Feb
23

Breaking down the payroll, part four

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"Can you believe those M-Fers called us cheap?" (REUTERS/Steve Nesius)

Now that just about all of the Yankees’ offseason business has been addressed, we can take one final look at the team’s (approximate) payroll for the upcoming season. A lot has happened since we last checked in, most notably the Eric Chavez and Raul Ibanez signings. Brett Gardner, Russell Martin, and Boone Logan have since avoided arbitration as well, and yesterday the Yankees added David Aardsma for good measure. Here’s a look at the team’s commitments for the 2012 season…

The money listed is in terms of average annual value, which is what is used to calculate the luxury tax. The players’ actual salaries are slightly different in some cases, but nothing crazy.

All told, that gives us $205.05M for 25 players, three of whom will contribute nothing to the team this season. Joba and Aardsma are going to be out until midseason, so that $205.05M is filling 20 roster spots on Opening Day. The other five spots will go to guys making the league minimum — Ivan Nova, Michael Pineda, Eduardo Nunez, Frankie Cervelli, and a mystery reliever — so that adds another $2.5M to our grand total ($500k each). The projected Opening Day 25-man roster will cost roughly $207.55M.

The remaining 15 players on the 40-man roster will cost less than the league minimum since they’ll earn a different salary in the minors, but let’s conservatively estimate their salaries at $500k each and $7.5M for the group. The brings the approximate cost of the entire 40-man roster to $215.05M. In reality, those last 15 players will end up making something like $4-5M combined, if that. Add in player benefits  — which are typically estimated at $10M and count against the luxury tax — brings us to a $225.05M payroll for luxury tax purposes. Last year the team was taxed on a $212.7M payroll, so at least we’re in the ballpark. This year’s luxury tax penalty would be $18.82M or so.

Had the Yankees kept Burnett and instead used him as that last mystery reliever, the luxury tax payroll would have been $229.55M assuming they would have still signed Ibanez, Aardsma, and Chavez. I don’t know if /how much the Yankees have in reserve for a potential trade deadline addition, and chances are they don’t either. That’s probably one of those things Brian Cashman brings to Hal Steinbrenner on a case-by-case basis. The roster is pretty much set right now though, barring injury or something completely unexpected. I don’t anticipate any significant changes to the 25-man roster or payroll through the rest of Spring Training, and this year’s Yankees figure to be the most expensive baseball team in history.

Categories : Analysis
  • Andy in Sunny Daytona

    If A Rod hits 31 homers, he gets a $6M bonus. For payroll tax purposes, is that spread over the length of his contract, or does all the money go on this years payroll?

    • Needed Pitching

      normally bonuses count in the year they are earned
      not sure if ARod’s are counted the same because technically they are marketing bonuses instead of performance bonuses, but I’d imagine it would be the same

  • Murderers’ Row Boat

    It will be interesting to see which way the front office goes after 2013. As of right now there is $73 million locked up for 2014, but that’s only in three players. I could see them trying to do a lot of Matt Moorse-type deals with their young pitchers/position players.

    • JoeyA

      This is a great point to bring up.

      If the Yankees organization wants to get under $189M for 2014 and practice financial austerity moving forward, they need to change their “no new contracts until FA” rule, starting w/ Robinson Cano.

      I believe RAB already brought this point up, but, IMO, its a stupid rule. Best example is Cano.

      Lock the guy up now before he has another monster season and thinks about testing FA.

      • Steve (different one)

        I think it’s the opposite. Once you give those guys guaranteed money, the AAV counts toward the 2014 austerity budget instead of the single season pre-ARB numbers. Economically, it makes sense, but in context of the $189M goal, it works against you a bit.

        Also, it is funny you mention Cano in reference to the “rule” of not extending guys early considering the team already violated this supposed policy….for Robinson Cano. Remember? So they obviously don’t have any hard and fast “rule”, they just haven’t had any obvious candidates to do this with. Hopefully that changes soon.

      • Murderers’ Row Boat

        The problem is they kind of did this with Cano a few years ago, but instead of buying out free agent years, they only got his arbitration years. Take a kid like Pineda and sign him to a 6-7 year deal with $40 million with club options. If the Big B’s come up an pitch well next year, give them both a Matt Moore contract.

        Just because you can spend $200 million a year doesn’t mean you have too.

        • JoeyA

          You’re both right, I forgot they did this, but they still only bought out his arbitration years.

