The Yankees Value Trades Over Free Agency: Is It Working?

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With the recent Edwin Encarnación trade, the rich are getting richer. It is a tad bit funny to write that opening line because the Yankees sparingly flex their financial might nowadays. As I wrote in my Dallas Keuchel piece, the team has undergone a paradigm shift in their approach to player acquisitions. This strategy is all in the name of financial flexibility and controlled spending (and yes, putting money in Hal’s pockets).

From the outside looking in, the organization is more apt to acquire contracts of known value rather than negotiate a value. The Yankees clear preference is to pursue players with prospect capital rather than financial capital. This is a topic of major debate amongst fans. There are many accusations of the team being cheap. After all, the franchise has an estimated value over $4 billion and earns considerable annual profits. But what if the draft, development and trade approach is the more effective route to not only building a contender, but a potential dynasty?

The Mandate Heard ‘Round The World

I’m a finance geek. I guess I always have been. That’s my background. Budgets matter. Balance sheets matter. I just feel that if you do well on the player development side, and you have a good farm system, you don’t need a $220 million payroll. You don’t. You can field every bit as good a team with young talent.

Hal Steinbrenner

This quote may induce nightmares for some. It was the official declaration that the franchise was no longer playing in the deep end of the free agent spending pool. The underlying philosophy is to develop enough young players that could either establish the new core or be trade bait to supplement that core. Here is a list of premiere free agents the team has passed on since 2013:

  • Zack Greinke
  • Josh Hamilton
  • Robinson Cano
  • Shin-Soo Choo
  • Max Scherzer
  • Jon Lester
  • Nelson Cruz
  • David Price
  • Justin Upton
  • Ben Zobrist
  • Daniel Murphy
  • Justin Turner
  • Charlie Morton
  • Patrick Corbin
  • Manny Machado
  • Bryce Harper
  • Dallas Keuchel

Wow. There are multiple World Series champions on this list. It is safe to say if the Yankees signed some of these players they would have been in the hunt for a title well before 2017. The counterpoint is you are potentially putting your franchise’s long term health at risk by signing older and more expensive players to a team that doesn’t have a young, productive core. This is especially true from 2013 to 2017. The Yankees consciously made the decision to start from the bottom up and create a new generation of young talent. Fans believed the team would then supplement these players with big time free agents. The organization had different plans.

Trades Are The Name Of The Game

Drafting, development and trades have brought the Yankees back to prominence. Since 2015, the Yankees have acquired these players via trade:

  • Aroldis Chapman
  • Chad Green
  • Starlin Castro
  • Aaron Hicks
  • Chasen Shreve
  • Dillon Tate
  • Clint Frazier
  • Justus Sheffield
  • Gleyber Torres
  • Giancarlo Stanton
  • Sonny Gray
  • Todd Frazier
  • David Robertson
  • Tommy Kahnle
  • Luke Voit
  • J.A. Happ
  • Zack Britton
  • James Paxton
  • Edwin Encarnación

This list is impressive as hell. Some of these players are foundational pieces at relatively low cost. These moves accelerated the “rebuild” for the franchise and immediately put the team in a position to contend.

In continuing with this idea, the Yankees continue to develop minor league players with the intent of bringing in more high end major leaguers. In his article discussing the trade for Encarnación, Marc Carig writes:

But the Yankees have also drawn rave reviews from rival execs for their ability to develop tradeable arms on the farm. Specifically, one rival executive lauded the Yankees for seemingly churning out pitchers with elite fastballs at the lower levels of the minors. Velocity is a weapon that has become increasingly coveted. If the Yankees are as good at unlocking it as some within the game believe them to be, they’re essentially printing currency to be used on the trade market.

Marc Carig

Attractive, young and cost-controlled player assets are the new currency the Yankees want to be flush in. In the trade market, the Yankees can evaluate the current production of a player against his existing contract. Free agent signings are based on future projections and how much money you are willing to spend for that projection. Recent news sends a clear message which side the Yankees fall on.

