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

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.

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.

Of course, the Yanks could spend more than that $40 million if they want to. The opening of the New Yankee Stadium would seem to be a good reason to increase payroll, and should provide the team with increased revenue. That is, it should, but investigations into the Stadium’s funding, the hundreds of millions of dollars of tax exempt bonds still awaiting approval, the back taxes owed by the team, and the recession economy which has slowed the sale of the big ticket luxury suites call all of that into question. So let’s start with just that $40 million left over from the 2008 payroll.

The most recent rumors had the Yankees offering something in the area of 85 million over five years to A.J. Burnett. That . . . (mmf, excuse me, I just threw up in my mouth a little) . . . works out to an average annual salary of $17 million. The latest rumor regarding Derek Lowe revolved around a four-year deal worth $60 million for an average annual salary of $15 million. The last Ben Sheets rumor I’ve heard involved a two-year deal worth $26 million ($13 million annually), and with Andy Pettitte balking at a $10 million offer coming off his one-year deal for $16 million, I’d say $13 million for him sounds like a fair estimate as well.

The Yankees can easily afford two of these pitchers with money left over from last year, but signing Burnett (grkh) and Lowe would leave them just $8 million to help reload on offense before they’d have to start increasing payroll. Signing Pettitte and Sheets, however, would leave them with $14 million, which might be enough to start talking to a big bopper such as Adam Dunn (who earned $10.5 million last year and had the Reds turn down his $13 million option) or Pat Burrell (who made $14 million in 2008).

Signing Pettitte and Sheets would also allow the Yankees to maintain flexibility in their rotation as their pitching prospects continue to graduate to the majors. If the 2009 was comprised of Sabathia, Wang, Joba Chamberlain, Pettitte, and Sheets, with Phil Hughes, Alfredo Aceves, and Ian Kennedy as injury insurance. The 2010 rotation would shed Pettitte following his one-year deal allowing Hughes to move into the rotation with Chamberlain expanding his innings total to something close to 200. Sheets’ two-year deal would then expire after that season allowing Kennedy or Zach McAllister, who will start 2009 in Double-A, to take his spot. Of course, Wang would be a free agent following the 2010 season as well, but that would allow the Yankees to choose between Sheets and Wang and the other free agents on the market with Sabathia still in place, Chamberlain and Hughes behind him still under team control, and Kennedy or McAllister in line available as the fifth starter.

Certainly there’s a fair bit of wishful thinking going on there with regard to the team’s pitching prospects, but, as I’ve written before, there are still more prospects behind Chamberlain, Hughes, Kennedy, and McAllister. Only three of them need to pan out in the scenario I’ve just described, and the third need be no better than a fifth starter. Given the talent in the system, that’s not too much to expect. Just look at the young, home-grown rotations of teams such as the Rays, Blue Jays, and Twins, to name three that come immediately to mind.

Beyond saving a few million in 2009, the Yankees should steer clear of Burnett and Lowe now that Sabathia is in place primarily because additional long term deals would rob the team of it’s ability to take advantage of it’s greatest resource, it’s rich crop of pitching talent.

The other reason the Yankees need to stop their insane pursuit of Burnett and Lowe (beyond the respective injury and age-related risks those pitchers will bring with them) is that, now that they’ve landed a true ace, the Yankees biggest problem is not starting pitching, but offense. Bobby Abreu and Jason Giambi aren’t just clearing $32 million off the books, they’re also clearing 62.4 VORP (or roughly six wins worth of offense) off the books. Even if Nick Swisher has a full rebound to his 2007 level of production, he’ll only replace half of that. Besides which, the Yankee offense underperformed last year. The Yankees don’t just need to replace Giambi and Abreu, they need to replace their production and add more. If Xavier Nady returns to his 2007 levels, he’ll only contribute about 9 VORP beyond what he gave the Yankees last year. Nady and Swisher aren’t enough.

Though it’s admittedly unrealistic, the best way the Yankees could use that remaining $40 million would be to give $25 million a year to Mark Teixeira (who was worth 65.2 VORP all by himself last year), $13 million to whichever of Pettitte or Sheets either is willing to take it or has the least disturbing medical records (ideally Sheets for two years rather than Pettitte for one), and put the remaining $2 million toward a two-year deal for Braden Looper worth about $5 million per year. That would allow the Yankees to either platoon Nady and Swisher in right field or trade one of Nady, Johnny Damon, or Hideki Matsui for help in center or at catcher, would give them a rotation of Sabathia, Wang, Chamberlain, Pettitte/Sheets, and Looper with Hughes, Aceves, and Kennedy as backup, and would allow them to run out this lineup:

L – Johnny Damon (LF)
R – Derek Jeter (SS)
S – Mark Teixeira (1B)
R – Alex Rodriguez (3B)
S – Jorge Posada (C)
L – Hideki Matsui (DH)
S/R – Swisher/Nady (RF)
L – Robinson Cano (2B)
L – Brett Gardner (CF)

Take Teixeira out of that lineup and it’s not a pretty picture given the 2008 performances of Posada, Matsui, Cano, and Gardner and the advancing age of Damon, Jeter, Posada, and Matsui. As for Gardner, I’m still wondering if Jim Edmonds might take $5 million or so or perhaps an even lower base with incentives to take a stab at center field. I’m also wondering how much of this post will still be relevant by the time you reach this sentence.

Oh, and before I go, here’s one more lineup to consider:

L – Jacoby Ellsbury (CF)
R – Dustin Pedroia (2B)
S – Mark Teixeira (1B)
R – Kevin Youkilis (3B)
L – David Ortiz (DH)
R – Jason Bay (LF)
L – J.D. Drew (RF)
S – Jed Lowrie (SS)
Does it really matter? (C)

That can’t be allowed to happen.