The Yankees finally made it to the World Series in 2024 after a 15-year absence and then they were ousted -- convincingly -- by the Blue Jays in the ALDS a year later.
It was a disappointing end for a team that had high hopes despite the loss of Juan Soto. The additions of Cody Bellinger, Max Fried, Paul Goldschmidt,and others helped the Yanks get out to a hot start before their usual summer swoon cost them the AL East. Even though the Yankees ended the 2025 regular season on a heater, and bounced the rival Red Sox in the Wild Card round, they weren't able to get past the eventual AL champions.
So, how can New York finally get over the hump? That's a question principal owner Hal Steinbrenner and GM Brian Cashman have to answer, and it won't be easy.
Although the starting rotation is set -- once the injured arms return -- the Yankees need to rebuild the back end of the bullpen and the lineup needs some tweaks to surround Aaron Judge with quality bats.
Two moves have already been made, one by Cashman and the other by Trent Grisham. The Yankees' first signing this offseason was bringing back Ryan Yarbrough on a one-year deal, while Grisham accepted his qualifying offer.
As the offseason chugs along, here's a look at the team's payroll situation for the upcoming season and beyond...
SALARY COMMITTED FOR 2026
The last two seasons, the Yankees' payroll eclipsed the top luxury tax (competitive balance tax) and they will be close to doing so again in 2026.
The first luxury tax threshold is set for $244 million this upcoming season, so it's hard to imagine a world where the Yankees will not exceed the top threshold (set for $304 million in 2026) again, despite how ownership may feel.
After Grisham's qualifying offer, the Yankees have approximately $190.25 million committed for 2026, coming from seven contracts: Judge ($40 million), Gerrit Cole ($36 million),Fried ($27.25 million), Carlos Rodón ($27 million), Giancarlo Stanton ($22 million), Grisham ($22 million) and Ryan McMahon ($16 million).
Then there's the dead money.
Aaron Hicks and his $10 million will be off the books this season (after a $1 million buyout) and give the Yanks more flexibility. Unfortunately, it's offset by the contract of DJ LeMahieu. The Yankees released the utility man midseason, but he will still be owed $15 million in 2026. LeMahieu's contract was destined to be bad, but it was compounded by how New York tried to utilize the former batting champion in 2025, when his skills were clearly diminished.
The team eventually made the right decision to release him, but he'll still be owed money this coming season. Luckily, it's just for one season. That pushes the committed payroll to $183.25 million.
Aside from Hicks' contract, here are the Yankees' free agents and what they earned in 2025 after Grisham and Yarbrough's return:
- Cody Bellinger ($27.5 million)
- Paul Goldschmidt ($12.5 million)
- Devin Williams ($8.6 million)
- Luke Weaver ($2.5 million)
- Amed Rosario ($688,200)
- Austin Slater ($573,900)
- Paul Blackburn ($159,400)
With Hicks' $10 million gone, that brings the total to around $61 million off the books. That's a nice chunk of change, but there are serious decisions to be made about which players the Yanks should think about bringing back. Bellinger was arguably the team's second-best hitter this season and brought elite defense.
Cashman said at the GM Meetings this offseason that the possibility of Grisham accepting the qualifying offer wouldn't change their pursuit of Bellinger, but we'll see if that is true, now that it has happened.
The potential losses of Williams and Weaver put the bullpen in a tough spot, but Yarbrough gives the Yankees flexibility to have a longman out of the bullpen while also having a potential starter to fill in spots left open by injured starters Cole and Rodón.
The Yankees' bench is also in need of some additions. Rosario was a great right-handed bat that gave manager Aaron Boone some flexibility and should be a player the organization considers bringing back.
The Yankees had two players with options, and they accepted one and declined the other. Jonathan Loaisiga ($5 million) will not return under that contract, while Tim Hill ($3 million) will.
WHAT WILL THE ARBITRATION-ELIGIBLE AND 0-TO-3 PLAYERS MAKE?
The Yankees have 14 players who are eligible for arbitration. Those players, along with their expected 2026 salary via Cot's Baseball Contracts, are:
- Jazz Chisholm Jr. ($10.25 million)
- David Bednar ($8.5 million)
- Camilo Doval ($6 million)
- Clarke Schmidt ($5.25 million)
- Anthony Volpe ($3.525 million)
- Mark Leiter Jr. ($2.75 million)
- Jose Caballero ($2.325 million)
- Luis Gil ($1.9 million)
- Fernando Cruz ($1.2 million)
- Ian Hamilton ($1.1 million)
- Jake Bird ($1 million)
- Oswaldo Cabrera ($1 million)
- Jake Cousins ($841,050)
- Scott Effross ($800,000)
The combined salary of the arbitration players is approximately $46.45 million, and that's if the Yanks don't non-tender certain players. And out of this list of 14(!), there are a few candidates who may not get offered arbitration -- they come out of the bullpen.
Leiter has been mercurial since arriving at the deadline in 2024, and this is his final arbitration-eligible season. Hamilton and Bird finished 2025 in the minors due to poor performance, but both have two more years of arbitration, so the Yankees may want to keep them around. The same goes for Cousins -- who underwent Tommy John surgery in mid-2025 and will likely be out for 2026 -- while Effross has one more year of team control after 2026 and wasn't effective when he returned from injury in the middle of the season.