Keuchel vs. Encarnación

The Yankees need starting pitching. I know it. You know it. Brian Cashman knows it. Hal Steinbrenner knows it. There was a pretty good pitcher on the market available for just dollars. Knowing they had some wiggle room before hitting the next luxury tax threshold, the team held fast to their offer of a prorated 11 million dollars. Of course, Dallas Keuchel went with the higher offer.

The Yankees have an insane offense. I know it. You know it. Brian Cashman knows it. Hal Steinbrenner knows it. This fact did not preclude the team from acquiring the American League leader in home runs. They don’t need Edwin Encarnación, but why turn down a chance to get a premiere hitter for just 3 million bucks. As Jack Curry tweets:

The Yankees know they’re going to get elite offensive production at a cheap cost. They aren’t as sure what they will get from Keuchel especially considering the analytics department being skeptical of him moving forward. The front office chose the trade route to accentuate a strength rather than sign a player that addresses a clear weakness because of 8 million dollars. Nothing captures this new organizational paradigm shift than these two player personnel moves.

Maybe It’s Working?

The original intent of this post was to simply highlight the Yankees recent history of favoring the trade market over the free agent market. In writing it, I began to realize that my ongoing belief that the team is cheap may not be true. The question we can ask is what is more valuable? Is it cash currency or is it really player currency? The industry is currently not interested in handing out appropriate free agent contracts. This is obviously rooted in labor suppression and maximizing profits for owners. With that said, the most effective way to supplement a contender is by offering attractive prospects to teams looking to rebuild.

The Yankees are excelling at this. They’ve identified the leanings of the industry and taken full advantage. This strategy avoided a tear down and immediately made the team favorites to win the World Series. The new paradigm is working really well. It’s funny to say this, but we probably wouldn’t be clamoring for the organization to sign elite free agents if they spent the last six years signing every top free agent to bloated contracts. There is certainly room to criticize recent decisions made by the team. There is also room to give credit where it is due.


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  1. RetroRob

    Building a winning team requires developing talent, trading for talent, signing free agents. No team should ignore any of those three talent streams. The Yankees haven’t, although they have adjusted the mix, and that’s being driven by the CBA and the agreement by all MLB teams to work with the cap. MLB has a cap, which doesn’t help a team like the Yankees. That said, they clearly are directing their resources elsewhere, but signing the big-name free agents is no longer a given.

  2. Elloree

    Of course what’s missing is a list of free agents the Yankees DID sign over this period:

    Stephen Drew

    I’m sure there are many I’m missing (does the Tulo signing count?), but it’s the last name that counts the most. It was a bad signing at the time, and has gotten worse. The Headley signing wasn’t as bad, and he filled a position of need, but they way overpaid, and one wouldn’t call it a “win.” Seveb of the active squad of this year’s team came to the Yankees as free agents, but only Tanaka, who is a special case, was a flashy signing, and only Happ might be called an overpay. And let me state the obvious: the Yanks clearly prefer to re-sign their own players as free agents.

    Years ago Bill James pointed out that signing big name free agents in their late 20’s is a justifiable strategy, but when it backfires, it can crush a team. The Ellsbury signing hardly crushed them, but it — finally!–taught Hal a lesson he has clearly over learned.

    Remember, too, until a few years ago, the Yankes were TERRIBLE at developing young talent for most of this century!

    When it comes to pitching, their philosophy seems to be to get the peak years out of young flame throwers, then dump them and move on.

    • RetroRob

      Nah. They’ve shifted strategy. It’s as simple as that. Previously, they could spend as much as they wanted and focused their resources on known, MLB talent. They have now accepted the cap restrictions in the CBA, so that’s forced them to build more from within and reduce big-name free agent signings.

  3. Very well written and argued piece, but I disagree strongly with the conclusion. Signing the best free agents would not preclude the Yankees from also making trades, drafting well and signing international talent. This is especially true because the Yankees’ level of investment in player expense relative to revenue is not only at recent franchise lows, but also ranks near the bottom of MLB (see here: In other words, the Yankees have more than enough financial resources to sign high profile free agents without compromising their long-term viability.

