Yankees at Payroll Threshold, at Least for Now
By DAVID WALDSTEIN
Gail Burton/Associated Press The Yankees’ $189 million payroll does not include unsigned players, like Phil Hughes.
On the final day of 2012 the Yankees will coincidentally close out the year at a landmark position in baseball’s payroll standings, the sport’s own fiscal cliff, which will arrive before the 2014 season. It is a spot they expect to revisit again in one year, but for now they are only passing it by.
As of Dec. 31, 2012, the Yankees’ payroll was right at the targeted threshold of $189 million, give or take a few hundred thousand. According to Cot’s Baseball Contracts at BaseballProspectus.com, the Yankees have contractual commitments to 14 players worth $189,475,000. That includes Kevin Youkilis’s new one-year, $12 million contract and the $8.5 million they still owe A.J. Burnett.
But it doesn’t include technically unsigned players like Phil Hughes, Boone Logan, Joba Chamberlain, Ivan Nova and Clay Rapada, who are under the Yankees’ control but are either arbitration eligible or will have their contracts renewed for 2013. Once the Yankees come to agreements with those players, the payroll will rise, but it won’t affect their seemingly ironclad plan to be under $189 million for 2014, the year that significant luxury tax incentives kick in.
If the Yankees are over the $189 million mark for 2014, their luxury tax rate would soar to 50 percent (they are currently at 40 percent). If they are below it, the rate would plummet to 17.5 percent, and that could translate into potential savings of $50 million. Hal Steinbrenner, the Yankees’ managing general partner, has clearly stated his desire to be under the mark, which is why the Yankees have, for the most part, made only tepid advances in the free-agent market in the past two seasons.
Last year their payroll was listed as $209,792,900, but the loss of several players, including Nick Swisher, Russell Martin, Freddy Garcia and Rafael Soriano, who remains unsigned, has chopped roughly $40 million off the 2013 obligations.
The Yankees are committed to only four players for 2014 — Alex Rodriguez, Mark Teixeira, C. C. Sabathia and Ichiro Suzuki (Derek Jeter has a $3 million player option that is unlikely to be exercised) — but they add up to $81 million.
For the purposes of Major League Baseball’s luxury tax accounting, which includes prorated signing bonuses, the figure was $223.3 million — their highest ever — and they owed $18.9 million in luxury tax. According to The Associated Press, the Yankees have paid $224.2 million in luxury tax over the last decade. And people wonder why Steinbrenner wants to avoid paying even more.
EDB
SD Yankee Report 