Yankees May Cut Payroll In Upcoming Seasons Because Hal Steinbrenner Says Current Spending 'Not Sustainable'

The New York Yankees have gotten off to an exceptional start through late-May with a 34-17 record and three-game lead in the American League East.

After a disappointing 2023 saw them miss the postseason, the Yankees increased spending by acquiring superstar outfielder Juan Soto in December from the San Diego Padres. Soto's $31 million salary pushed the Yankees spending this season to over $300 million, an entirely justifiable number for the country's largest media market.

Well, justifiable to everyone except the Yankees owner.

Hal Steinbrenner spoke to the media at Major League Baseball owners meetings on Wednesday, and delivered some bad news to Yankees fans hoping for a return to financial dominance. "I’m gonna be honest, payrolls at the levels we’re at right now are simply not sustainable for us financially," Steinbrenner said, according to the New York Post. "It wouldn’t be sustainable for the vast majority of ownership [groups], given the luxury tax we have to pay."

He also said he doesn't believe $300 million payrolls are necessary to win a World Series.

"I’ve been a broken record [on this topic]: I don’t believe I should have a $300 million payroll to win a championship," Steinbrenner continued. "I believe I need a good mix of veterans, who are gonna make a lot more money, but also we’ve put a lot of money into our player development system in the last 5-10 years. And in my opinion, we have one of the better ones in baseball now."

May 22, 2024; Bronx, New York, USA;  New York Yankees right fielder Juan Soto (22) celebrates with center fielder Aaron Judge (99) after hitting his second home run of the game in the sixth inning against the Seattle Mariners at Yankee Stadium. Mandatory Credit: Wendell Cruz-USA TODAY Sports

How Do Steinbrenner Comments Affect Yankees Pursuit Of Juan Soto?

These comments seem to contradict what Steinbrenner said recently about the Yankees hoping to keep Juan Soto in the Bronx after the season.

READ: Juan Soto May Stick Around In New York Longer Than Expected

But he addressed that, to an extent, saying that the organization will shed some contracts and commitments after 2024.

"We’ve got a considerable amount of money coming off [next offseason]," Steinbrenner said. "We didn’t have a considerable amount of money coming off last offseason, which is why we’re at where we’re at." 

He also said that Soto's been everything he hoped he'd be, coming into a difficult situation in New York.

"I had no doubt Juan Soto would perform in New York," he explained. "The market, the pressure, none of that was gonna be a problem. [It was]: How would he interact with the fans, how would he interact with [the media], how would he interact with his teammates? Those were the three questions I had, and he’s been great on all three."

The Yankees do already have nearly $200 million in luxury tax commitments already for 2025, not counting Soto or the plethora of club options. And there are a substantial amount of free agents to be that are making high salaries. Though some of them are key contributors.

Soto, Gleyber Torres, Clay Holmes and Alex Verdugo will hit the open market this November, and make nearly $66 million combined. But the Yankees will have to replace their production somehow, if not by resigning Soto. Gerrit Cole could opt out of his $36 million salary, though he too would need to be replaced. 

The simplest answer to these financial questions is for the Yankees to act like the New York Yankees and sign whoever they want. They're the richest franchise in the sport, draw huge crowds and ratings, and sell the most merchandise. Steinbrenner is right, spending doesn't guarantee titles. But nothing can given the modern playoff structure. So build the best possible team and hope for good luck in October.

He may not need to spend $300 million to do that, but it sure doesn't hurt.