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If there was any question as to the seriousness of the Yankees' prioritization for starting pitching, it has quelled with the acquisition of James Paxton well before the Winter Meetings.
Paxton markedly upgrades the Yankees rotation, and with an estimated $9 million salary for the 2019 season, there is plenty of payroll room for another addition to the starting rotation via free agency (think Patrick Corbin). Despite working in his age-30 season next year, Paxton has significant upside after setting several career-best marks in 2018.
Paxton's strikeout rate in 2018 (11.7 K/9) continued a sharp upward trajectory, which started in 2016. Although Paxton has not showed a great ability to be on the mound as often as desired, he's averaged 4.0 WAR over the last three seasons. If the Yankees manage to receive 180 innings from Paxton in 2019, he could easily rate as the No. 2 starter in the rotation, and the fact that he has one more season of control is a bonus.
There are some shortcomings concerning Paxton, including the lack of workload from year to year; he's averaged 139 innings over his last three seasons. Further, Paxton is a flyball pitcher, and while he will be pitching to the big side of Yankee Stadium, his increased home run rate in 2018 is cause for concern.
As for the Yankees moving Justus Sheffield, it was clear the organization was not very high on him as they passed on several opportunities to move him up to the big leagues during the summer. Once Sheffield received his promotion, the Yankees didn't bother using him in any high-leverage situations down the stretch.
The Yankees have a slew of right-handed arms, making Erik Swanson expendable with decisions to protect players from the Rule-5 Draft coming soon, and Dom Williams-Thompson is unlikely to come back and haunt the Yankees.