Why Hal Steinbrenner, New York Yankees May Be Headed Towards Rebuilding Mode

Alexander Smith@RealAlexSmith19Correspondent IDecember 28, 2012

NEW YORK, NY - JANUARY 24: Hal Steinbrenner, Managing General Partner / Co-Chairperson speaks to the media after Jorge Posada announces his retirement from the New York Yankees during a press conference at Yankee Stadium on January 24, 2012 in the Bronx borough of  New York City.  (Photo by Mike Stobe/Getty Images)
Mike Stobe/Getty Images

The New York Yankees' 2012-13 offseason has gone differently than most other winters in New York. The Yankees, who are often a force in the free-agent and trade markets, have laid low and allowed other big-market rivals like the Los Angeles Dodgers and Los Angeles Angels steal the headlines. 

Not only have the Yankees avoided big-name free agents, they have even let some of their own players walk, largely due to monetary reasons.

Nick Swisher, Russell Martin and Eric Chavez are all headed to new destinations due to contract offers that the Yankees refused to match. In addition, the Bombers have shown no interest in offering Rafael Soriano the type of multi-year deal he is seeking from other teams.

The reluctance of the Yankees brass to dole out large contracts may come from not seeing a good fit with any of this year's free agents. Or, it could be indicative of a new era in New York.     

This frugality comes directly from Hal Steinbrenner’s determination to get the team under the $189 million luxury tax by 2014. Unlike his father, George, Hal seems much more concerned with budgetary constraints. All signs point a substantial reduction in the team’s payroll.   

Evidence of this is seen in a New York Times article published last March, where Hal was quoted as saying: "Budgets matter, and balance sheets matter. I just feel that if you do well on the player-development side and you have a good farm system, you don’t need a $220 million payroll. You don’t. You can field every bit as good a team with young talent."

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Hal Steinbrenner has seen the success that teams like the Tampa Bay Rays, Oakland Athletics, San Francisco Giants and Washington Nationals have had building from within, and he believes the Yankees can also win without inflated player salaries. 

But while this refreshing approach sounds great in theory, the Yankees' farm system is not in a state to support it. Not yet, at least.

The cornerstone of the Yankees' farm system, Jesus Montero, was shipped off to the Seattle Mariners last offseason for Michael Pineda, who has yet to pitch an inning in pinstripes due to injury.    

In addition, top pitching prospects Manny Banuelos and Dellin Betances have seen major setbacks over the past year.

While Banuelos remains a solid prospect following Tommy John surgery, but his minor league statistics were far from dominant once he departed from Single A. Betances, on the other hand, has seen a significant decline in performance and could possibly never return to the Bronx.   

Other pitching prospects like Adam Warren and Chase Whitley could see innings with the Yankees this season, but are not key cogs in the team’s future.     

On the offensive side, Austin Romine and Zoilo Almonte should have opportunities to break into the Yankees' starting lineup going forward, but specific deficiencies could prevent them from making a lasting impact.      

Romine has shown outstanding defensive skills but only hit .243 in the minors last season. It’s hard to see the Yankees counting on him in the long term.   

Almonte, to his credit, has risen from an afterthought within the organization to a legitimate prospect.  If he continues to improve, he could one day be a starting outfielder. That said, there are doubts about how high his ceiling actually is, due in part to his tendency to strike out (103 times in 419 at-bats in Double-A last season).       

The true strength of the Yankees' farm system is at lower levels like Class A.

Unfortunately though, most of that talent is still years away from the majors. Outfielders Mason Williams, Slade Heathcott and Tyler Austin, as well as catcher Gary Sanchez, lead a talented group. But questions naturally remain as to how well their skills will transfer to higher levels.        

Success at each level of professional baseball is earned, not given. Until these players prove themselves against tougher competition, nothing can be assumed.    

Thus, because of the flaws in the Yankees' farm system, a rebuilding phase will be necessary if Steinbrenner plans to fully implement the strategy he seemingly desires.    

There are two ways the Yankees can go about this rebuilding process.  

First, despite the holes in their lineup, the Yankees should be good enough to at least compete in the AL East in the years to come. If the team re-signs Robinson Cano, then Cano together with Curtis Granderson, C.C. Sabathia and Mark Teixeira should provide the Bronx Bombers with a strong enough nucleus to stay competitive.    

This would give the prospects already in the Yankees' system enough time to properly develop until they are ready to contribute at the major league level.  

The downside to this strategy is that even though the Yankees could compete in the AL East during this time period, they would likely not have the firepower necessary to win a World Series.  

Furthermore, this strategy places a large amount of pressure on a limited number of prospects to develop into quality major league ballplayers.  There's no guarantee that prospects will succeed at higher levels, and if none of these prospects develop, then the Yankees would be in an even worse situation than they are now.   

The second way the Yankees can rebuild is to fully commit to it.    

This would mean trading current veteran players to establish a larger pool of prospects.  

In this case the Yankees would look to shop Mark Teixeira, Curtis Granderson, Phil Hughes and possibly Robinson Cano or C.C. Sabathia. This commitment to rebuilding would be a drastic but smart move for the Yankees if they are truly concerned with meeting budget constraints.   

All of these players should warrant substantial returns in terms of prospects, setting the Yankees up well for the future. Certain free agents that fit the team’s needs could then be brought in to complement these young players.   

The problem with this approach is that the results are not immediate in any total rebuilding process.  The Yankees and their fanbase would have to accept watching a young team develop. This may be a tough change to swallow considering that the Yankees have qualified for the postseason in 17 of the last 18 years.  

And any potential drop in fan interest could cause gigantic issues from a business standpoint.  

In 2008, the Yankees built a $1.3 billion stadium and raised ticket prices to sky-high rates. Given the current prices, a total rebuilding process could cause a dramatic reduction in ticket sales and sharply hurt the Yankees' bottom line.  

Personally, I feel the only way the Yankees will engage in this total rebuilding method is if the team badly underperforms in 2013. It would take a 2012 Red Sox-esque crisis for the Yankees' front office to make such franchise-altering decisions, especially with so much of their profit at stake.    

Essentially, because of the faults in the Yankees' farm system, the fate of the Yankees in the near future depends on the extent to which Hal Steinbrenner is willing to empty his pockets.

If he wants to fill the current holes through free agency or trades, he still has the means to do so. 

But if he doesn’t, he will have to accept some sort of rebuilding phase.  

It’s also important to keep in mind that the Yankees will always have the financial ability to deviate from a rebuilding process even once it's started.   

For example, if Steinbrenner gets fed up with low attendance due to a young team, he can always go out and sign a bunch of free agents the following year. The Yankees can act like a small-market team trying to build its farm system and develop players, but still have the luxury of being the Yankees if it doesn’t work out.   

No matter what path Steinbrenner and the Yankees choose to take, it’s important for them to consider both the long term and the short term. 

My personal recommendation for the club would be to completely commit to rebuilding or spending to win now.

Taking a middle-of-the-road option will only lead to average results in the Bronx and a failure to improve the farm system.

Results that will make neither Steinbrenner nor the fans happy.   

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