How should the New york Yankees cut their payroll?  

I see that the Yankees already got rid of Randy Johnson as they traded him to the Arizona Diamondbacks so they completed that part of cutting their payroll. I do not believe Steinbrenner believes in cutting payroll as he will continue to go out and sign the best and highest paid players. Matsui is getting old so I would keep Abreu if I were them. They should get rid of some other players as well and start building with their farm system. Just because you have all the best players doesn't mean success all the time. I am not a Yankees fan but I do think they should develop the players in their farm system.

Well, they already got rid of Randy Johnson. And they were lucky to get a couple of good prospects in return for Johnson. I think the next step would to be to renegotiate A-Rod's huge contract. He is so desperate to be accepted, he would probably do it.

On the plus side, there are no incentive clauses in any Yankee's contracts. Steinbrenner says they get paid so much they should not expect incentives for maing the All Star game, or pitching so many innings.

And while having Roger Clemens would be a good PR move, save the money and go get a low profile quality pitcher who is so eager to be a Yankee, he won't care if he is getting paid far less than another pitcher on the team.

Quit trying to buy the best at the moment and actually look for talent & cohesion.

First I would get rid of the obnoxious fans that come to the game. By the way they act it makes it harder on the player to perform. Makes him more tense and more likely to mess up. I'm not saying all fans are like that. And it is not just yankee fans. But the fan that throws things and uses obscenities towards players (especially around young children) shouldn't be allowed to be at the park.
No one will touch Jason giambi because of his involvement with steroids. As for A-rod, they had their chances to trade him at the begining of the off season but choice not to. The huge contract he has is a big obstacle in any trade. But I think the rangers are still paying part of it. A-rod's agent will not rengotiate the contract so that out of the idea.
The biggest problem is Steinbrenner himself. He always wants the best and what he just doesn't realize is sometimes the best doesn't work well together. You need to create a team that has chemistry, that can and will work well together. that knows their resposibilities on the team.
To me no ball player is worth 25 million dollars a year. That is stupid. Any owner that pays that much is just as stupid.