Adding in all the arbitration players, the Yankees' payroll in 2026 would be at $229.7 million.
This list doesn't include players who are not eligible for arbitration and will make the league minimum ($780,000). Those players include Austin Wells, Jasson Dominguez, Ben Rice, Will Warren and Cam Schlittler.
HOW MUCH MONEY IS THERE TO ADD PLAYERS THIS OFFSEASON?
With committed salaries and estimated arbitration salaries and raises, the Yankees currently have approximately $271.4 million on the books for their 40-man roster in 2026, already going over the first tax threshold, and threatening the top threshold.
It's unlikely the Yankees remain below $300 million as ownership would like, but it'll be interesting to see how Cashman approaches the offseason with the recent additions.
The Yankees still need to add to their outfield with Bellinger gone. While the Yanks have made it clear they want to bring back Bellinger, they won't be the only team looking for the former NL MVP's services.
Kyle Tucker is now a free agent and should be a target for the Yankees, who can use a consistent bat to go alongside Judge. Going after Tucker would be a longer-term commitment than one the Yanks would give to Bellinger. It'll likely come down to money and how much Steinbrenner is willing to spend. However, it's very likely that Grisham's QO will limit the money the Yankees could offer Tucker in 2026, so we'll see what happens on that front.
Although the Yankees' starting rotation is pretty much set once Cole and Rodon return, opportunities to add are possible. The Yankees could want to bring in a stop-gap arm to go alongside Fried, Gil, Warren, and Schlittler. There's also the trade market the Yankees could explore. Tarik Skubal is a name the hot stove has thrown out there, and he would fit in a rotation that is already one of the best in the majors.
And then there's the bullpen. It's unlikely that both Weaver and Williams will be back, but re-signing Weaver -- who will likely be cheaper -- and then adding arms to fill out the rest of the bullpen, like with Yarbrough and bringing back Hill, could make sense.
The Yankees also need to add to their bench. Luckily, Cabrera will return to be Boone's Swiss-Army Knife alongside Caballero. However, a right-handed hitting first baseman option to platoon with Rice may be needed this offseason.
And what about Volpe? Will the Yankees stay patient with their former prospect, or try to look outside the organization? Bo Bichette is a free agent, but it's highly unlikely the Yankees will spend the big money to acquire him.
Will the Yankees go over the $304 million top threshold? With what they need, it looks likely.
WHAT ABOUT EXTENSIONS FOR UNDER-CONTROL PLAYERS?
In previous years, you could have listed names like Volpe or Wells, but after subpar 2025 seasons -- and with so many years of arbitration still left -- the Yankees will likely let their play dictate whether an extension is in the cards.
There is one player who could be receiving an extension, and that's Chisholm. The talented infielder is in the final year of arbitration and will be a free agent after the 2026 season. The organization clearly likes Chisholm for his athleticism, versatility, power, and locker room presence. He made his second career All-Star Game this season and became just the third player in Yankees history to record a 30-30 season.
There's a world where the Yanks extend Chisholm (entering his age-28 season), buying out his final year of arbitration and keeping him in pinstripes for the foreseeable future.
THE PAYROLL SITUATION IN 2027 AND BEYOND
Here are the Yankees' projected 40-man roster salary obligations from 2027 to 2030, via Cot's:
2027: $166.33 million
2028: $125.33 million
2029: $71.5 million
2030: $71.5 million
After 2027, it gets interesting.
Stanton has a club option that the Yankees will most likely not exercise after that year, freeing up $15 million. McMahon will also be a free agent, adding another $16 million to the Yankees' coffers. However, by then, Chisholm and Bednar will be free agents, unless they are extended. There will be big holes to fill -- as per usual with this team -- so that money will need to be used to shore up the infield and the closer's role.
Looking past 2028, only Judge and Fried have guaranteed contracts -- Cole and Rodon are free agents after 2028 -- so it'll be interesting to see where Cashman puts the money.
The Yankees do have young arms who are major league ready, like Gil, Warren, and Schlittler, who could eventually replace Cole and Rodon for much cheaper. Meanwhile, prospects like Carlos Lagrange, Elmer Rodríguez and Chase Hampton are close to the majors. The Yankees' pipeline of pitchers is rich and its future is seemingly bright.
The same might not be said about the Yankees' infield situation. Outside of George Lombard Jr., who is close to the majors and could realistically usurp Volpe sooner rather than later, there isn't much developed. The same can kind of be said about the outfield.
This season will be big for Dominguez, as it'll show the Yankees whether he can be an everyday outfielder for them.
There's also Spencer Jones, who skyrocketed up to Triple-A this past season and could be an option in the outfield in 2026. But outside of Judge, there's a lot of unknowns in the outfield, which won't change in the near future, even with Grisham returning next season.
So while the Yanks would love to stay below the top tax threshold, it's not realistic for the next few seasons. And it won't be realistic unless these prospects start to develop and prove they can perform at the big league level.
Until then, expect more big contracts from the Bronx, and that's OK. The Yankees, despite the guaranteed bucks, can work in that realm and remain flexible.
Raphielle Johnson
