NEW YORK — In a surprise decision, the New York Yankees designated DJ LeMahieu for assignment. Though he was the target of fan discontent following his form and recurrent injuries, no body has expected this move. There was widespread belief that Yankees’ owner Hal Steinbrenner was averse to absorb the remaining contract that carried on to the end of the 2026 season.
However, they took the final decision to cut LeMahieu. With his release, the Yankees will pay $39.26 million over the next two seasons to players no longer on their roster, with Aaron Hicks and DJ LeMahieu accounting for the majority of the dead money burden, according to contract data from FanGraphs and Cot’s Baseball Contracts.
The financial obligations highlight the long-term costs of veteran contracts that failed to deliver expected value, creating ongoing payroll constraints as the Yankees manage their roster construction at the trade deadline.
LeMahieu designated, $21.6M remaining
The Yankees designated DJ LeMahieu for assignment Wednesday, leaving $21.61 million on his contract through 2026. The two-time batting champion is owed $6.61 million for the remainder of 2025 and $15 million guaranteed for next season.
LeMahieu was in year five of a six-year, $90 million contract signed before the 2021 season. The two-time batting champion, now 37, is unlikely to be claimed off waivers due to the substantial financial commitment, meaning the Yankees will absorb the full cost minus any league minimum salary if another team eventually signs him.
Hicks deal still haunts Yankees payroll
Aaron Hicks represents the largest single dead money commitment at $9.26 million for 2025. The switch-hitting outfielder was released in May 2023 after batting .188 with one home run in 28 games, but the Yankees remain responsible for his seven-year, $70 million contract through this season.
Hicks, 35, is currently out of baseball after posting a 20 OPS+ in 18 games with the Los Angeles Angels last season. His last major league appearance came April 28, 2024.
Trade costs add up
The Yankees owe $7.1 million in 2025 for trade retention payments, led by $2.25 million to Pittsburgh for JT Brubaker and $2 million to Milwaukee for reliever Devin Williams.
Additional retention includes $850,000 to Boston for Adam Ottavino from a 2021 trade and smaller amounts for other players acquired via trade.
Offsets provide relief
Financial relief comes from several sources, reducing the Yankees’ net dead money burden significantly in 2026:
2025 DEAD MONEY BREAKDOWN
| Player/Category | Amount |
|---|---|
| Aaron Hicks | $9.26M |
| DJ LeMahieu (remaining) | $6.61M |
| Trade retentions | $7.10M |
| Minor league releases | $1.29M |
| Total obligations | $24.26M |
| Cubs payment (Bellinger trade) | ($2.50M) |
| Other team salary coverage | ($1.31M) |
| Net dead money | $20.45M |
2026 DEAD MONEY PROJECTION
| Source | Amount |
|---|---|
| DJ LeMahieu salary | $15.00M |
| Total obligations | $15.00M |
| Cubs payment | ($2.50M) |
| Marlins payment (Stanton trade) | ($10.00M) |
| Net dead money | $2.50M |
Source: Fangraphs
The Miami payments stem from the 2017 Giancarlo Stanton trade, where the Marlins agreed to pay $10 million annually from 2026-2028 if Stanton didn’t opt out of his contract.
Luxury tax impact
The dead money pushes the Yankees deeper into luxury tax territory. Their 2025 competitive balance tax payroll ranks second in MLB at $296.33 million, approximately $55 million above the base threshold.
Dead money accounts for $31.36 million of the CBT calculation, triggering additional tax penalties at a 50% rate for repeat offenders.
League context
The Yankees’ dead money burden exceeds the typical MLB range of $12-15 million annually. However, unlike many franchises, New York carries no deferred compensation payments, avoiding Bobby Bonilla-style obligations that burden other clubs for decades.
The Tampa Bay Rays, Toronto Blue Jays and Yankees are the only teams with zero deferred payments in 2025, according to industry analysis.
Contract lessons
Both the Hicks and LeMahieu situations illustrate risks of long-term deals for aging players. Hicks signed his extension at age 29 following Tommy John surgery, while LeMahieu was 32 when he inked his six-year pact.
“Should’ve been 3 years/$90M,” one analyst noted on MLB Trade Rumors, referencing the Yankees’ preference for longer deals to reduce average annual value for luxury tax purposes.
Payroll flexibility impact
The dead money constraints affect the Yankees’ flexibility for roster moves, particularly as they approach the July 31 trade deadline. The team has approximately $86 million coming off their 2025 books, but dead money obligations reduce their effective payroll space for potential acquisitions.
General manager Brian Cashman acknowledged Wednesday he will be looking for a third baseman as the trade deadline approaches, with the team currently using a combination of utility players at the position following LeMahieu’s departure.
FINANCIAL SUMMARY 2025-2026
| Year | Gross Dead Money | Offsets | Net Impact |
|---|---|---|---|
| 2025 | $24.26M | ($3.81M) | $20.45M |
| 2026 | $15.00M | ($12.50M) | $2.50M |
| Total | $39.26M | ($16.31M) | $22.95M |
The Yankees open Thursday’s game against Seattle at 54-44, sitting 3.5 games behind the first-place Baltimore Orioles in the AL East with LeMahieu no longer on the roster and Chisholm back at second base full-time.
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