How much will the Yankees’ payroll be in 2023?

Yankees' payroll is one of the highest in the MLB.

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The Yankees payroll is currently $156 million for 2023. They need another $45 million to cover arbitration salaries. This brings the Yankees’ payroll to $202 million. If they sign Aaron Judge, who is to cost about $40 million a year, the Yankees are likely to pay more than $240 million to their players and cross the CBT threshold of $233 million for luxury tax. Anthony Rizzo is also going to add to it if he is re-signed.

Following their elimination from the postseason — the Yankees’ 13th consecutive year in which they were unable to reach the World Series — the team is now facing an offseason that has the potential to significantly impact how they move forward. However, there is discontent among some of the most devoted and vocal supporters of the team. These supporters are concerned that the Yankees, whose current core has become a little bit stale and has not had much success in the playoffs despite the big Yankees’ payroll, are going to run it back with many of the same characters.

The New York Yankees have already exercised their next-season option on Luis Severino, a decision that didn’t require much thought, and they have also made qualifying offers to Aaron Judge and Anthony Rizzo, both free agents and are likely to have many suitors.

They may put Gleyber Torres for trade and retain Isiah Kiner-Falefa. As the Yankees plan to build their team for 2023 and beyond, here is how much will be the Yankees’ payroll.

Payroll for 2023 committed

According to Cot’s Baseball Contracts, the Yankees need at least a commitment of $156 million. This includes benefits for 40-man players and other player benefits, but this the Yankees’ payroll does not the money owed to their players who are eligible for arbitration.

The Yankees have big contracts with some players. Gerrit Cole‘s salary is $36 million annually until the 2027 off-season. Giancarlo Stanton is to get an annual pay of $32 million through 2025, $29 million in 2026, and $25 million in 2027. They have to pay $22 million to Josh Donaldson in 2023 and 2024.

The Yankees have continued to maintain payrolls that are among the highest in baseball. But they have become much more aware of the luxury tax threshold, and as a result, the Yankees’ payroll is reluctant to cross it and remain well over it for years at a time.

For instance, the total Yankees’ payroll for the purposes of CBT in 2022 was very close to the equivalent of $260 million. In 2021, it was $208,4 million, while in 2020 and 2019 it was $239 million and $234 million respectively.

The minimum threshold for paying the luxury tax will be $233 million in 2023, while the maximum threshold, known as the “Steve Cohen tax,” will be $290 million. Will the Yanks be able to beat that top number?

The amount of money that they pay their players who are eligible for arbitration and Judge will have a significant impact on the Yankees’ payroll.

The Yankees’ payroll increase will be necessitated by arbitration

There are 12 Yankees eligible for arbitration and here is what they could make. This could add $45 million to the 2023 Yankees’ payroll.

Players Salary projected in millions
Gleyber Torres $9.5
Frankie Montas $7.025
Isiah Kiner-Falefa $ 6.25
Lou Trivino $3.6
Jose Trevino $3.6
Clay Holmes $3.2
Jonathan Loaisiga $3.0
Domingo German $2.35
Nestor Cortes $2.1
Lucas Luetge $1.95
Michael King $1.9
Kyle Higashioka $1.8

If Torres is traded, his salary would be eliminated. But the contract of Nestor Cortes is up for consideration and he is likely to have a big offer. Also, the Yankees will have players in return for Torres.

Overall, this brings up the Yankees’ payroll to $202 million. Depending on possible trades and contract talks, the franchise has about $31 million to remain under the lowest luxury tax threshold. If they target the upper limit, the Yankees have the room to spend $88 million more.

The Yankees’ payroll and Aaron Judge

If the Yankees re-sign Judge, it’s likely that it will cost them about $40 million a year for eight years or more. Adding $40 million to the money the Yankees’ payroll brings it to about $243 million in 2023. It comes between the minimum and maximum luxury tax limits.

The Yankees also want to try to keep Rizzo, and if Taillon leaves, they will need to add more stability to their starting rotation. They also need to strengthen their feeble bullpen, which can add to the Yankees’ payroll.

The cost of getting new players

The plan to bring new faces will depend on whether Judge comes back. If he is, the Yankees will be restrained with a lesser spending plan to avoid topping the top luxury tax threshold. It seems less likely that the Yankees will go after another high-priced offensive player, such as Carlos Correa, Trea Turner, and Xander Bogaerts, when they have to spend a lot on Judge.

But if Judge leaves, everything could change. The Yankees could make one or two big moves in free agency or make a big trade that brings in a lot of money.

The continued pressure to win a title may also motivate the Yankees to spend more. If some of their most highly regarded prospects get MLB caps, this would help cut the Yankees’ payroll significantly over the next few years.

Then 2024 Yankees’ payroll

The Yankees already have two huge contracts with Cole and Stanton until 2027. And if they sign Judge, the three of them will cost them about $108 million each year for the next five years. However, there will soon be some relief to the Yankees’ payroll, as Donaldson’s money may not be there after 2024.

With Anthony Volpe, Oswald Peraza, Jasson Dominguez, and other prospects on the roster, the Yankees’ payroll will be gradually cut in 2024 and 2025 to around $100 million.

Do you agree with the analysis? Do you have anything to add?

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