The New York Yankees, always a major player in the pursuit of championships, find themselves in a tight financial spot as they attempt to stay competitive in a system that increasingly rewards financial flexibility. With a hefty luxury tax salary bill of $303 million, the team is now wrestling with the consequences of poor past decisions, which are leaving them with $16 million in dead money—players who are no longer contributing but still being paid.
Sitting comfortably over the fourth-tier luxury tax threshold of $301 million, the Yankees’ financial flexibility is limited. While they’ve made some headway by targeting players like Paul Goldschmidt and Max Fried to fill key holes in the lineup, their efforts are increasingly complicated by lingering financial obligations. Even if they manage to offload some costly contracts—such as Marcus Stroman’s $18.5 million deal—the Yankees will still be tied to hefty salary burdens that hinder their ability to maneuver in free agency.
The Aaron Hicks Burden
Perhaps the most glaring example of wasted money is Aaron Hicks, a player the Yankees invested in with a seven-year, $70 million contract that has long since soured. Hicks, owed $9.8 million for 2025 and a $1 million buyout in 2026, is no longer a productive member of the roster. After being traded to the Los Angeles Angels in 2024, Hicks appeared in only 18 games before effectively being discarded. His once-promising career has all but faded, and it’s uncertain if any other team will give him a chance to revive his game. For the Yankees, it’s a classic case of a contract gone awry, where they continue to pay for a player who no longer provides value.
The Decline of Anthony Rizzo
Another financial anchor weighing down the Yankees is Anthony Rizzo. The team owes the veteran first baseman $6 million in 2025 after declining his $17 million club option. Rizzo’s once-dominant bat has been in decline for the past two seasons, as seen in his disappointing 2024 performance: .228/.301/.335 with only eight home runs and 35 RBIs in 92 games. His lack of power and slipping defensive ability raise questions about whether he can still be a starting player in the league. If Rizzo decides to retire rather than accept a reduced role, the Yankees will continue to be on the hook for his payments.
The Void Left by Juan Soto
The loss of Juan Soto to the Mets has been another blow to the Yankees’ financial and roster-building efforts. While the team has made aggressive moves to plug the gap—acquiring Goldschmidt and Fried—there remains a significant void in their infield. The Yankees are still missing a key offensive piece, a hole that’s particularly apparent as they struggle to replace the production of a player like Soto. Without this critical addition, their ability to contend in an increasingly competitive American League is jeopardized.
Financial Hurdles and Championship Aspirations
The Yankees’ path to success this offseason is being held back by financial caution. The dead money from players like Hicks and Rizzo significantly eats into their ability to sign a much-needed infield bat, putting their championship hopes in limbo. Despite making some key acquisitions, their financial constraints highlight the lasting consequences of past mismanagement. For the Yankees to make one more impactful move and solidify their position as contenders, they must first navigate these financial hurdles carefully.
