Want to learn more about the Yankees’ payroll? William Juliano and Mike Axisa ‘splain.

I’ve posted some version of this chart twice before, but now that the Yankees have wrapped up their arbitration cases, I thought I’d update it one last time, adding Andy Pettitte’s new deal and the 2008 dollars spent on LaTroy Hawkins, which I erroneously left out of my previous two bits of accounting.

Note that I’m assuming that Pettitte will achieve all of his bonuses (which he will if he stays off the DL and throws 210 innings). As for Hawkins, the Yankees traded him to the Astros at the trading deadline last year and picked up a “significant portion” of his remaining salary of the deal. In the absence of the specific numbers, I’m assuming they paid all of his $3.75 million salary last year. Most likely the bonuses Pettitte fails to reach (2009 dollars) will be balanced out by the portion of Hawkins’ 2008 salary paid by the Astros (2008  dollars). The chart doesn’t include service-time increases to pre-arbitration players such as Joba Chamberlain and the middle relievers, but those will likely total less than a million dollars.

all costs in millions of dollars; *estimated prorated portion of 2008 salary

So the end result of all of the Yankees’ offseason spending is a roughly $19 million increase in payroll. Of course, the Yankees have hidden that increase by shifting 14 million of the dollars owed to CC Sabathia and Mark Teixeira this year into their signing bonuses, which the club doesn’t count as payroll, but I do (all figures above include any relevant portions of signing bonuses).

Here’s the result of that $19 million increase (ages as of April 15 in parentheses):

• Mark Teixeira (29) replaces Jason Giambi (38)
• CC Sabathia (28) replaces Mike Mussina (40)
• A.J. Burnett (32) replaces Carl Pavano (33)
• Xavier Nady (30) replaces Bobby Abreu (35)
• Nick Swisher (28) replaces Wilson Betemit (27)
• Damaso Marte (34)  replaces Kyle Farnsworth (33)

Not bad at all.

Okay, so the Yankees have landed the big fish, with CC Sabathia agreeing to a seven-year deal worth roughly $161 million. Now what? The rumor mill has had them going hard after first Derek Lowe, then A.J. Burnett, with Ben Sheets and Andy Pettitte serving as backup options who could be had with shorter term contracts.

This prompts two questions: Exactly how much money to they have left to spend? and What about the offense?

With regards to the first, let’s do the math on the money coming off last year’s payroll and how much of that has already been spent:

all costs in millions of dollars; *estimated prorated portion of 2008 salary

In addition to the above, the Yankees have four arbitration eligible players. Three of whom had poor 2008 seasons and thus are unlikely to have much negative effect on the bottom line. Those three are Chien-Ming Wang, Brian Bruney, and Melky Cabrera. The last is Xavier Nady. The Yankees paid Nady roughly $1.12 million of his $3.35 million salary last year. Nady would cost the Yankees an extra $2.23 million even without getting a raise and is coming off a career year. It wouldn’t be unreasonable to expect his salary to exceed $5 million in 2009. To make things simple, I’ll just round down the Yankees net savings in the chart above to $40 million.

(more…)