To Build a Ballclub: Analyzing Yankees Spending Trends of the Last Decade

The Yankees general manager and owner have drawn the wrath of fans, but do they deserve it? (AP)

(All images in this article are from the MLB Trade Rumors Offseason in Review annual series)

The 2021-2022 offseason has been frustrating for a number of reasons. The 99 day lockout condensed transaction activities in two short periods before December 1st and after March 11th. Before the lockout, the Yankees made only a single move: resigning Joely Rodriguez. Fans had big expectations for their post lockout activity, but the team’s actions were even more confounding in this period, as they failed to snag any of the major trade or free agent targets that they had been expected to acquire. This has added to the recent frustration that fans have felt with the direction that the team has taken, from its ascendant play in the 2017 season to its arrival as a juggernaut in 2018-2019 to its settlement into above average but not quite good enough play in 2020-2021. Five All Star shortstops and two All Star first basemen were on the market, but the Yankees chose to fill their positional needs by avoiding all of these players and instead trading for players who did not command long term deals. However, the team still took on a significant amount of money, mostly in acquiring Josh Donaldson, and is prepared to run a payroll that will be their highest ever. How did the Yankees get to be a team that simultaneously is spending massive amounts of money on player payroll and still feels awkwardly constructed and has been opened up to criticism for being cheap? The answer is a lot more complicated than it seems on the surface and to best understand how the Yankees came to be constructed as they are, how they operate now and why their transactional history has been so frustrating, we have to take a trip in the Wayback Machine back to the 2013-2014 offseason.

2014: Free Agency Finale

The 2013 season, the first playoff-less season for the Yankees since 2008 and their worst season by record since 1992, was both a success and a failure. Yes, this was the worst Yankees team in quite some time, but the amount of injuries that the team sustained and the roster meanuevering needed to keep them afloat and win 85 games was quite impressive. The Yankees were in the wild card hunt until September and it didn’t take much imagination to see how they could return to contention quite quickly. However, the loss of two superstar hitters, Robinson Cano and Curtis Granderson, the retirement of Mariano Rivera, and the yearlong suspension of Alex Rodriguez meant there were some big lineup holes to fill and plenty of money to spend to do so. The fallow farm system meant that Hal Steinbrenner and Brian Cashman did the only thing they knew how to do: go on a free agent spending spree. 

2013-2014 Offseason Free Agent Signings

That winter, the Yankees welcomed Carlos Beltran, Brian McCann, Jacoby Ellsbury, and Masahiro Tanaka to the team, in addition to smaller depth signings like Kelly Johnson, Matt Thornton, and Brian Roberts. Suddenly, the Yankees had a new catcher, two new outfielders, and a new ace pitcher all at once. It was a spending spree even more extensive than their pre 2009 outlay (that scored them CC Sabathia, Mark Teixeira and AJ Burnett) and put championship aspirations on the table. When we look at these moves, we can see a lot of what current Yankees fans are dying for from ownership and general management - making financial expenditures to secure quality players without giving up prospects. That winter, the Yankees only made two trades but spent $503 million on signing 10 players. Looking back, did all of these moves work out? No - the Jacoby Ellsbury deal was an abject failure. However, the Tanaka, McCann and Beltran deals were unqualified successes and helped the team establish a foundation for future contention in both the acquisition of these players or the future players they would acquire by trading away these players. Tanaka played a key role on the 2017-2020 Yankees, McCann was traded for Albert Abreu and Jorge Guzman, who helped the Yankes acquire Giancarlo Stanton, and Beltran was traded for Dillon Tate, who later helped the Yankees acquire Zack Britton. Additionally, signing free agents to fill roster holes allowed the Yankees to keep their prospects in the minors to develop without putting pressure on them to contribute earlier than necessary or be shipped off in a trade for another player. Imagine if Gary Sanchez was promoted in 2015 before he was ready or if Aaron Judge or Luis Severino was traded that winter for a player to help a mediocre 2014 Yankees team? It would have been disastrous for the future Yankees. The lesson of this offseason should have been that even if adding free agents doesn’t immediately make you a winning ballclub, it can help you in various ways. However, the fact that the 2014 Yankees had an even worse record than their 2013 counterparts, which was mostly due to a weak roster construction around the imported players, meant that ownership took the wrong lesson from this spending spree: it did not guarantee automatic success. When the 2015 and 2016 Yankees played similarly mediocre baseball, it spelled certain doom for the chances of this ever happening again. I would argue that this spending spree was crucial for the success of the soon to be Baby Bombers, even more so than the moves that occured later on down the line. Unfortunately, we see the first signs of the Yankees focusing on immediate outcomes rather than process, a maneuver that will continue to hurt them down the line. 

