Yankees one of six teams to pay a luxury tax

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 SabathiaAlex 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 GardnerChase 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.

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8 Responses to Yankees one of six teams to pay a luxury tax

  1. Celerino says:

    Not a big deal to miss this story. Now when the Yankees DON'T pay the luxury tax, that will be a big news story.

  2. Balt Yank says:

    This luxury tax story would be more interesting if it analyzed the cause of Yankee payroll problems, bad free agent and renewal decisions, especially signing Ellsbury, extending CC, and extending AROD. It does not take nostrodamus to predict that signing the streaky, injury prone Ellsbury to a seven-year mega contract based on 1 excellent, ALL STAR year of performance and a few other scattered decent seasons, was a mistake from DAY 0.1. When AROD opted out, that was a good riddance moment. He has hit many 7th inning, we are already up, homers. When CC opted out, while he was a great pitcher for Cleveland and rock solid for us, it was time to look at his age and move on. The Yankees instead owe these guys 75-80 million last season and this season. I wonder if Ellsbury can be flipped next offseason for Miggy Cabrera? It's a mutual risk deal and could work. For us, he would DH until Age 41. Just a thought….

    • YankeezFan says:

      I gotta agree with you on the Ellsbury deal, as well as the McCann and Headley deal. All made in the same year, that was a knee jerk reaction to lower ticket renewals. I think Cabrera will probably end up like A rod and the Yankees would have to eat some portion of that contract over the last year or so, and if most Yankee fans believe Bird is the real deal then Cabrera blocks his development so I'm not a fan of that idea. If we could get a bag of balls and eat half of Els contract that would probably be the best scenario, so i doubt the Yankees would be able to justify moving him. Our best hope is to move Gardner, he's got the most value, and we have several players developing at AAA and made their first appearances last September, so we've got depth there. I hope that we could move Headley in September and see how Andjuar works out at 3rd base next year (assuming he dosen't have a regression year.) But our biggest worry next year, is gong to be starters, not position players, so what ever we do this year won't help unless we can clear the way for new starters, especially if Tanaka opt's out.

  3. hotdog says:

    It’s a good strategy to get under the tax threshold…if that happens, the team will not have to pay a luxury tax if they go above the threshold for several years…i don’t know the particulars but it gives the Yankees greater flexibility in spending…i’ve heard many Yankee fans saying “no more long-term contracts” but the fact is that it is one of the most important advantages a high cap team has…although it doesn’t guarantee winning, the Yankees will likely make big investments in free agents coupled with smart moves to keep the farm system in good shape…right now the team has a great opportunity in the next several years to work on getting our top prospects to the Bronx as well as adding key free agents as needed…i think Cashman has done a nice job engineering this transition…

    • Jerry says:

      They will get to start at the beginning of the threshold. They pay such an exorbitant amount because right now it's compounded every year they are over . They will still have to pay a luxury tax, every time they are over, but not as significant an amount , thus the reason to restart the clock…….. As for long term contracts, just give them to younger players, but I'm not inclined to give out a mega contract to say someone like Bryce Harper, 400 million for 10 years is insane and would eventually put us back in the spot we are trying to get out of.

      • YankeezFan says:

        Yea we already have an outfielder making an insane amount of money over the next 5 years that we cant move, don't need another one.

  4. YankeezFan says:

    Your missing a couple of points in your article. Gardner (25M over 2 yrs), Pineda (7M Abitration) are two players that have been discussed in trade talks. Holliday is added at a 1 year deal, so he may not be here next year, and since were talking about 2018, his contract is irrelevant. According to Baseball-reference the payroll sits at 193M, not 224M, and thats with all the arbitration cases added. I think you meant to say Ellsbury and Clippard are unmovable, not Gardner and Pineda. If you use the baseball reference estimate for 2018 its 130M, so they are on the right track at the moment. If they can move Gardner (12.5M this year), that would make the salary without bonuses about 180M. The new CBA has a luxury tax threshold of 195M, so that gives the Yankees about 10-15M of cushion. This salary cap is doable, but i doubt the Yankees will compete for the AL East this year again, and will have an outside chance to get a WC spot, without adding any starting pitchers, which is their most pressing need at the moment.

  5. Savanna Stein says:

    It’s definitely a good strategy to get under the tax threshold for the Yankees team. Many of its members after preparing their income tax returns won't pay that luxury taxes any longer.

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