The Yankees would much rather have their ace healthy and ready for Opening Day, but with Gerrit Cole undergoing Tommy John surgery on Tuesday, they suddenly find themselves with an unexpected financial cushion. While losing Cole for the entire 2025 season is a devastating blow, the Yankees were smart enough to take out an insurance policy on his contract.
How Insurance Impacts the Payroll
Cole’s deal includes coverage that allows the Yankees to recover up to 75% of his $36 million salary for this season. That means they could get back as much as $27 million, a significant number considering their current payroll situation. However, since the Yankees are already over the final luxury tax threshold, every additional dollar they spend beyond it is taxed at 100%.
That essentially cuts their usable insurance money in half. Instead of having a full $27 million to reinvest, they effectively have about $13.5 million to allocate toward roster improvements without making any further financial adjustments.
Where Can the Yankees Spend?
With the sudden influx of cash, the Yankees have options. They could use it to acquire a pitcher to help stabilize their battered rotation or add another bat to reinforce the infield and designated hitter spot.
The preference would have been to trade Marcus Stroman, clearing a few million off the books and then targeting a player still in arbitration to keep costs controlled. But that’s not as easy as it sounds, and now, with Cole out and Luis Gil sidelined for at least three months, moving Stroman might not even be realistic anymore.
Injuries Are Piling Up Before Opening Day
Cole’s absence is just the latest setback in what has already been a brutal spring for the Yankees. Luis Gil was expected to be a key piece in the rotation but will miss at least three months with a high-grade lat strain. Giancarlo Stanton remains a question mark, with the possibility of elbow surgery still looming.
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The Yankees need reinforcements, and they haven’t even played a regular-season game yet. They have money to spend, but finding the right fit while dealing with the mounting injuries will be a challenge.