    The perfect illustration is the Yankees’ failure to sign Max Scherzer. When Scherzer was a free agent he was widely believed to be one of the top pitchers in the game, and his future projections were strong. At that moment, the Yankees already had the following players in their system: Judge, Andujar, Sanchez, Severino and Betances, among others. In fact, most of these players were accumulated during a time when the Yankees were still spending relatively higher sums. Similarly, signing Scherzer wouldn’t have precluded the Hicks trade or the Didi trade or the Chapman trade, for example. Scherzer was the perfect free agent piece to add to the team, but the Yankees’ didn’t make an offer just so they could lower payroll to relative levels well below the MLB average.

    And, it’s not like the Yankees’ cost cutting has only manifest with regard to long-term free agent signings. The team also had an opportunity to first claim Verlander off waivers and then make a trade in which the Tigers would pick up salary, but, again, they declined. Put Verlander on the Yankees instead of the Astros and consider how 2017, 2018 and this year would turn out.

    The argument against free agent spending centers around not hampering the future with massive contracts that will inevitably become liabilities, but that ignores the Yankees reality and the fact that elite free agent contracts often work out well for the team. Not only does having by far the most resources in the game allow the Yankees to absorb mistakes, but it gives them an advantage in pursuing the very best (and least risky) players. Instead, the Yankees have prioritized profit margin and allowed several opportunities to win a World Series pass them by.

    It’s fine to give Cashman credit for making a lot of great trades, but that should be a tool the Yankees use to augment their financial advantage, not replace it. If the Yankees are still truly committed to winning championships, they would pursue every avenue at their disposal, but right now, their main concern seems to be maintaining a budget.

    • Randy

      It precludes making those moves if you want to extend the players you mentioned. We’re also currently experiencing a season in which they survived an obscene amount of injuries because of depth, flexibility and versatility. So while I agree not going after Scherzer was a mistake, refraining from some other signings has proven to be pretty smart. Would you be thrilled with Choo blocking Judge or adding Price to the long list of inconsistent starters? The Yankees have built a pretty impressive machine avoiding those contracts.

      • Except that’s not true. The need to extend existing players does not require abstention from the free agent market (see here: Also, the Yankees persevered not because of financial flexibility, but because Cashman won the lottery with the likes Maybin and Urshela, Sanchez was a beast and they made a good free agent signing in LeMahieu. Had the Yankees signed Bryce Harper instead of Brett Gardner, for example, in addition to every other move they made, the team would not have been more vulnerable to injury. Free agents like Choo are not elite, so that’s not an apt comparison. As for Price, yes, I wouldn’t mind having him (and his ERA+ of 121 since joining Boston) instead of who has taken his place over the last four years (Gray, Happ, etc.).

        • Randy

          If they sign a bunch of free agents over the years they’re not extending all of these young guys. They went against their age old policy of not extending because they didn’t jump into the deep end of the pool. You may not like that decision, but that is clearly the strategy they’ve taken on.

          They didn’t persevere. They had a plan and executed it aggressively. Financial flexibility plays a huge role in that. It got us DJLM, Ottavino, Britton, etc. And they didn’t hit the lottery per se. They thoroughly evaluated these guys and saw something they could develop and then reap the benefits. Maybin is on record saying other teams wanted him to hit on the ground while the Yankees emphasized driving the ball in the air. There is a reason they’re excelling here. It didn’t just happen out of nowhere.

          And if they signed Harper, they’re not making many other moves. They do have a budget despite their riches.

          Choo was a major free agent at the time. You can’t look at that from a 2019 perspective. He was obviously well thought of at the time because he got a great deal. I feel pretty confident saying a bunch of people would be citing Price’s contract every time his elbow barked or he struggled. It would be Happ times ten.

