Challenges For The Next Decade

I apologize for being absent for the last couple of weeks. A family accident (side note, my father is actually having Tommy John surgery) and a new job ate up a lot of my time. But I’m back.

SB Nation is doing a very cool series of posts detailing what issues the various sports leagues will have to confront over the next decade. While they have not yet covered baseball, Mike Fischer of of In Lou We Trust has a great post about the challenges that the New Jersey Devils will face over the next 10 years.

We’ll remember the 1990s for the dynasty, the exciting, highly respected players, and for the reemergence of a dominant Yankee team. We’ll probably in the end remember the 2000s for playoff failures more than anything. 2009 felt like the beginning of something new, and ended in the best possible way. But over the next ten years, what are the big picture challenges that the Yankees will face? I’ve got four.

#1 CBA Negotiations, Salary Caps, and Populist Backlash

The Yankees began really dramatically spending following the 2003 season. While they had the biggest payroll in baseball before that, they began dwarfing even the Red Sox and Angels starting in 2004. Since then, other teams have spent quite a bit more money, but the Yankees are still the only team paying the luxury tax.

From 2004 until today, there hasn’t been very much real backlash against the Yankees. Every once in awhile, John Henry would talk about the need for a salary cap, or Jeff Loria would pretend that he doesn’t have the money to compete, but not a lot was said on the issue. However, that was all happening while the Yankees weren’t winning World Series. I suspect that if the team pulls off a 2010 or 2011 (or both) victory, we’ll start to hear much heavier chatter about a much stronger salary cap or luxury tax.

And honestly, that chatter is probably right. Yes, the Yankees are great for baseball, have spent a lot of money to get where they are, and mostly get past the point of diminishing returns in the free agent markets (see 82 million for A.J. Burnett). But the Yankees are on a budget right now, and making a ton of money. If the Steinbrenners relaxed that budget just a bit, the team could probably spent 250 million on payroll without losing money; maybe more. Going forward their revenue stands only to grow significantly, so the payroll would probably get bigger. If the Yankees are finally spending their money wisely (more on that later), they are at a major competitive advantage. This isn’t 1950: baseball can’t take one team dominating the league permanently. I think the eventual result will be a “soft cap” – basically a stronger luxury tax.

The Yankees will need to adjust to this new climate. At what point will a cap kick in? Will they be able to function without a huge monetary advantage over their opponents? If Brian Cashman has the same resources as Theo Epstein, can be be smarter? These are huge questions to answer.

#2 Letting the 1990s go

Derek Jeter, Andy Pettitte, Jorge Posada, and Mariano Rivera have a truly outstanding place in Yankee history carved out for them. All deserve to have their numbers retired, and all but Andy deserve enshrinement in Cooperstown. While they are all still performing at a high level, the day that they start to decline will be a sad one. We already saw a preview of this when Bernie Williams experienced his three or four season long decline.

The Yankees kept playing and bringing back Bernie Williams out of nostalgia. He wasn’t a valuable player for the last three or four years of his deal, but they treated him as one. Most of this was Joe Torre’s typical brand of nepostism, but it was also a team-wide unwillingness to accept that sometimes you have to give up your heroes and let new guys take over. And sometimes that separation isn’t pretty.

An early test of this may come after the 2010 season. Derek Jeter’s contract will be up. He will be about to turn 37 years old, and still playing shortstop. While 2009 was a great defensive year for Jeter, chances are he’ll be playing a pretty bad shortstop going forward. He’ll also want a huge contract despite his advanced age, probably valued at 20 million per year.

I’m sorry, but Derek Jeter age 37 is not a 20 million dollar per year player. Even if he has a shot at a 2009-like fantastic year, he’ll be a tremendous injury risk. He may not even be able to be a shortstop. The Yankees will be challenged to put team-building ahead of nostalgia. How much do they pay him? What position will he play? At what point are they willing to walk away? Mariano Rivera is another tough case, but I think that Derek Jeter’s position is tougher. Jorge Posada should go quietly, and Andy Pettitte seems to be interested in retiring on his own.

#3 Managing the huge contract

In many ways the Yankees are very lucky to have the 90s-four about to be free agents. While still universally very effective, the big four are about to let the Yankees free of enormous financial commmitments. Except for some Jason Giambi moments, the Yankees have mostly avoided large albatross contracts despite their aging lineup. They’ve narrowly dodged a lot of landmines.

The next mine to dodge is a really big one though. Alex Rodriguez is owed 32 million per season for the beginning part of this decade. He will continue to be the highest paid player on the team while he turns 40. His massive deal runs through 2017 – longer than C.C. Sabathia and Mark Teixeira, both of whom are still on the right side of 30.

The Yankees really boxed themselves in to a bad situation here. While they can whether a bad contract, even the Yankees don’t have the financial resources to whether a 32 million dollar albatross without major ramifications. Even though he will be 35 in the first season of the decade, the 2010s Yankees will be defined by their star slugger.

For what its worth, I think that Arod is a reasonably good bet going forward. He’s been mostly hampered by a single reoccuring injury, which seems to have been fixed pretty well. Even while suffering from surgery hangover, Arod was still the best player at his position. He certainly doesn’t look 35 when healthy. And nor should he – Alex Rodriguez is one of the most athletic players in the game. That ages well.

The Big Question

This isn’t a challenge to deal with, but rather a maturing question that the team has to deal with. Can they expect to perpetually contend? Will the Yankees ever have to rebuild? At some point, will expectations have to be reduced?

I think that as long as the current salary cap situation remains stable, the Yankees can and should try to build a team set upon perpetual contention. I think that the path that Brian Cashman and Joe Girardi are on is much different from the late-Torre years. Looking toward perpetual contention requires a long-term plan that is prioritized over short-term decisions. What does this mean?

It means not trading Phil Hughes, Ian Kennedy, and Melky Cabrera for Johan Santana, whose production can be equalled a year later with C.C. Sabathia. This move made the Yankees signicantly weaker in 2008, and may have cost them a playoff spot. However, it paid off in 2009, and with the additions of Javier Vazquez and Curtis Granderson it will eventually pay off over the next few seasons. They sacrificed 2008 for 2009-2013 and beyond.

These kinds of draconian decisions have to be made. Perpetual competition requires a mindset that a George Steinbrenner-led team could never stomach. Luckily, his sons have proven to be all business, and Brian Cashman has shown his genius since George faded into the background. But, as I discussed above, not all decisions are easy. Derek Jeter is not going to get a 20 million dollar deal from any of the 29 other clubs. The Yankees shouldn’t give him one either. They shouldn’t keep Mariano and Posada along a day longer than they are useful to the team, and they shouldn’t plan on holding the “we can always spend 250 million” card for too long. Otherwise, some time before the next decade is over, we fans will end up watching just another ordinary baseball team.

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