2016: The Great Reset

After the 2014 offseason, the Yankees were more judicious with their winter spending. They spent only $100 million in 2015 and actually did not sign a single MLB free agent in 2016. 

2014-2015 Offseason Free Agent Signings

2015-2016 Offseason Free Agent Signings

However, they were very active on the trade market and chose to supplement the core of their team in this manner.

2014-2015 Offseason Trades

2015-2016 Offseason Trades

These Yankees teams were mostly trading for undervalued players and trading away second tier prospects. You can see many current and former parts of the 2017-2022 Yankees that were acquired this way. The exception was the Aroldis Chapman deal, which was an outlier in its own way because of his domestic violence case that lowered his value. For the most part, the Yankees were staying in neutral, not getting drastically better but not getting much worse. The fate of this team was still resting with that 2014 free agent class. Their slow build for the future was an acceptable way to proceed roster-wise, but their poor play on the field meant that something would have to change soon. 

In 2016, with the Yankees on their way to their fourth sub 90 win season in a row, Brian Cashman pulled the plug. For the first time in decades, the Yankees were sellers at the deadline and took advantage of two teams who were desperate to trade top prospects for star relievers. In his years as an owner, Hal Steinbrenner had never been in charge of a team that took a step back to take a step forward, even as other teams around the league took similar actions. It seemed enticing but not something that the Yankees could ever do; that wasn’t their style. More importantly, it was a financial unknown as opposed to the sure bet that their current strategy provided. Brian Cashman, who had been working for the team for almost 20 years at that point, was desperate for a new challenge and wanted to engineer this rebuild to try something that the Yankees had never done before. The influx of prospects, combined with a major organizational shakeup in the farm system leadership before 2015, meant that this was now actually possible. 

The Yankees would not make the playoffs in 2016, but this allowed for the first real sign of change: the promotion of Gary Sanchez, who tore up the league in 2016 and almost won Rookie of the Year in two months of play. Sanchez was the beginning of a wave of young players who would come up and play key roles for the Yankees over the next few years. Aaron Judge, Gleyber Torres, Luis Severino, Miguel Andujar, Clint Frazier, Chad Green, Jordan Montgomery and Jonathan Losiaga have all contributed in some way since 2017 and were all either drafted by the Yankees or signed/traded for at a young age. This was exciting for Yankees fans and introduced a new team building strategy into the Yankees’ repertoire. It also solidified a bad message for management. The last few years had shown that the new way to improve the team was not by signing free agents, but by promoting prospects and tinkering around the edges to keep the team afloat. Internal, not external, was the way to go. The fact that this paid off so quickly and so effectively was not the norm. For every Astros and Cubs successful rebuild, there was an unsuccessful Phillies rebuild.

To fully utilize the rebuilding strategy, the Yankees management had to be quick to adapt if and when the process didn’t go as planned. They had to understand that this was an effective way to build a team but it could not be the only way. The pre-2017 Yankees were also very successful and were built in an entirely different manner. To truly maximize their potential, the Yankees had to be able to spend money and develop players. In 2017 and 2018, the team didn’t need to worry about this issue because of the success of their young and cost controlled core and their ability to add supplementary pieces without real concern for any kind of upper tax threshold, thus allowing them to fully embrace the fruits of their quick rebuild. However, once these young pieces became more expensive and not as uniformly successful as they had been at the outset, the Yankees needed to spend money and employ some of their pre-2017 team building strategies again. It would be a matter of time before we would see if they understood that or not.

2018: The Beginning of Austerity 

The 2018 Yankees were set up for massive success. They had a young talented core that had just come within a win of the World Series and they were able to supplement it with midseason trades for Sonny Gray, Tommy Kahnle and David Robertson, adding pitching depth for the upcoming season. Additionally, they flexed their financial muscle and took advantage of the Miami Marlins’ limited ability to spend by taking on reigning MVP Giancarlo Stanton’s contract for a limited prospect haul. Judge, Severino and Stanton were already established. Frazier, Torres and Adnjuar were on their way. It seemed the stars were aligned and the Yankees were back. However, the first seeds were sown for how these New Yankees were going to operate and it already spelled trouble for the future. 

