I’m not entirely sure how I missed this since this came out last week, but it’s better to report it late than never, right?
The New York Yankees are one of six teams to pay a luxury tax this offseason, but surprisingly they don’t have to pay the most to Major League Baseball.
The Los Angeles Dodgers, Boston Red Sox, Detroit Tigers, San Francisco Giants and the Chicago Cubs are the other five teams that will have to pay a luxury tax to Major League Baseball. The Dodgers will have to cough up the most at $31.8 Million. The Yankees owe $27.4 Million, Red Sox owe $4.5 Million, Tigers owe $4 Million, Giants owe $3.4 Million and the Cubs owe $2.96 Million.
The Dodgers and Yankees both have to pay at a 50% rate since they are above the $189 Million threshold. This is the 14th year in a row the Yankees have paid a luxury tax fine since tax was implemented. The team vows to go under the $189 Million threshold by the 2018 season.
Major League Baseball added the luxury tax to prevent big market clubs from spending, and combined with revenue sharing, it helped small-market and middle-market teams compete with big-market clubs.
The Yankees current payroll rests at $224.5 Million, which is slightly up from the $223.6 Million payroll last season. However, the Yankees have names such as CC Sabathia, Alex Rodriguez, and if he opts out Masahiro Tanaka coming off the books next season. Mark Teixeira recently came off the books, but the Yankees added Matt Holliday and Aroldis Chapman this offseason. The team isn’t slated to make another move this offseason without a trade. But with no market for Brett Gardner, Chase Headley and Michael Pineda, it seems unlikely the Yankees will get under the threshold this offseason.
Luxury tax are to be sent into Major League Baseball by January 21st. The money from the luxury tax will be used to fund player benefits and MLB’s Industry Growth Fund. Starting next offseason, the money will also be used to fund players Retirement Accounts and will also be given to teams who are not over the luxury tax.