"Yankees, Mets are cognizant of luxury tax line" - MLB insider weighs in on Nolan Arenado's potential fit with New York teams

St. Louis Cardinals star Nolan Arenado is one of the more talked about names this offseason, after Yankee Juan Soto and NPB ace Rokie Sasaki. The multiple-time All-Star is heavily rumored to be on the way out of St. Louis, given his expensive contract clashing with the team's future plans.

On the Foul Territory podcast featuring MLB insider Andy Martino, the pundit discussed the prospect of Arenado finding his way to the Big Apple. Martino said that both the Yankees and Mets are very well aware of going over the luxury tax line if and when they wish to sign the third base star.

"Yankees, Mets are cognizant of luxury tax line," Martino said (12:24).

After an underwhelming year, at least by his high standard, Nolan Arenado is pegged to be shipped elsewhere for next season. Martino also explained that even though the Yankees and the Mets are big-spending teams, they won't jump the gun in bad contracts.

"They'd have to look at is the current level of production worth what's left in the contract. They try to avoid [expensive contracts] even though there are very rich teams. They don't generally just take on contracts that are considered "bad contracts." (12:19)

"When you're over the luxury tax and that top line that Steve Cohen line as it's been called, you're paying a little bit more than double on every dollar."(12:43)

The MLB luxury tax was set at $241 million for the 2025 season. At the time of writing, the Yankees are hovering at around the $200 million mark in terms of their payroll for next year without star Juan Soto. The Mets, meanwhile, sit at around $161 million.

Nolan Arenado is scheduled to receive $21 million next year, which means if the New York teams want to sign other premier stars this offseason, they would have to move assets to get the multiple-time Platinum Glover.

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Nolan Arenado's deferred contract

The Los Angeles Dodgers drew flak when they added two-time Cy Young awardee Blake Snell to their already superstar-caliber team. The organization has been criticized for their players deferring salaries on their contracts to make room for more stars to be signed immediately.

However, what Shohei Ohtani and Blake Snell have done isn't new at all. Hall of Famer Ken Griffey Jr. and even the infamous Bobby Bonilla's contracts had deferments that had them receiving money way after their playing days were over. Nolan Arenado for one, is a good example of this clause being exercised by teams and players in MLB.

When he signed an eight-year, $260 million extension with the Colorado Rockies in 2019, the organization thought that they locked down their star for the future. However, Arenado requested a trade and made his way to the Cardinals in 2021.

As he wanted to play for a contending team, Arenado elected that his contract not be paid in full and instead be deferred to 2021. That, in turn, gave the third baseman deferred payments of $2 million, which started in 2022 and will end in 2041, when he turns 50.