With Lee, Yanks would have to increase payroll

When it comes to the Yankees’ budget we hear, for the most part, vague statements. Last winter Brian Cashman kept saying that ownership gave him a number he had to stay under. This year Hal Steinbrenner has said that 2011 payroll will be on par with 2010. But does that mean the 2010 Opening Day payroll, or the final number that included Kerry Wood and Lance Berkman? With the work the Yanks have to do on the roster I’d hope it’s the latter. But we just don’t know. What we do know — or at least what we can reasonably assume — is that if the Yankees sign Cliff Lee this off-season, the team payroll will increase considerably by 2014.

If you head over to Cot’s you can see every team’s payroll obligations through 2014. For the most part you see one, maybe two players per team in that column, if any. What’s most common is an option buy-out. Most teams do not have significant commitments four years into the future, and for good reason. Even one bad contract can significantly hamper their flexibility. The Yankees are in a different position than every other team. They can make these commitments, knowing that there will be money in the checking account.

The only question the Yankees face is of how far they’re willing to expand future payroll. If they play their cards carefully they can probably sign Cliff Lee and still come in with a payroll under $210 million. That will include big contracts for Mariano Rivera, Derek Jeter, Alex Rodriguez, CC Sabathia, and Mark Teixeira. They’ll shed some of those contracts in the next few years, but they won’t shed all of them. In fact, if they sign Lee to a five-year contract worth the same $23 million Sabathia earns annually, they will have $96.5 million committed to four players in 2014. That does not bode well for payroll flexibility.

What’s worse, in 2014 those four players will be at the tail end of their primes, if they haven’t already exited. Alex Rodriguez will be 38; Mark Teixeira will be 34; CC Sabathia will be 33; Cliff Lee will be 35. We’ve seen players put up superb numbers at those ages, but those are the exceptions. While all four of the above are exceptional players, I think it’s a bit optimistic to think that they’ll all be producing at elite levels in 2014. Even if they are, they’ll still cost nearly half of what the Yankees have paid for the entire team in recent years. Should that then cause them to back off Lee?

If the Yankees plan to stand firm and not raise payroll significantly above $200 million, they probably need to give serious thought to the Lee question. To put it into perspective, the Yankees currently have roughly $140 million committed to eight players (plus Marte, who is dead weight) in 2011. That’s $17.5 million per player, with 17 more spots to fill. In 2014, with Lee in tow, they’d be committing $24.125 million per player, with 21 more spots to fill. I’ll leave that without commentary as to let it sink in.

If the Yankees do sign Cliff Lee this off-season, they’ll have made one thing clear: that they’re going to raise payroll, perhaps by a significant amount, over the next four years. With those four mega contracts running through 2015, at the earliest, the Yankees need more money in order to put players around them. Good players do not come cheap. Unless the Yankees’ farm system produces a string of stars in the coming years, there isn’t much of an alternative.