Yankees’ Struggles Aren’t Fault of CBA

While everyone else basks in the glow of continued labor peace and begins to explore the minutia of the latest pact between the league and its players, the Yankees remain committed to a PR campaign against the collective bargaining agreement and its (negative) influence on the team’s ability to compete. The latest critique comes courtesy New York Yankees general manager Brian Cashman in a piece from George King III of the New York Post.

We’ll get to that in a moment. Before we do, though, we should acknowledge that, yes, the Yankees pay a substantial amount both in revenue sharing and luxury tax. Yankees president Randy Levine indicated that the former obligation was $90 million in 2015 — from a combination both of the standard 34% revenue sharing and also a performance factor, explained in greater depth here by Wendy Thurm. As a result of these obligations, the Yankees are giving more money back to small-market teams than any other club in baseball. Add in more than $300 million in luxury-tax/competitive-balance penalties over the last decade, and it’s pretty easy to see the Yankees’ grounds for dissent.

That’s not the real cause of the Yankees’ failure to dominate in recent seasons, however. Rather, poor spending and failed player development have been the team’s main issues.

But back to Cashman, for a moment. In his recent comments, he was unambiguous about the effect that the last few CBAs have had on his club.

“The CBA is going to affect us in the long term,” general manager Brian Cashman said Tuesday at Yankees scout Cesar Presbott’s Thanksgiving turkey giveaway in The Bronx. “It’s already crippled us in the short term. Exhibit A is our free agency last year and a lot of the international markets I’ve been taken out of.

“The previous CBAs have really hindered us, so I think the next one is something we’re clearly going to be interested in on how it will impact us over the entire course of the term of the contract. The previous ones have impacted us in a bad way.”

As noted above, the Yankees have been compelled to contribute quite a bit in revenue sharing, etc. — ultimately paying out probably more than a billion dollars directly to their competitors over the last decade. It’s not that simple, though.

Cashman claims Exhibit A is free agency last year. I propose an alternate Exhibit A.

We could add Mike Trout to the Yankees roster and they still wouldn’t be climb to first place in this chart. New York has received about as much production over the past five years from players age 27 or younger as Mike Trout creates in one season — and it took them more than 5,000 plate appearances to get there. The Yankees have had incredibly poor results drafting and signing amateur position players and developing them into big leaguers. From 2000 to 2009, the only position player drafted and signed in the first five rounds by the Yankees to then record a WAR greater than 3.0 is Brett Gardner.

This isn’t a new phenomenon for the Yankees, who have long relied on veterans, but it’s worse than it has been a long while.

It’s true that New York hasn’t necessarily given a lot of playing time to young players over the past 20 years. It’s also true, however, that they used to get a little more bang for their buck. And what’s even worse for the Yankees is that the young demographic on whom they’ve been unable to rely has only proven to become more productive for the rest of the league.

The rest of baseball has gotten better results by giving more time to young players, while the Yankees have gone the opposite direction. This isn’t the fault of the CBA. Quite the opposite, in fact: the Yankees have very much benefited from the qualifying-offer system, as well as the draft compensation that preceded it. From 2000 through 2009, the Yankees made 15 first-round and supplemental-round picks, one of the top marks in baseball. Since the installation of the current qualifying-offer system, the Yankees have been one of its major benefactors, as the myth of the qualifying offer as a benefit for small-market franchises has proven to be just that: a myth.

The problem for the Yankees is that they haven’t been able to capitalize on that particular gift from the CBA. They’ve done okay while drafting in the first round, hitting on Joba Chamberlain, Phil Hughes and Ian Kennedy. A 20% success rate (defined for our purposes here as a bWAR of 3.0 or greater) is roughly average for players selected 20th or later (24%). Meanwhile, though, New York has found just three “successful” players in rounds 2 through 5 over that same interval. League average is five. That two of those successes are George Kontos and Adam Warren hasn’t helped. The CBA has benefited the Yankees in the draft by giving them more picks, but they haven’t been able to convert on those or — any other high picks — in the last decade.

Cashman is correct that, internationally, his bonuses have been suppressed the last two years, but that’s only because he exploited a loophole in the CBA. Using the leverage he possesses as the head of a major-market team with tons of cash at its disposal, he signed around $20 million worth of prospects two international cycles ago. The CBA benefited the Yankees because he was able to lock in a ton of good, young players while most small-market teams were unable to keep pace with his spending. The same strategy has been employed by other big-market teams (like the Dodgers and Red Sox), while only a few small-market teams have followed. In the years leading up to the current pool rules, the Yankees sometimes spent a decent amount, and sometimes they didn’t spend much at all. The previous CBA didn’t prohibit massive spending on international amateurs and the Yankees weren’t exactly taking advantage.

Then there’s the competitive-balance/luxury-tax that they Yankees have had to pay. Cashman and the Yankees would certainly argue that it has curbed spending, and indeed it has, but the soft cap has served as a de facto cap for their main financial rivals as well — which, one could argue, has actually helped the Yankees in their pursuit of free agents, given their financial might and willingness to exceed the luxury-tax threshold. The Boston Red Sox have skirted around the cap a few times but don’t go over. The Angels haven’t gone over in years. Mike Ilitch all but said he was actively dissuaded from going over the cap. Also tied into this fact was that the Yankees spent several offseasons preparing to go under the cap in 2014 in an effort to save themselves millions of dollars — only to then blow apart that plan after an unsuccessful season, signing Carlos Beltran, Jacoby Ellsbury, Brian McCann and Masahiro Tanaka.

As for staying out of free agency this past season, that was much less the product of a competitive-balance tax and much more the product of having committed $75 million to the aforementioned five players last year — along with the ill-advised Alex Rodriguez extension that stretched the club’s budget thin. Given the Yankees’s considerable reliance on aging free agents, it could be further argued that the competitive-balance tax has actually helped them keep their payments down, as the free agents they sign are getting paid less than what they would in a taxless system.

The Yankees can point to the revenue-sharing and competitive-balance checks they pay out and argue that the CBA has hurt them. Meanwhile, though, they’ve reaped big benefits from the qualifying-offer system, used their financial might on the international market, and benefited from the curbed spending of other clubs attempting to stay below the luxury-tax threshold. The game has gotten younger and the Yankees have not. They continually try to buy wins at the free-agent level despite the increasing expense of those wins — even as younger, cheaper players have gotten more playing time and been more productive. The Yankees have hit on a couple pitchers in the draft, but their lack of development when it comes to young players — and their failed/abandoned attempt to get under the competitive-balance tax — has been what’s cost them, not the CBA.