Why the Yankees are betting on prospects after $5.3M draft cap

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The New York Yankees will enter the 2025 MLB Draft in July with one of the smallest bonus pools in the league — just $5.38 million to spend across the first 10 rounds, according to MLB.com’s Jim Callis. The restricted spending stems from two penalties: the club exceeded the second tier of the competitive balance tax and forfeited its second-round pick after signing free agent pitcher Max Fried. That combination dropped their top selection from No. 28 to No. 38 and eliminated their next-highest pick entirely.

Yankees face MLB Draft with limited bonus pool, but youth development provides a lifeline

This leaves the Yankees with little room for flexibility in the draft. Unlike teams with larger pools, New York will likely be forced to target more college players who are willing to sign for less, instead of high school prospects with strong college commitments and higher bonus demands.

And yet, despite their limited draft capital, the Yankees have quietly become one of the more efficient organizations at producing homegrown players. Roughly a third of their current 26-man roster consists of players developed within their system. The lineup includes catcher Austin Wells, shortstop Anthony Volpe, DH Ben Rice, and outfielders Jasson Dominguez and Oswaldo Cabrera. The pitching staff features homegrown arms like Clarke Schmidt and Will Warren.

Aaron Judge, the face of the franchise, is also a product of the Yankees’ system, drafted 32nd overall in 2013. While he was re-signed as a $360 million free agent, his roots with the club remain central to the Yankees’ narrative.

This wave of talent comes after years of inconsistent draft results. The Yankees haven’t picked within the top 20 since selecting Schmidt at No. 16 in 2017. Their average draft position since then has hovered around the 25th spot, due largely to consistent postseason appearances and repeated luxury tax penalties. These challenges have forced general manager Brian Cashman and his scouting team to find value in the margins — in later rounds, overlooked international markets, and strategic trades.

That strategy has paid off. While players like Judge and Domínguez grab headlines, others — like Rice (12th round), Warren (8th round), and Cabrera (international signing for just $100,000) — underscore the organization’s ability to develop contributors beyond the early rounds.

Even the Yankees’ trade assets speak to their developmental success. The December 2023 trade with the Padres for Juan Soto and Trent Grisham cost New York a haul of mostly homegrown players, including Michael King, Drew Thorpe, Jhony Brito, and Randy Vásquez. That group, built through smart drafting and player development, enabled the Yankees to swing one of the biggest deals of the offseason.

Yet, the farm system rarely earns top rankings. Baseball America placed it 25th earlier this year, and The Athletic’s Keith Law slotted it 21st. Part of the reason is that New York frequently trades prospects to stay competitive. And while some deals have flopped — Joey Gallo, Josh Donaldson, Frankie Montas — the overall output from the Yankees’ pipeline remains significant.

Internally, the Yankees credit improved collaboration across departments — from analytics to scouting to performance science — as a key reason for their developmental strides. Damon Oppenheimer, the club’s amateur scouting director, emphasized the importance of understanding a player’s makeup, beyond tools and data points. Farm director Kevin Reese added that modern player development involves input from across the organization, not just on-field coaches.

The Yankees’ next wave still carries uncertainty. Volpe’s offensive ceiling remains in question. Domínguez, though electrifying, is recovering from injury. Rice could end up another Greg Bird or Kevin Maas — promising but fleeting. But for all the misses, there are enough hits to suggest the system is working.

With a shallow draft pool and high expectations, the Yankees will need to lean on that internal success more than ever. For now, their homegrown core is holding its own — and keeping the team afloat amid financial restrictions and shifting draft realities.

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