          • RetroRob

            Randy, good article. I agree with William’s overall point (the Yankees can spend more and should restrict their approach of using their financial advantage), but I also recognize that we’re not going to have all these great young players and guess which free agents are the right ones. The truth is probably somewhere between your point and William’s.

          • Yes, the Yankees do have a budget, but the question is whether it is set appropriately. I think the available data shows they could still sign top free agents and still have the “flexibility” to resign their homegrown stars and pursue more value-oriented additions. The Yankees have financial flexibility not because they spend wisely, but because their revenues are massive (and, I would add, that is aided by a whole lot of corporate welfare premised on the notion that baseball is a public good). The bottom line is the Yankees could easily sign the Harpers of the world and still do many of things you noted, and do so in a fiscally responsible (but less profitable) way. That is, after all, what they did from about 1993 to 2012, and the results, on both the field and in the board room, were pretty darn good.

    • Randy

      And thank you for the compliment. I appreciate it.

    • RetroRob

      William, I agree (mostly) with what you wrote. It basically echos what I said above. The Yankees have accepted the luxury tax cap. It seems all owners have. That restricts them from using their greatest weapon: money. They have redirected it elsewhere in many cases, but they have definitely pulled back on big free-agent signings. That’s unfortunate, and I don’t see it changing.

  4. This Year

    Cash currency and player currency are not mutually exclusive. I am not a DK fan on any level. But the glaring weakness of the team at this juncture was and is the lack of starting pitching, and signing DK was an absolute no-brainer as a complement to the new player development strategy– to fill a hole, so to speak. Because what is the alternative? Trade an established major league talent such as Clint Frazier? Trade the remarkable Deivi Garcia? I guess what I am saying is that whether player currency or cash currency is more important depends on the context of here and now. Here and now, 8m is far “cheaper” than losing valuable player commodities such as these imo.

    • I would have signed DK too. Hardly any risk on a less than 1 year contract and he’s a solid #3 starter that will give you innings.

      Cashman was interviewed by Francessa the other day and the impression I got was that the Yankees weren’t aware of how much they were being outbid by. They weren’t told anything like $2 million more would land Keuchel. They were just told they were outbid and there wasn’t much further dialogue from the player’s rep. It almost seemed from the interview that Cashman was disappointed by how it worked out. There are a lot of moving parts there though. For all we know, Keuchel did not want to sign with the Yankees and was just using them as negotiating leverage with the Braves. But that said, if Cashman was given the opportunity to land DK for $2 million more I think he should have done it.

    • Randy

      I don’t think context of the here and now has anything to do with it. The Yankees were clearly not sold on DK because of their analytics. If the numbers fell in line with the players they like he would be a Yankee. That decision is pretty clear. The team is really good at identifying which young guys to keep and which ones to trade. Can you think of one traded prospect that you actually miss? Maybe they het a pitcher without trading Frazier or Garcia. We don’t actually know what prospects other teams really like. Maybe they want a bunch of low A flame throwers. We’re just guessing on who it could be.

      • Well that’s a fair point. If they didn’t want him then they didn’t want him. But given the track record, their organizational needs, and the risk, it seemed like a no brainer to sign him. In that regard, I think the context matters because the narrative has been that they were too cheap to come up $1.5 million. I don’t think they were necessarily aware how close they were.

      • This Year

        I don’t like DK any more than the Yankees’ analytics people– and I wholeheartedly support the player development mode the Yankees have adopted the last decade or so. I am the biggest prospect hugger ever. But my point of “here and now” is that DK was the best alternative which presented itself at a time of dire need– where a hole had developed in an otherwise excellently constructed team. THEN is the time for using the cash currency imo, especially when the team spends a drastically reduced fraction of overall annual revenue on payroll than 10-15 years ago. Your worthy predecessor, Mr. Axisa, concurs fwiw. That said, as long as Clint and Deivi are not sacrificed on Hal’s financial altar, I am ok with this fun as hell team.

