Yankees Hit with $18 Million Luxury Tax Bill

The Yankees were one of only two teams that had to pay a luxury tax in 2010 and were hit with an $18 million bill, according to the Associated Press. They have now paid $192.2 million since MLB began the luxury tax in 2003.

Teams have to pay 40 percent on each dollar over $170 million and for luxury tax purposes the Yankees payroll was at $215.1 million. That was actually down from a payroll of $226.2 million in 2009 for which they had to pay a tax of $25.7 million. So in total they paid a total of $18.8 million less in payroll and taxes in 2010 than they did in 2009.

The Yankees were prepared to give Cliff Lee a seven-year deal worth roughly $150 million this offseason, but since missing out on him they don’t appear to be ready to spend that allotted money on payroll like many fans have hoped. So their payroll, currently at about $176.25 million before raises for players with less than six years of service time, should be cut back once again in 2011.

The biggest thing they could have left to spend on this winter is free agent pitcher Andy Pettitte who is still deciding whether he wants to retire or play one more season. He made $11.75 million in 2010 and will probably make about the same if he comes back in 2011.

Otherwise the Yankees probably don’t have any big dollar items left to add to the team. They’ll probably add one or two more relievers, one or two more bench players, and possibly even another starting pitcher, but none of those pieces are expected to come with big price tags.

Either way, with Pettitte or without, it appears that they’ll be spending less in 2011 than they’ve spent in 2010.

So what do you think? Are the Yankees just being smarter with their spending these days? Or are they being greedy and cutting payroll while they continue to charge more for tickets?

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5 Responses to Yankees Hit with $18 Million Luxury Tax Bill

  1. Mindkind says:

    Hopefully smarter. I say keep the payroll low and buld from within. I might be crazy but I would go with the kids in 2011. Spring Training competition for Starting Catcher between Jesus Montero and Russell Martin. Loser Becomes backup or goes against Cervelli. Cervelli is not 2010 bad folks, it was a bad year. Competition for rotation spots between Ivan Nova, Andrew Brackman, David Phelps, D.J. Mitchell and Mark Prior. I would fill the 4th and 5th spot of the rotation with the best two out of that group. Not just the one with the best stats but the one that shows the poise/stuff to make it in the rotation, example Phil Hughes developing the changeup. I would call up Brandon Laird late in the season give him a taste of the big club and then have him compete for the RF job in 2012. Better yet we move Arod to DH fulltime in 2012 and have Laird at 3B. This gives us youth/energy and gives us payroll flexibility. With more prospects and money better trades will be made during the July 31st trading deadlines. What do you think?

  2. Two things. Prior is not going to compete for a starting job. He's strictly a reliever for the Yankees. The other is that it's really not reasonable to expect much more out of Cervelli. His minor league numbers weren't anything to get excited about. He could be a decent career backup, but that is only if his defense picks up. What he showed last season was pathetic.

  3. Mindkind says:

    Oh ok didn't know about the Prior situation. I think it's smart for the Yankees to add him as a reliever, he might pull a Kerry Wood. Yeah what I meant with Cervelli is as a backup he won't be as bad as 2010. I don't think he is a starting catcher but I mean that he can still compete with the loser of the starting catcher competition for the backup role. Hey Rob where do you stand on the rotation? Do you want Yankees to trade the farm for a veteran or give the kids a chance?