The luxury tax isn’t restraining their spending. Realizing that they’ve been grossly overpaying for talent lately and haven’t even gotten a whiff of a championship in 6 year and clearly need to rebuild the team is restraining their spending. And that’s only because you don’t rebuild a team paying huge some to aging veterans. They’ll be back to their spendy ways, they’re the Yankees, they have enough revenue that the luxury tax is completely meaningless to them. Any “cap” that isn’t a hard cap is a joke. The Yanks have been proving that for a quarter of a century and they will resume proving that as soon as they have a team that’s actually talented and worth spending money on.
They have $100 million coming off teh books in the next two offseasons, and they are not planning to lay out nearly that much. They’ve been making a deliberate effort to get younger and more athletic (and thus cheaper) and to rely on their homegrown talent.
The Yankees pay a 50 percent luxury tax rate and have for a while. The 1996 World Champions had the #10 payroll in baseball. They’ve publicly said, “You don’t need to have a $200 million payroll to win.”
So they’ve started going to homegrown players like Severino, Bird, Heathcott, Mason Williams, Romine, Sanchez, and others, with others such as Aaron Judge and Jorge Mateo on the way. They’ve surrounded that core with an “outer core” of younger, more athletic, cheaper players like Didi Gregorius, Starlin Castro, Aaron Hicks, Nathan Eovaldi, Tanaka, Pineda, and others.
If they can get under $189 MM in 2018, they reset the luxury tax rate from the current 50 percent back to 17.5 percent, which makes a lot more money available as their players win, gain experience, and grow into higher salaries.