2017-2018 Offseason Free Agent Signings

First, only $14 million was committed in free agency, continuing a troubling trend that dated back to the 2014 free agent spending spree. After that outlay, the Yankees had simply stopped spending on free agents (Aroldis Chapman notwithstanding). As mentioned previously, they had learned the wrong lessons from a spending spree that was actually pretty successful and allowed them to grow the team they had currently built. The Stanton acquisition was masterful, but the team had otherwise decided to stand pat and avoid signing or acquiring other players who would meaningfully impact the Major League team, instead simply choosing to stand pat. This was a function of the fact that management trusted its farm system a lot more to fill in gaps, but the team had another goal in mind. From the MLB Trade Rumors Offseason in Review series: 

“For the Yankees, the 2017-18 offseason was much more about being opportunistic and reinforcing existing areas of strength than it was about addressing glaring weaknesses. Rather than acquire a specific skill set or a player at a certain position, the team’s top priority seemed to be resetting its luxury tax penalty by dipping back beneath the $197MM tax threshold.”

Yes, the luxury tax rears its ugly head, first made popular by its appearance in the 2012-2013 offseason. Back then, the desire to get under the tax tanked the team’s chances at success in the following season, but that was an aging team trying to get under the threshold. This team had the young pieces and the payroll flexibility to do it in a manner that allowed them to also field a competitive team. Hal Steinbrenner would soon realize that this method of team building allowed you to stay under the luxury tax and have a winning club - the best of both worlds. The 2018 team, with its $182 million payroll and 100 wins, was Hal’s dream.

In all honesty, the 2018 team might have been the most complete iteration of the Yankees that we’ve seen. Unfortunately, the Red Sox chose that season to be generational and beat the Yankees in four games in the playoffs. Bolstered by the payroll flexibility, Cashman swung multiple deadline deals, adding Zack Britton and JA Happ for the pitching staff and Andrew McCutchen for the offense. It was the culmination of team building and a successful display of how younger prospects combined with some higher priced acquisitions could be leveraged into a winning team. If the 2018 Yankees had won the World Series, this article might not even be in existence. For once, the process and the outcomes were both in alignment. But they didn’t win, as we all know.

In Moneyball, Billy Beane gives the quote “Adapt or die.” to reference how the A’s needed to keep up with the big spending clubs. The same principle can be affixed to the Yankees after 2018. To continue to succeed, they needed to learn the right lessons from their 2014 spending spree and apply them to a team that was becoming quite different than the 2017-2018 team. 

2019: A Temporary Reprieve

The Yankees entered the winter of 2018-2019 with a reset luxury tax rate, which allowed them to actually spend some money on free agents. I would argue that this offseason was fine, not overwhelmingly positive but not that bad either. The team showed a willingness to sign players to multi-year deals to fill out depth and after barely spending money in the previous free agent class, pursued a smart strategy of spreading out the wealth. It was the last instance where the team benefited from its cost controlled core and willingness to spend money.

2018-2019 Offseason Free Agent Signings

Yes, they didn’t pursue the mega free agent stars of Bryce Harper and Manny Machado. However, they traded for James Paxton, who was one of the best starters on the market, signed DJ LeMahieu to a deal that worked out shockingly well, and re-signed Britton and Happ to deals that helped their pitching depth. The lineup was pretty set as one of the league’s best and the Yankees made moves to set the pitching staff up well for success (assuming they had Luis Severino, which, well…). There is a direct correlation here to getting under the tax and suddenly spending free agent money ($140 million, their most spent since 2014). Because of their depth signings and the breakout performances of unheralded acquisitions like Luke Voit and Gio Urshela, the Yankees weathered a storm of injuries to play even better than they had the year before, winning 103 games. 