          IMO, theres a few guys who it would make sense to extend if they produce to expectations: Pineda, Gardner, Nova

          I dont know what type of contracts these guys should receive if their 2012 is like their 2011.

        • Steve (different one)

          Not true. They got 2 years of FA. Cano would have been a FA after 2011 season.

          • Murderers’ Row Boat

            Yeah, I looked it up on Cot’s right after I posted that.

        • Tyler

          There is absolutely no reason to lock up Pineda right now to that kind of money. He’ll make the league minimum the next two years. If he pitches as projected, then you think about buying out the arb years and maybe some FA years. But Cash should stand pat and see what the kid does. Remember hes a pitcher they can be injured at any time and the Yanks are not in the Rays position financially where the Rays, as we all know, are more or less forced into doing deals like the one you suggest for Pineda.

        • Robinson Tilapia

          Holy Christ, that is a bad idea. I agree you don’t wait until his arb time is up to lock him up, but that’s beyond jumping the gun. The gun hasn’t even been put down on the floor for you to jump over it yet.

          • bkight13

            I don’t think “jumping the gun” refers to actually jumping over a gun on the ground. Pretty sure it refers to a false start before the starter’s pistol is fired. Just having fun with you.

    • JoeyA

      As an aside, I also become extremely bitter every time I’m reminded of the Evan Longoria deal he signed with the Rays. How did his agent/ MLB Labor Union allow that deal?

      6yrs/$17.5M w/ 3 TEAM options for ’14-’16, which could bring total contract to 9yrs/$44M

      Could you imagine the face of your franchise, perennial all-star signing that deal? I’d be happy if Brett Gardner signed that deal.

      • Murderers’ Row Boat

        Because no one knew what kind of player he was going to be. Say he had blown a knee or a shoulder the year after signing that deal and he was never the same. It would be a good deal for Longoria and a bad one for the Rays. They couldn’t have made that deal at the end of 2008, much less at the end of 2009. That deal was “Let’s lock him up after two games and hope we are right”

        • JoeyA

          I’m not well-versed on his scouting prior to coming up, but I think they had a good idea he’d be a star.

          Would you have been against locking Cano up 2 years ago to this deal? I know I wouldnt have.

          To your point, even if he blew out his knee or shoulder and sat out the next year, that contract is still great for the Rays. We are talking NINE years!

          He could be a bust for the first 3 and produce to his abilities in the remaining 6 and it would still be a steal for the Rays.

          Also, keep in mind, the last 3 years are TEAM options, so if he was a complete bust, which I think the Rays org knew he wouldnt be, they could still decline those options, thus getting him for 6yrs, 17.5M, or a little under $3M/ year.

          The Yankees wanted to pay Feliciano $4M to be a LOOGY.

          • Murderers’ Row Boat

            They signed Longoria several games into calling him up. His first game was April 12th, 2008. He signed the deal April 18th, 2008.

            They took a risk, however slight it seems now. Cano had three full years of service time before they signed the deal. A similar deal would be if the Romine broke with the club this spring and the Yankees signed him to a six year deal the second week of April. Both are/were 22 and both have unproven upside at positions that are tough to find good defense/hitting combos.

          • Slugger27

            cano 2 years ago is not the same as longoria one week into his mlb career. the rays had a pretty good idea he’d be a great player in this league, but cano 2 years ago was already an established star.

  • Steve (different one)

    The most expensive team in history? This cheapskate penny pinching would never happen if George was still alive.

    • Murderers’ Row Boat

      That’s a good thing. Think of all the money wasted on guys who were past their prime or never had one. The Yankees finally have the three things you need for long term winning; a good player scouting/development, dispassionate analytics, and the ability to sign any free agent they want.(In terms of having the money to do so.)

      For so many years in the 1980′s the Yankees just had money. Then in the 1990′s we had all three. Then the Boss got back into deciding who the team needed. I loved Mr. Steinbrenner’s willingness to win and the do it at all cost way, but not his pension of tooling around in direct baseball operations ala Jerry Jones.

  • Jeff

    Mike,

    Last paragraph, I think you meant “had the Yankees kept Burnett”

  • Commerce

    I’d rather watch cement harden…how is it one can’t take the “fun” out of fungible?

    • DM

      I think the Yankees watched Cement Harden and decided to sign him to a major league contract. They were interested in his brother until he blew out his shoulder again.

