I do believe that a team shouldn’t need a $300 million payroll.”

Teams with far inferior payrolls have had significantly more success than the Yankees over the past decade, but general manager Brian Cashman has seemingly convinced Steinbrenner not only to push over $300 million but to keep going.

The Yankees have several awful contracts tying them down, notably the $98 million owed to Giancarlo Stanton until 2028. They desperately need Carlos Rodon to bounce back after a terrible first year to start a six-year, $162 million deal and are seemingly about to spend on Juan Soto after the 2024 campaign.

The Yankees are already at $300 million in projected total tax allocations this upcoming season, a significant amount that would blow past the third luxury tax threshold, a number that Steinbrenner has been desperately trying to stay beneath over the past few years. The team has Aaron Judge locked in a $40 million salary, Gerrit Cole at $36 million, and Stanton with a $22 million luxury tax salary despite coming off two awful seasons.

The Yankees are Willing to Spend…Clearly

The Yankees were willing to give $300 million to Yoshinobu Yamamoto, which would’ve blown past their projected payroll, but they decided to take a more affordable route after missing out on the star international pitcher.

They signed Marcus Stroman to a two-year, $37 million deal, conceivably about $10 million less than Yamamoto is earning per season. They are still in the mix for a number of quality bullpen arms and are still monitoring the Blake Snell market, hoping for his price to decrease.

Cashman isn’t trying to spend $200 million long-term on a 31-year-old starter with longevity issues. Instead, he may try to wait until the trade deadline over the summer to make another acquisition, one that is a bit more affordable.

The Yankees have the offense to field a championship-caliber operation; their pitching is suspect in the rotation. They’re hoping for the bounce back of several players and the development of Clarke Schmidt, with their depth strategy relying heavily on Will Warren to take a step forward and graduate from the minor league system.

The question is, does Cashman have the green light to surpass $300 million in payroll, and by how much?

Next off-season, the Yankees don’t have many big deals coming off the books, aside from a club option on Anthony Rizzo‘s contract and Soto heading to free agency after earning $31 million to avoid arbitration. DJ LeMahieu will still be under contract until the 2027 off-season, earning about $15 million per year.

Gleyber Torres and his $14.2 million salary will be off the books, so a decision has to be made on his future. The Yankees could try to leverage his value now for starting pitching or keep him in hopes of making a run in the World Series with his bat in the lineup.

At the end of the day, the Yankees have some financial decisions to make, but they have more than enough resources to pay over $300 million and keep going without even blinking an eye. The most important thing is saving enough to keep Steinbrenner happy and making a strong push for Soto in for agency next off-season.

Soto could earn over $400 million as a free agent on a deal of at least a decade, so the Yankees will not only need to be aggressive but be willing to make Judge the second highest-paid player on the team.

The truth is, the Yankees need to be getting younger, and Soto is only 25 years old, so he could be the future of their organization once Judge and Cole inevitably hit a wall.