So it's back to the drawing board for the Yankees, who tend to be in this situation more often than not -- with two World Series victories since 2000, there have been many more statements of disappointment published by ownership than ticker-tape parades down the Canyon of Heroes.
"Some years, obviously, we have more success than others, but you can count on us trying to stay in it to win it," Yankees GM Brian Cashman said. "That's the Steinbrenner philosophy, which is do anything you can to make sure that the team is competitive and the fans of New York have a belief that this team has a chance to do something special."
Cashman will be the public face charged with tweaking the roster to climb the final mountains for a 28th World Series championship, and with several bold-faced names now entering free agency, the team that manager Joe Girardi welcomes to Spring Training in February could look very different.
Further complicating matters is a directive from ownership to reduce payroll below the $189 million mark for the 2014 season, aiming to take advantage of luxury tax incentives provided by Major League Baseball's new Collective Bargaining Agreement.
While the Yankees still should have money to spend to field a championship-caliber team for 2013, the reduction figures to dent the ability to offer long-term deals to free agents, since the Yankees already are expected to offer an extension to Robinson Cano and could consider one to Curtis Granderson as well.
"We'll still do more than any other team would do to win, but at some point with the new rules it's going to become imperative to be a little more fiscally conservative," Yankees co-chairman Hank Steinbrenner told The Associated Press. "That's where we've got to rely on our young players, and we'll still be able to get players when we need them now and then."
In the winter of 2009, with the Yankees about to move into the new Yankee Stadium, ownership authorized a payroll blitz of more than $400 million that included big free-agent acquisitions like CC Sabathia, A.J. Burnett and Mark Teixeira.
Such a rush seems unlikely this year, so Cashman's best avenue of shuffling payroll may prove to be the trade market. Rumors about Alex Rodriguez help to sell newspapers, but seem unrealistic; still, Cashman is willing to pick up the phone and entertain offers, hoping that he'll run into something that makes sense.
Players can start signing with other clubs after midnight ET on Friday.
Free agents: Eric Chavez 1B/3B, Freddy Garcia RHP, Raul Ibanez OF/DH, Andruw Jones OF/DH, Derek Lowe RHP, Hiroki Kuroda RHP, Russell Martin C, Andy Pettitte LHP, Mariano Rivera RHP, Ichiro Suzuki OF, Nick Swisher OF/1B.
Eligible for arbitration: Joba Chamberlain RHP, Brett Gardner OF, Phil Hughes RHP, Boone Logan LHP, Casey McGehee 1B/3B, Jayson Nix IF/LF, David Robertson RHP.
Club options: Pedro Feliciano LHP ($4.5 million club option), Rafael Soriano RHP ($14 million player option, $1.5 million buyout).
Areas of need
Catcher: Martin is a free agent, and despite his disappointing offensive year, he could still command a multi-year deal on the open market. He has expressed a desire to stay with the Yankees, and Girardi is high on Martin's defensive ability.
Outfield: Swisher said that he "absolutely" would like to return next season, but the Yankees are unlikely to offer more than a one-year contract and Swisher could command multiple years as a free agent. Swisher provided balance as a switch-hitter who hit for power and worked walks, qualities the Yankees will look for in a replacement.
Two of the three outfield spots could be filled by Gardner and Granderson. Ichiro was a terrific midseason pickup and it would not be surprising to see the Yankees make him an offer to hang around, but they probably wouldn't do so for more than one year. It has been suggested that the Yankees could look into a Granderson trade to free payroll, though it would be difficult to replace his power.
Bench: Jones will be permitted to move on after his disappointing second half, and while Ibanez was a good signing, he's also 40 and entertaining retirement. Even if Ibanez plays, he won't represent the same great value he had coming off a down 2011 with the Phillies. Chavez had a strong year before going hitless in the postseason; a backup corner role seems to help him ward off injuries, so a return isn't out of the question.
Rotation: The Yankees could roll the dice and try to re-sign Kuroda coming off his good first season in the American League, or they may look at his age (38 in February) and innings (a career-high 219 2/3) and decide to move on, seeing that their $10 million investment worked out. Pettitte will enter his familiar dance with retirement, but if he pitches, you can be certain he won't come at the same bargain-basement $2 million price. Sabathia, Hughes, Ivan Nova and David Phelps give the Yankees a good head start here, but there are holes to fill.
Bullpen: Soriano is expected to opt out of his contract, and if Rivera decides to pitch, he'll be doing so at age 43 and coming off knee surgery, so the Yankees are unlikely to match his $15 million salary from 2012. Both situations mean, at the very least, the ninth inning is looking a bit unsettled.
The Yankees will continue to write some of the biggest checks in the game, having led the Majors with a $222 million payroll this year. The $189 million mark is a serious goal, but it isn't needed until 2014. The Yankees entered the winter with approximately $132 million already outlined on their 2013 budget, assuming that Soriano opts out. They'll likely sit in the $200 to $210 million range next year, which provides some cushion for raises to arbitration-eligible players and offers to new free-agent acquisitions.
Bryan Hoch is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.