How Aaron Judge’s Record-Breaking Contract Affects the Yankees’ Long-Term

The New York Yankees made a defining decision back in the offseason of 2022, committing to Aaron Judge for the foreseeable future. Aaron Judge signed the biggest contract in New York Yankees history. Signifying that he is the face of the franchise and will be for a very long time.

While his impact on the field stands out above all, he provides a role that extends far beyond the final score. As the New York Yankees continue to navigate the offseason. Judge’s contract enhances how the Yankees shape their payroll and luxury tax strategy, and how they continue to construct their roster to win.

Judge’s most recent contract isn’t built on just production; it influences every major decision the Yankees make moving forward. 

How Aaron Judge’s Contract Shapes the New York Yankees’ Payroll

Aaron Judge signed a nine-year deal worth $360 million with an average annual value of $40 million per season. Judge has six years remaining on this monstrous contract. This contract currently has Judge among the top-earning players in the MLB, and ensures his salary will play a massive role in baseball for the remainder of the decade.

From a luxury tax perspective, this cost tends to matter more than the year-to-year cash flow. The MLB’s competitive balance tax is calculated using a player’s AAV, which, for the Yankees, means that Aaron Judge $40 million per season gets reapplied every season, regardless of how the contract is structured. This results in the Yankees’ evaluating every additional major signing or trade acquisition, such as the most recent Cody Bellinger signing. 

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How Judge’s Contract Shapes the Yankees’ Luxury Tax

This has affected the Yankees more than people realize. They have become more selective with who they spend their money and how they build their roster around Aaron Judge. Instead of stacking huge contracts on top of Judge’s, the front office has opted to sign short-term contracts, rely more on internal development, and have acquired more role players to complement their face of the franchise. With Judge’s contract being a part of the Yankees’ books for the next six years, it has been more difficult to sign players to long-term deals with a high AAV. 

When teams operate above the luxury tax, face increased financial penalties with each season they are over the MLB limit, which helps explain the Yankees becoming more conservative on how they use their money and resources. 

Why the Yankees Have Built Around Aaron Judge

Despite Aaron Judge’s contract constraints, the Yankees and many fans view Judge as a foundational piece to bring home their first World Series since 2009. Judge provides roster stability in an era where it seems as if stars moving has become common across the MLB. The Yankees’ front office has consistently referenced Judge’s leadership and presence as the face of the organization, as this has been confirmed throughout the years, with Judge becoming the first captain of the New York Yankees since Derek Jeter in 2014. 

Aaron Judge’s contract has built the Bronx’s championship window. The Yankees came close to winning the World Series in 2024, where they lost to the Los Angeles Dodgers in five games. Brian Cashman’s goal is to align the roster construction throughout Judge’s prime years, and not just have a competitive team with little to no chance of winning. This approach places a premium on surrounding Judge with the right pieces, rather than overlapping stars that bring the same talent to the Yankees lineup. 

The Yankees now have the opportunity to plan for years in advance, knowing that their star will be with the organization for the future. It makes it easier for the management staff to predict future payroll, as well as decide when the right time is to sign players, look for trades, and when to avoid buying players for the future. Aaron Judge has given the Yankees flexibility and his intent to win in New York. 

How Judge’s Contract Elevates the Importance of Player Development

Judge’s contract reinforces the importance of player development. Filling their roster with prospects that have been with the Yankees organization has become increasingly more important, as Judge’s deal plays a significant role in their payroll. Prospects that are taken in the draft are no longer expected to be depth players; instead, players that can contribute to their roster. This becomes essential to dealing with financials. 

The Yankees took a financial risk on Aaron Judge, which reflects a strategic choice. They have accepted the limitations and secured a franchise player, trusting that their development and roster changes will work out and keep them competitive throughout the remainder of the contract. 

As the offseason continues, every Yankees decision will be traced back to Judge’s commitment. Judge is not only the centrepiece of the lineup, but the financial piece around the Bronx Bombers’ long-term plans.