        • Randy

          That’s great that my “worthy predecessor” Axisa concurs, but the Yankees clearly didn’t. They weren’t in love with him. They have data to back up their evaluation. We’ll see if it was the right decision. They would rather go the trade route to get someone they believe on more. Maybe we should trust them.

          • This Year

            A brief marriage of need does not require love imo. In any case, my reference to Mike was meant as a high compliment to your and your colleagues’ writing– and the site in general. Sorry if I expressed it awkwardly. In any case, we will agree to disagree– without being disagreeable. Thanks for the post.

          • Randy

            It’s all good man. I appreciate the compliment and I humbly thank you for reading. And I like your brief marriage line. I personally agree with you. It’s just clear the Yankees don’t. They really believe in their analytics (with good reason) and are sticking to their guns. It’s frustrating for most of us, but in the big picture it’s pretty effective.

  5. Coolerking101

    Agreed that calling the Yankees “cheap” is just no true. They continue to have a top end payroll every year.

    HOWEVER, pointing out the fact the Yankees are being far more greedy than before or that money is driving decisions more than ever is completely fair. I don’t need to go over the numbers as I’m sure most fans know, but the Yankee payroll is essentially where it was more than a decade ago. During the same time period, the rest of the league’s payroll has skyrocketed. Moreover, the % of money the Yanks put towards payroll is just a fraction of what it used to be. That money is, quite obviously, going into the pocket of ownership.

    I, for one, don’t believe they passed on Corbin or Keuchel for any reason beyond money. Cashman’s comment on the Braves getting Keuchel seem to confirm that money was the overriding factor. If the Yanks, somehow, add an elite arm through a trade, then my griping will fade. But till then, I feel like we’re just looking at ownership being a penny wise and a pound foolish. That just sucks.

    • Randy

      Sure if you think they’re greedy that is totally fine. There is mention in the post of filling Hal’s pockets.

      They passed on Keuchel because he didn’t fit their profile well enough to meet his demands.

  6. I can imagine what fans would be saying if the Yanks had signed Josh Hamilton, Robinson Cano, and Shin-Soo Choo.

    • Randy

      Cano was really good until this year. The other two…yeah…

  7. Are they at least going to make a real effort to get Gerrit Cole this offseason?

  8. There is too much inherent risk in long term free agent contracts and not much excess value. Free agents almost always are close to their decline stage, as they have a minimum of 6 years of service time. And even if they are younger, like Harper and Machado, it doesn’t guarantee that they will be productive for 10+ years thereafter.

    I think it’s pretty clear at this point that you can’t simply buy a championship. The teams that seem to do best cultivate a cheap young core and then prudently supplement that core with well thought out free agent signings.

    It isn’t fair to say that the Yankees are reluctant to flex their financial might. They have the 2nd highest payroll in the game presently. And that’s before they extend much of their young core – which they will do. In fact, that’s probably what differentiates them from other teams like the Rays and Royals. We will likely see Judge and Sanchez playing here in 8 years. A Rays fan understands that Chris Archer has to be traded when he gets close to free agency and have to keep their fingers crossed that Glasnow and Meadows turn into studs. It doesn’t always happen.

    • Randy

      It’s pretty fair to say the Yankees don’t flex their financial might. There are numerous examples to cite. This past offseason was a clear case of not wanting to flex those muscles. And the 2nd highest payroll stat is misleading. Very few teams in the game are interested in spending money. They’ve signed a bunch of short term deals and will have a ton of payroll room shortly so these potential extensions will keep them in the same payroll space and maybe even lower than where it is now.

      • If you start with the premise that money is not unlimited – even for the Yankees – then there has to be a decision making process on how you are going to spend that scarce resource. In other words, just because you CAN sign a Harper or Machado (or both), doesn’t mean you SHOULD.

        I am not going to complaint when my team is among the top 2 spenders in all of baseball. And since we do have a budget (there will always be a budget), I would say that Cashman’s decision making on how to allocate it has been near flawless going back to this past off season. The free agent he did sign ended up being more valuable (at a tenth of the cost) then Machado or Harper.

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