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USA Today: Yankees pay $26 million in luxury tax

Posted by: Chad Jennings - Posted in Misc on Dec 01, 2015 Print This Post Print This Post | Email This Post Email This Post

Hal Steinbrenner

Over at USA Today, Bob Nightengale has the full story of this year’s luxury tax penalties. The Dodgers had the biggest bill, the Yankees had the second-largest, and only two other teams — the Red Sox and Giants — paid any luxury tax at all. Here’s Bob’s story, trimmed down so that it focuses on the parts directly connected to the Yankees. Go read the full thing with the link above:

The Los Angeles Dodgers will pay a record $43.7 million luxury tax penalty after finishing the 2015 season with the largest payroll in baseball history at $298.3 million, according to salary information obtained by USA TODAY Sports.

The Dodgers — who paid about $50 million to players who never appeared for them in 2015 — are one of four teams this season to be subjected to Major League Baseball’s “Competitive Balance Tax,” which started in 2011 and applies to teams that surpass a certain payroll threshold. The year’s threshold was $189 million. The other teams being taxed included the New York Yankees ($26 million), Boston Red Sox ($1.87 million) and San Francisco Giants ($1.33 million).

The luxury tax, which is due to MLB offices by Jan. 21, is based on payroll that is calculated as the average annual value of contracts for players on the 40-man roster, including $12.9 million in benefits, which also factors in all cash transactions in trades.

These four teams spent $935.75 million and yet none of them won a postseason series. The Dodgers and Yankees each reached the playoffs, but the Yankees lost their wild-card game against the Houston Astros, and the Dodgers fell to the New York Mets in the NL Division Series.

In fact, none of the the nine teams with the highest payroll won a playoff series. The Chicago Cubs, at $155 million, had the highest payroll of any team that won a series.

Perhaps this helps explain why the free-agent market has been so slow to develop this winter. The Detroit Tigers are the only team who has spent more than $40 million on a player when they signed right-hander Jordan Zimmermann to a five-year, $110 million contract.

“It might sound silly,” Tigers owner Mike Ilitch said at Zimmermann’s press conference Monday, “but I don’t care about spending money. I want to get as many good players out there as possible.”

Does that mean the Tigers will exceed the $189 million luxury tax threshold in 2016 after narrowly missing it this year at $181.7 million?

“I’m supposed to be a good boy and not go over it,” Ilitch said, “but if I think there are certain players that could help us a lot, I’ll go over it.

“Oops, I shouldn’t have said that.”

The Yankees ($241.15 million payroll), who for many years were the payroll kings until the Dodgers dethroned them in 2014, continue to shy away from pricey free agents, saying they no longer feel comfortable committing huge dollars to free agents who are over 30 years old.

“I’ve said it over and over, I shouldn’t have to have a $200 million payroll to win a world championship,” Yankees owner Hal Steinbrenner said last month. “It’s been proven over and over again, right?’’

Of course, the Yankees have some massive contracts expiring after the 2016 season, including CC Sabathia ($25 million, with $5 million buyout for 2017), Mark Teixeira ($23.1 million) and Carlos Beltran ($15 million).

“A couple of years from now, the payroll situation will be different,’’ Steinbrenner said. “I’ll have flexibility. We will be active on the free-agent market. But (now), I’ve got other options.’’

Associated Press photos

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