The New York Yankees Secure Solid Base Foundation with Acquisition of Paul Goldschmidt
The New York Yankees Secure Solid Base Foundation with Acquisition of Paul Goldschmidt
The New York Yankees have been quite active in Major League Baseball's offseason. They've dished out $218 million over eight years for left-handed starting pitcher Max Fried through free agency, and they've also acquired outfielder/first baseman Cody Bellinger and right-handed relief pitcher Devin Williams via trades with the Chicago Cubs and Milwaukee Brewers, respectively. Additionally, they've obtained right-handed pitcher Fernando Cruz and catcher Alex Jackson from the Cincinnati Reds in exchange for catcher Jose Trevino, bolstering their bullpen.
As the Yankees continue to address roster issues, four significant factors emerged when they agreed to a one-year, $12.5 million contract with first baseman Paul Goldschmidt, as reported by Jack Curry of the YES Network. These factors include the implications of the Competitive Balance Tax, the compensation associated with free agents who declined qualifying offers, concerns about signing another high-priced free agent, and the readiness to take calculated gambles on experienced veterans near the end of their careers.
Yankees and Competitive Balance Tax
After the commissioner's office of Major League Baseball published the 2024 payrolls and Competitive Balance Tax penalties, the Yankees were hit with a $62.5 million penalty as a third-time Competitive Balance Tax violator under the current collective bargaining agreement. The team's final 2024 payroll was $316,192,828, surpassing the season's base tax threshold of $237 million. Since the inception of the Competitive Balance Tax in 2003, the Yankees have cumulatively paid $452 million in penalties. In 2023, the team paid a $32.4 million penalty, based on a final payroll of $283,769,980 and a base tax threshold of $233 million.
As Competitive Balance Tax payors, signing free agents who have rejected qualifying offers poses challenges for the Yankees. Fried's signing has cost them their second- and fifth-highest picks in the 2025 draft, as well as $1 million from the international bonus pool, according to qualifying offer rules. The signing of Goldschmidt and the subsequent agreement of first baseman Christian Walker with the Houston Astros on a three-year, $60 million contract will likely lead to a different approach when it comes to free agent third baseman Alex Bregman, who turned down a qualifying offer from the Astros. If the Yankees sign Bregman, they would have to forfeit their third- and sixth-highest draft picks in the 2025 draft, based on qualifying offer rules.
Yankees' Financial Responsibility
Financial responsibility is a priority for the Yankees, as demonstrated by the Cubs covering $5 million of Bellinger's contract over the next two seasons. According to Cot's Baseball Contracts, Bellinger exercised a $27.5 million player option for the 2025 season and has a $25 million player option for the 2026 season with a $5 million buyout. While some may mock the Yankees for asking the Cubs to contribute $5 million towards Bellinger's contract, every dollar counts for a Competitive Balance Tax payor seeking value in talent acquisitions.
The Yankees were hesitant about the qualifying offer penalties associated with Walker's free agency and the high financial commitment of a $20 million annual value contract for a 34-year-old ballplayer. Pete Alonso was not a viable option due to cost and the team's requirements for a first baseman with strong defensive capabilities. Given Goldschmidt's accomplishments over his 14-year major league career with the Arizona Diamondbacks and St. Louis Cardinals, the Yankees signed him to a one-year contract despite his age and potential decrease in skills.
Goldschmidt, now 37, has experienced a significant drop in offensive production since winning the National League's Most Valuable Player award in 2022. In 154 games last season, Goldschmidt posted an on-base plus slugging plus (OPS+) of 98, which is below league average. Compared to his 120 OPS+ in 154 games during the 2023 season, Goldschmidt's decline in performance is apparent. Despite his age and apparent decline in skills, Goldschmidt brings value to the Yankees through veteran leadership, stability at first base, and an impressive trophy case filled with Gold Glove and Silver Slugger awards. Additionally, Goldschmidt is just one of four Yankees players to win a Most Valuable Player award, alongside Cody Bellinger, Aaron Judge, and Giancarlo Stanton.
A one-year contract worth $12.5 million is a worthwhile investment for the Yankees, given Goldschmidt's performance outpaced an injury-prone Anthony Rizzo in 2023. After receiving a $17 million salary in 2024, the 35-year-old Rizzo declined the $17 million club option for 2025 and the Yankees opted to pay a $6 million buyout instead, as per Cot's Baseball Contracts.
Sure thing, let me rephrase that for you:
Goldschmidt addressing one infield issue has now turned third base into a hot topic. If the Yankees aren't ready to offer a long-term deal to Bregman as he enters his age-31 season, might Arenado, who's 33 and can opt out of his contract after 2021, be an option if he waves his no-trade clause? According to Cot's Baseball Contracts, Arenado's still owed $74M over the next three years, but with some complicated deferred payments and a $10M penalty if he opts out in 2021.
The Yankees haven't had great history with the Cardinals and Arenado following a trade proposal involving righty Marcus Stroman. Stroman, turning 33 next, has a $18M due in 2025 and a $18M option for 2026 with 140 IP in 2022, as noted by Cot's Baseball Contracts. Given the Cards are restructuring both in terms of players and payroll, any team eyeing Arenado will likely want a good pay deal to cover the balance on his contract.
The New York Yankees have been on a roll this offseason, almost like a new team, following Juan Soto's departure to the Mets. Improvements are evident, but the Yankees still face a tricky situation about how to handle third base. Alex Bregman's a popular choice, but the financial and qualifying offer implications go well beyond a $200M contract. The trade market could drastically transform for Nolan Arenado and the St. Louis Cardinals, considering Paul Goldschmidt has agreed to a one-year contract with the Yankees. Besides providing veteran leadership and enhancing their already strong lineup, Goldschmidt could also dictate who occupies the third base spot in the Bronx the following season.
The Yankees' acquisition of Paul Goldschmidt might impact their approach to third base, as signing free agent Alex Bregman would result in forfeiting higher draft picks based on qualifying offer rules. Meanwhile, Nolan Arenado, who can opt out of his contract with the St. Louis Cardinals, could be an option if his financial demands and no-trade clause are acceptable. Additionally, Max Fried's signing cost the Yankees their second- and fifth-highest picks in the 2025 draft, as well as international bonus pool money, due to qualifying offer rules.