BALTIMORE, MARYLAND – SEPTEMBER 19: Aaron Judge #99 of the New York Yankees jogs to the dugout at the end of the fourth inning during a game against the Baltimore Orioles at Oriole Park at Camden Yards on September 19, 2025 in Baltimore, Maryland. (Photo by Brandon Sloter/IOS/Getty Images)
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The New York Yankees have taken a conservative approach this offseason — at least when compared to some recent free-spending winters in the Bronx — but that hasn’t done much to help their tax bill.
The Yankees are set to return next season with largely the same roster as last year’s, with outfielders Trent Grisham and Cody Bellinger returning on new contracts. Grisham accepted a one-year qualifying offer, while Bellinger signed a blockbuster $162 million deal that includes several opt outs.
Bellinger’s contract pays him $36.5 million in annual salary but, thanks to some of the details of the existing collective bargaining agreement between Major League Baseball and the players association, the Yankees will be paying much more than that on their luxury tax payroll — the actual amount the team is paying because its total payroll is above MLB’s penalty threshold.
New York Yankees’ New Star Will Really Cost $48.55 Million Nex Year
In addition to the tax penalty, the Yankees will be charged a “true up” fee on Bellinger’s contract from last year, plus a “valley charge” because of the front-loaded nature of his new deal, according to the New York Post’s Joel Sherman.
“There are intricate rules in the collective bargaining agreement that have a near poison pill type impact for the Yankees when it comes to Bellinger,” Sherman wrote. “Thus, Bellinger will count as $48.55 million in total for the 2026 season for luxury tax purposes.”
Notably, this brings the true cost of bringing Bellinger back for next season above the cost for franchise slugger Aaron Judge.
“Cody Bellinger will cost the Yankees more toward the luxury tax payroll in 2026 than Aaron Judge — a lot more,” Sherman added. “Judge — the highest paid Yankee ever in total dollars and annual value — costs $40 million each year for luxury tax purposes.”
New York Yankees Could Be Done Adding After Cody Bellinger’s Luxury Tax Cost
The post-tax costs of their star veterans, like Judge, Gerrit Cole and Giancarlo Stanton, along with the addition of Bellinger, could explain things if the Yankees decide to open next year without any high-priced additions. General manager Brian Cashman alluded to the existing costs earlier this winter as he described the team’s strategy.
“We’re an aggressive franchise, but while being aggressive, we already have some very large commitments, and the more of those you have, the more it affects you in other areas,” Cashman said, according to The Athletic’s Chris Kirschner. “And so everything’s tied together.”
In terms of overall value to the team, Judge’s contract is easily the best deal on the Yankees’ books. But Bellinger played a key role in the team’s postseason run last year and, even though the true cost of bringing him back is high, the Yankees might have felt they had little choice but to grant him a major salary in an otherwise quiet offseason.