How much do the Yankees owe in luxury tax this year?

  • Tad Johnson

Since the MLB instituted a luxury tax on teams in 2003, no team has been scrutinized more over the taxes than the New York Yankees. With no salary cap in baseball, the Yankees have been freely spending for decades, often gobbling up prime talent with the lure of big contracts and the chance to put on the pinstripes. Still, have you ever wondered just how much of a luxury tax they’ve acquired since 2003?

This year, the Yankees were hit with a $28 million luxury tax bill, pushing their total past the $250 million mark since the penalty began in 2003. The next closest team in terms of having to pay the luxury tax is the LA Dodgers, who will foot a bill of $11.4 Million.

According to Fox Sports:

Figures include average annual values of contracts for players on 40-man rosters, earned bonuses and escalators, adjustments for cash in trades and $10.8 million per team in benefits.

Because the Yankees have been over the tax threshold at least four consecutive times, they pay at a 50 percent rate on the overage, and their $28,113,945 bill was second only to their $34.1 million payment following the 2005 season. The Yankees are responsible for $252.7 million of the $285.1 million in tax paid by all clubs over the past 11 years.

Could A-Rod's suspension help the Yankees financially? (Photo courtesy of SI.com)

Could A-Rod’s suspension help the Yankees financially?
(Photo courtesy of SI.com)

It’s a conclusion that most if not all baseball fans are aware of. The Yankees spend big money and in the words of some “buy” championships. The Yankees have a payroll that is over 8 times that of the Houston Astros. But the most sobering statistic would have to be that out of the 285 million dollars collected in luxury tax, the Yanks have been responsible for 252.7 MILLION DOLLARS of that? They may as well just re-name it the “Yankee Tax”. Hank Steinbrenner, Yankees owner,  said he hopes to get under the threshold next year, when it rises to $189 million. That would reset the team’s tax rate to 12.5 percent for 2015 and get the Yankees some revenue-sharing refunds.

Not so fast though.

Following agreements Tuesday on a deal with second baseman Brian Roberts for one year and 2 Million and a $7 million, two-year contract with lefty pitcher Matt Thornton, the Yankees are at $177.7 million for 15 players next year, when benefits are likely to total between $11 million and $12 million.
The only hope for the Yankees to try get below the threshold appears to be if an arbitrator upholds most of Alex Rodriguez’s 211-game suspension. This would relieve the team of a large percentage of the Rodriguez’s $25 million salary. So could the Yankees actually be hoping that their third baseman’s suspension is upheld for financial reasons?

 

What do you think of the Yankees and their plentiful spending habits?

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Tad Johnson

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