  • Ed

    Minor nitpick – either Jeter or Marte’s number is wrong. I think it’s Marte’s. Jeter’s AAV includes the value of his buyout during the life of the deal while Marte’s is being counted after the fact. Money never gets taxed twice for the luxury tax.

    My understanding is that you’re supposed to count all the guaranteed money, including a buyout, when calculating the AAV of the contract. That’s all taxed during the guaranteed years. If an option is declined, the buyout doesn’t count against next year’s payroll as its value was already taxed during the deal. If the option is picked up, only the difference between the salary and the buyout counts against the tax.

    Bonus of how that plays out – if Jeter picks up his 2014 option, he’ll essentially have a $56m/4 contract ($14m AAV). The option year frontloads the luxury tax, so it’s $51m taxed in the first 3 years, but only $5m taxed in 2014.

  • I am not the droids you’re looking for…

    $189mm is going to be ugly for 2014. Seems like keeping both Cano and Granderson would be next to impossible, UNLESS they essentially fill out the rest of the not-otherwise-filled roster spots with league minimum jetsam.

  • steve s

    Other than replacing Grandy, Swisher, Kuroda and Soriano/Mo with current minor league talent that makes it big I don’t see how the Yanks can figure out a way to drop $40MM in payroll by 2014 and still maintain equivalent on-field talent. Sounds like the magical $189MM number is a bogeyman to refer to for future contract negotiations but in reality is simply not doable.

    • Jeff

      A-Rod, so painful

      • Murderers’ Row Boat

        The A-Rod Deal: The Last of the Boss Deals.

        The Soriano deal was kind of like that too. If you take away the money from that deal, they are under $200 million this year and almost under $100 million for 2013. Plus a 2011 draft pick richer.

        • RetroRob

          If you mean the Boss, the current A-Rod deal is on Hank Steinbrenner, not George.

          The original A-Rod contract, that George assumed from the Rangers in the Soriano trade, was tremendous. With the Rangers kicking in money, the Yankees were only paying about $16 million a season for peak A-Rod. Now under Hank’s deal, they’re paying $27.5 million for declining A-Rod.

    • Dan

      I think its definitely possible that they get under the 189 because there are going to be some minor leaguers that will get their chance by 2014 and will be under contract at reasonable prices, especially bullpen arms (like Montgomery) that can replace Mo and Soriano. One player you did not mention was Jeter, who will either be playing for 8 million (lowering his AAV) or retire in which case Nunez may take over there. I think there is a chance that they don’t resign Granderson in favor of having a stop gap for a year until Mason Williams is ready (depending on his progression this year and next)

      • steve s

        I agree that the Yanks have a shot at sufficient replacement talent from their current minor league system but we are really looking at the need for a new “core 4″ to rise to the top by then and I’m just not sure it’s realistic for any organization to get that lucky twice in a generation.

        • Dan

          As long as they are winning, I don’t see a real need for a new “core 4″. I think we have started to see newer Yankees mixing with the core group (ie. Cano, Nova, Robertson) and more new players will mix in with them (ie. Williams, Banuelos).

  • Monterowasdinero

    So does ARod end his career gra$efully?

    • fin

      Hmm, A-rod seems to love baseball, really loves being A-rod the baseball player, and thats a lot of money. I dont see him giving it up, even when hes a shell of the player he was.

    • RetroRob

      How many players actually walk out on their guaranteed contracts when their skills start to fade? I’m not talking about players like Mike Mussina and probably Mariano Rivera who walk away from the game when they could sign a new deal (even though that’s a rarity), but players who just walk away in the middle of a contract?

      Is A-Rod going to walk away from the last three years of his contract so correct the Yankees mistake? Nope, and nor should he. It’s doesn’t even have to do with the money. Most players have the uniforms ripped off them, and there’s nothing wrong with that.

    • Robinson Tilapia

      By showing he gave it his all until the end, regardless of results? Yes. By earning those final years of salary with his numbers? Probably not.

  • RetroRob

    The Yankees high mark is $222.5 million in 2008, so this does figure to be the most expensive team ever, which highlights a problem.

    I’m assuming the $189M target for 2014 is fully loaded, meaning it also includes benefits (otherwise the target is approximately $199 million). Since the team is at approximately $225 million for 2012, they’ll need to cut out a little more than $36 million to hit the 2014 target. I’m not sure how they’re going to do that.