However, the willingness to spend money in the offseason vanished in the regular season. The team refused to make a single acquisition at the trade deadline to bolster a fatigued pitching staff, even as players contributed improbable seasons to keep them afloat. The Next Man Up team suddenly became reliant on the next men up to continue to carry them. This came back to bite them in the playoffs when they faced an Astros team that had superior depth and the Yankees, whose pitching staff was depleted, were forced to start an opener in an elimination game. The offense was dynamite again, but was now being sustained by younger players who were rapidly aging and becoming more expensive or older players who had put up unexpected performances. This worked out in 2019, but the devil’s bargain that they made to gain 99th percentile outcome seasons from Mike Tauchman, Cameron Maybin and Mike Ford would soon come back to bite them. The 2019-2020 offseason was the perfect time for the Yankees to avoid having to pay the piper and bolster this juggernaut. This would protect against obvious regression and to ensure that as the core grew more expensive, the team structure would change to accommodate them. If the Yankees were to remain successful, they would have to recognize that even though the 2019 outcome was solid, the process needed to be changed. Could they make such a distinction and revamp their team building strategy to move away from 2017-2018 and back 2013-2014?

2020: The Big Fish Covers Smaller Flaws

In 2020, the Yankees made possibly the largest upgrade on the free agent market that they had made since 2009, signing Gerrit Cole to a monster nine year, $324 million contract. This was a unique circumstance for the New Yankees - Cole both filled a positional need and the Yankees absolutely loved him (which is about the only way they’ll give out long term deals anymore). Even so, it wasn’t a sure bet that they would sign him, but let’s be thankful they did.

Despite the massive Cole signing, the 2019-2020 offseason was a failure based on the fact that aside from signing Cole and re-signing Gardner, the Yankees did not make a single other personnel move. The desire to promote from within, avoid long term deals (for most players) and build a sustainable core from within had completely handicapped the team from making any other trades or signings. There were two main problems here. First of all, management was still treating this team as a group of young cost controlled players that would be able to compete with little additional help. That simply wasn’t the case, as many of the Baby Bombers were becoming more expensive, which happens in baseball - you can’t keep a group of young players together forever at league minimum salaries. Their team building strategy was stuck in 2017 and 2018. Furthermore, management viewed this team as a 103 win club and not a good team that took advantage of outlier performances to become a great team. They embraced outcome over process and were about to be burned by it, even after adding one of the best pitchers in baseball. 2020 was the single greatest example of each of the Yankees’ two main team building flaws and it continues to hurt them to this day.

Despite this, the Yankees entered 2020 as the American League favorites. The 2020 season was hard to evaluate, given the COVID-19 pandemic which resulted in a delayed and shortened season. It is hard to say, even with the pandemic and season delay, that the Yankees lived up to expectations. They finished with a 33-27 record, placing them in 5th place in the American League. Even though they showed flashes of greatness, starting off 16-6 and going on a 10 game winning streak in September, they were not playing at a consistently high level. For a team that was supposed to be the best in the American League, this was concerning and served as a preview of what was to come. And yet, Brian Cashman again refused to upgrade a struggling team at the deadline, choosing to remain static. The Yankees scored a playoff berth and made it to Game 5 of the ALDS against the Rays, but still came up short in the pitching department and now was dealing with an offense that was clearly regressing. 2020 was the first sign of trouble with this current Yankees team and with the homegrown core getting very expensive, it was time for a change in roster building philosophy. Now that the outcomes were bad, the process would have to change. Right?

2021: The Nadir

2021 was the culmination of years of flawed roster building and spending restraints by the Yankees. The team had become too righty heavy and too unathletic. It was filled with really good hitters who would lose a lot of value if not hitting home runs and that’s exactly what happened in 2021. With the dejuiced ball, many players regressed, including DJ, Gleyber, Frazier, and Gary Sanchez. Others, including Aaron Hicks and Luke Voit, faced injuries. The Yankees assumed that whatever worked for them in 2019 could work in 2021. They were proven very wrong. 

2020-2021 Offseason Free Agent Signings

The Yankees did spend money this winter, most of it going to re-signing their own hitters and importing new pitchers to shore up their pitching staff, albeit ones on short term deals who were major injury risks. Despite this short term method of fixing the rotation, the Yankees pitching staff was incredible in 2021 to cover for a terrible offense, which thereby masked just how flawed this team was. The group was constructed based on the overriding philosophy of bringing up a core and keeping them together while refusing to make significant outside acquisitions or spend money commensurate with the growing salaries of these players. This worked in 2017-2019 when the core was young, cost controlled and performing well. Once the Yankees ran out that window, it was imperative that they change their philosophy to adapt with the changing reality of their situation. Their refusal to do so hindered the team’s performance over the last two seasons.

