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197 or bust: Why the Yankees can't afford to break the bank this time

Another season of luxury tax won't just affect 2018 but many years beyond

Even after the splashy addition of Giancarlo Stanton in December, some Yankees fans would love to see their favorite team also trade for Manny Machado, or make a splashy free agent signing for either a marquee pitcher or a bat that fits the minimal lineup needs. Perhaps someone like Yu Darvish, who has been the source of multiple rumors connected to the Yankees over the last week.

Trust me, the Yankees would love to do that too, and in an era gone by, those moves may have already been made. But the Yankees want to get underneath the MLB Competitive Balance Tax threshold of $197 million this season, and within that, the short-term may take precedent over the longer-term for right now in a different way, because the key number behind the reasoning may not be $197 million. Instead, it may be one or all of 2.053, 1.170, 1.086, and 1.051.

Those are, respectively, the Major League service times (in years/days) of Greg Bird, Luis Severino, Gary Sanchez and Aaron Judge as of the end of the 2017 season -- and, if you know that 3.000 is the magic number for a player reaching salary arbitration and 2.120 or so is the Super Two cutoff where players become arbitration-eligible without reaching three full years, then you know that in the next three years, the Yankees' latest core four is about to become very expensive.

So yes, while the Yankees' quest to beat 197 is certainly buoyed in part by the physical dollars they will save in fiscal year 2018, it's almost certainly, perhaps equally, in part about both the physical and theoretical dollars they know they're going to have to spend in subsequent ones.

In short: if not now, when, if ever?

As it stands for 2018, even if the Yankees do not make another deal that affects the Major League roster, their Opening Day payroll for luxury tax purposes is already estimated at somewhere around $175 million, leaving very little wiggle room if something is needed during the season.

Right now, the Yankees have just under $147 million committed to 15 players -- $117.7 million for the seven under iron-clad contract, and a reported $29.2525 million for the eight who settled in arbitration -- plus $6 million in "dead" money for Brian McCann and Chase Headley. Adding in MLB minimum or slightly better salaries for the other 10 players who must fill out the roster at any time (let's call that $6 million for sake of easy math) and the Yankees' share of league-wide player benefits (just over $14 million, per the AP), and we're at $173 million, and after adding in an estimation for the few million's worth of salary for the 15 other players who will live on the 40-man roster, the Yankees maybe have about $20 million in their slush fund.

Would it help the Yankees, in both the short and long-terms, if they added Machado, or someone like Yu Darvish or Mike Moustakas that's among the elite available? Of course, and with that $20 million or so theoretically to spend, it's easy to just say "go out and spend it."

But if the Yankees keep adding, spend even $197,000,001 this year, and end up paying luxury tax, they would not only do so at their current 50 percent rate, but also would fail to reset that rate, which goes down to 20 percent for first-time offenders -- and in addition, depending on how much they spend, they could put themselves at risk of losing positioning in future amateur drafts, as well.  

Following 2018, there is some "relief" to be had for the salary-conscious, as the Yankees will clear anywhere from $25-$40 million off the books next winter; CC Sabathia ($10 million AAV), David Robertson ($11.5mm AAV), and Adam Warren (reported $3.315mm in arbitration) all come off the books for sure, Brett Gardner's club option will save them either $500K (if the option is exercised) or $13mm (if it isn't), and it's possible others are non-tendered, too (for sake of names, Austin Romine and Chasen Shreve are two arbitration-eligible players who were rumored as possible candidates to be non-tendered this winter).

It's also true that next year's tax threshold jumps by $9 million, from $197 million in 2018 to $206 million for 2019, and even further, it's possible that getting another year deeper into Jacoby Ellsbury's deal could make it slightly easier to deal him and save even more, but it's not necessarily true that the Yankees have that $40 million to spend, though.

Looking solely at the eight arbitration-eligibles, Warren is the only one that comes off the books, and even if the Yankees non-tender one or two players -- like, say, Romine and Shreve, who are reportedly making just under $2 million this year combined -- there's roughly $5 million in savings there. However, given that the other five in the group are Sonny Gray, Didi Gregorius, Dellin Betances, Aaron Hicks, and Tommy Kahnle, that $5 million in savings and then some could be gone in a hurry. Gregorius and Betances alone got more than $5 million actual dollars' worth of raises this season, so even an equivalent dollar-for-dollar match wipes out that savings.

Then, there's those two service time numbers up above, for Bird and Severino. Both will make close to the MLB minimum in 2018, but if Bird can stay healthy and extrapolate his 2015 numbers into a full season at even a 75th-percentile rate, you're looking at a lefty-hitting first baseman who is coming off a .260-30-100 season, and that could add another $2-$3 million to the payroll.

Severino, meanwhile, fell just two days shy of having two full years of service time when all shook out this winter, but he's going to be arbitration-eligible next winter anywhere under the Super Two rule, and he's likely in line for a large raise. For reference, Astros right-hander Collin McHugh had a 3.71 ERA and 505 strikeouts in 543 innings over his three pre-arbitration seasons in Houston and got $3.85 million in his first arbitration trip last year, so it's not out of the realm of possibility that Severino -- who has a 3.58 ERA and 352 strikeouts in 326 2/3 Major League innings so far -- gets more if he backs up last year's Cy Young-caliber season with a second straight ace-like campaign.

And, on top of all of that, the above doesn't take into account two other facts: The Yankees still need to replace Sabathia, Robertson, Warren, Gardner, and anyone else they cut ties with somehow (which, to be fair, could be accomplished for a fraction of the price given the Yankees' current prospect depth), and the 2019 free agent class as of now includes not only Machado, but also guys named Keuchel, Donaldson, and Harper -- and, depending on how options or opt-outs are used, potentially guys named Kershaw, Bumgarner, and Sale, too.

Add in Judge and Sanchez becoming arbitration-eligible after 2019 and a smaller increase in tax threshold, and the Yankees are looking at a crunch. If they don't get under the limit this year, they'll struggle to do it next year and have, at worst, a similar struggle in 2020.

The collective of Ronald Torreyes, Tyler Wade, Miguel Andujar, any and all Jace Peterson-types the Yankees eventually add, and even Gleyber Torres might not be the sexiest options for the two open infield spots in 2018, nor might it be optimal even to have Luis Cessa, Domingo German or Chance Adams as the "sixth" starter next year. But for the long-term sake of the Yankees, that may be the best route to take in an attempt to accomplish both their on-field and in-ledger goals.