The Yankees main strength is having the best farm system in baseball, not their ability to nab prime free agents (although that's a close second). As I said in an earlier post, the vast majority of their best players were farm system guys. They use free agents to fill weak spots rather than to build a team.
Lost in (some) Red Sox fans' whining about the Yankee payroll is the fact that Boston itself has the 3rd highest payroll in the league.
What makes the Yankee payroll an issue is not their ability to sign big-name free agents (they don't sign many of these), but their ability to maintain the kind of depth that most teams can only dream of. Imagine being in Joe Torre's position throughout this year, when he had to select five starters from a group of
seven that the Yankees had on their roster at any given time (Mussina, Pettitte, Clemens, Wells, Weaver, Hitchcock, and Contreras). Very few teams in baseball can keep that many quality spare parts on their rosters.
I'm not using this as an excuse (in fact, I'm a Yankee fan) -- I'm simply pointing out the honest truth here.