After half a season of mediocre play, Brian Cashman finally made significant outside acquisitions in Joey Gallo and Anthony Rizzo to shake up the lineup and put this team on a playoff path. The Yankees made the playoffs by one game and were quickly eliminated by the Red Sox, but the second half Yankees were a team that played on a 100 win pace and had to cover up for the flaws of the first half Yankees. If the Yankees had not made those trades, it is safe to say they would have missed the playoffs. We can see that a change in roster construction philosophy paid off for the Yankees in some way. However, the team had been set back so much that this only resulted in a playoff appearance rather than the construction of a championship team. 

2022: What Now?

And now, we enter 2022 having experienced an offseason that was a logical progression of the last two winters. Outside of Gerrit Cole and DJ LeMahieu, two players ownership absolutely loved, the Yankees have not signed any free agents to significant contracts. Not a one. No hitters for the lineup, no relievers for the bullpen or no starters for the rotation. Instead, the Yankees sacrificed assets from the current team to shift around the lineup, which is good in that they are adding new pieces but bad in that they are subtracting current valuable pieces from a win now team. Brian Cashman and Hal Steinbrenner, when asked about the team’s spending a week ago, both said that the Yankees were running out the highest payroll that they had ever fielded and while that’s true, it doesn’t hide the fact that the way this team has constructed its roster is flawed. This isn’t due to the amount of money they are spending, but rather the one track mindset that has gripped management and created inflexibility in how the money is spent. To summarize our transactional journey of the last eight years…

2013-2014: Yankees spend a lot on free agents (GOOD) then don’t do well and are scared off by this (BAD)

2015-2017: Yankees do not spend a lot on free agents (BAD) but make good trades and build a good core (GOOD)

2018-2019: Yankees spend a lot on free agents (GOOD) but don’t make trades or roster moves (BAD)

2020-2022: Yankees sign Gerrit Cole (GOOD) and make some trades (GOOD) but don’t sign literally any major free agent (BAD)

You can see that the Yankees refuse to operate with more than one goal in mind. Look at the Dodgers, the model of success. They sign free agents, develop players and make trades. They do everything and thus are successful with money. The Yankees can never be the Dodgers as long as they operate with a one-track mind. Hal Steinbrenner seems like a kid in a candy store, who gets distracted by the new shiny object. One day it’s free agency, then it’s rebuilding, then it’s saving money. The minute Cashman proved he could be successful building a team with a lower payroll was the beginning of the end for the Yankees as big spenders for long-term deals. The takeaway isn’t that the Yankees are cheap. It’s that they’re not versatile or adaptable to the current constructs of their team. They’re fighting yesterday’s war and still suffering for it. Additionally, the team focuses much more on outcomes rather than processes. The 2014 Yankees win 84 games after a free agency splurge? No more free agent splurges. Aaron Hicks and Luis Severino get injured after extensions? No more extensions. The 2019 Yankees bench players overperform in an unprecedented way? No need to improve the current roster. It’s aggravating for anyone who thinks about baseball analytically and I would argue that these two decision making flaws are the root causes of our frustrations.

Will this change anytime soon? I hope so, but I would have hoped that the change would come this winter in the ultimate win now year for the Yankees. Every year that the Yankees don’t win with their current core is another year that makes it harder to win. The Volpe/Peraza/Medina/Dominguez core isn’t guaranteed to be successful and the Yankees are in for a cruel awakening if they think success is guaranteed for this group. Lightning rarely strikes twice, as the team learned after the miracle season of 2019. The Yankees shook up their lineup this winter, but was it to the extent necessary? Are they making the same mistake with a successful pitching staff that they have before, assuming that positive outcomes mean that no change is necessary? For a team that is spending a massive amount of money on its payroll, there are far too many questions with uncertain answers.

To continue to be successful, the Yankees will need to employ multiple roster building strategies at once, flex their financial muscle in ways that benefit the team in the short and long term, and use their farm system to pursue upgrades. They need to sign their current players to extensions, upgrade on the markets with free agents, promote prospects when they are ready and trade some to acquire MLB talent that can be less expensive than your average free agent. This may sound simple and the Yankees have done some of each of these things at different points in the recent past. To really achieve their full potential and become a Dodgers-like organization, they need to put outcomes aside, focus on process and remain versatile with their roster building strategies. Last fall, Aaron Boone opined that the rest of the league “had caught up to the Yankees”. If the Yankees don’t want to fall farther behind, they need to change the way they operate and how they spend their money. You don’t have to have a $250 million payroll to win, but if you do, you better be using it correctly.