    While the luxury tax has clearly slowed the Yankees payroll growth over the past eight seasons (it’s basically flat), they have not shown any inclination to decrease it, seemingly instead waiting for the yearly increases in the threshold limit to eventually reach their payroll. MLB seeing that no longer have automatic increases, and indeed have capped it at $189m. MLB wants to keep the Yankees payroll growth in check (something achieved years ago), but they also want the Yankees to pay the tax. They do not want the Yankees to fall below $189M, and it’s likely that if the Yankees do this then they’ll MLB will then try and lower the threshold in the next CBA so the Yankees are reguarly above it.

    The Yankees have paid more than $200 million in taxes. If the Yankees stop paying that tax, then MLB will need to find that money elsewhere.

    • Rainbow Connection

      The Yankees are victims. Sob. Sob.

    • Jeff

      Hey, look on the bright side, we are only 25 million away from 1/4 of a Billion dollars!

  • UYF1950

    Mike, I believe you are mistaken in at least 2 players and their luxury tax implications for the Yankees payroll.
    Cano’s AAV for luxury tax purposes is $8.8MM (5yrs/$44MM) NOT $14MM
    Granderson’s AAV for luxury tax purposes is $7.5MM (5yrs/$30.25MM) NOT $10MM as you stated above.
    Swisher’s AAV for luxury tax purposes is $6.2MM (6yrs/$37MM)NOT $10.25MM as you stated above.

    Just those 3 players make your total off by almost $12MM. I believe the closer number to the actual payroll (all inclusive of everything (incentives, benefits, rounding out the 40 man roster, etc… is closer to $210MM.
    Which by the way is about $2.7MM less the the luxury tax number their 2011 payroll was calculated on.

    • UYF1950

      Sorry, first sentence should say: “… I believe you are mistaken in at least 3 players…”

      Sorry about that.

    • RetroRob

      No, I’m sure he’s correct. The Yankees had options on all those players, and options are treated as new contracts.

      • UYF1950

        I think you are mistaken. Options when they are picked up are considered part of the original contract.

        But even if we assume you are correct and I don’t think that’s the case. The only one of the 3 that had an option for 2012 is Swisher. Both Cano and Granderson’s 2012 seasons are part of the contract before the 2013 season kicks in (2013 is the only year the Yankees have options for Cano and Granderson) according to baseball reference.

        • Sweet Dick Willie

          It is my understanding that the buy-out is part of the original contract, and thus calculated in the AAV.

          Swisher’s deal was 5/$26.75, plus a club option, with a $1 million buy-out.

          So for the 1st 5 years, the AAV would have been $5.55M (26.75+1.0/5).

          Since the option was picked up and the buy-out was already taxed, Swisher’s salary subject to the luxury tax in 2012 is $9.25M ($10.25 less the million already taxed)

          Unless I’m missing something.

          • UYF1950

            Here is a very good example of the explanation of the club option being calculated as part of the “original” contract and NOT as a new contract.
            Here is the notes on Lackey and his option year and the reference to the luxury tax AAV.

            “So that 2015 club option at the league minimum will vest, turning Lackey’s five-year, $82.5 million contract into a six-year, roughly $83 million contract. For luxury tax purposes, that reduces Lackey’s average annual value from $16.5 million to $13.8 million, giving the Red Sox greater flexibility and possibly saving them money.”

            Here is the full link:http://www.mlbdailydish.com/20.....hn-surgery

            Like I said before it seems the option years are considered part of the players original contract.

            • Sweet Dick Willie

              If the option year salary is considered part of the original contract and the option is declined, does the club get a credit against the luxury tax that year?

              It would seem easier just to count all of the guaranteed money as part of the AAV and then deal with the options if and when they are exercised – which is my understanding of how it actually works. But I could be wrong.

              • UYF1950

                Yes they do. The luxury tax is kind of a floating number.
                It may be easier as you say in your example. But I don’t think anyone can accuse MLB of doing things the easy way. Just just the way MLB does things.

              • Needed Pitching

                you’re correct, at least in terms of normal club options exercised at the conclusion of the guaranteed years

            • RetroRob

              Hmmm, interesting. I originally figured the vesting option might be treated differently than a club option, but I just found this mention on a Red Sox blog regarding Scutaro:

              “Scutaro’s salary on the payroll counted for $4.67 million for the previous two seasons on the payroll instead of the $6 million he was actually receiving. When Boston picked up the club option, that changed the terms of the overall deal to three years and $18.5 million. The pied piper came calling to Boston to make up for the lower luxury-tax figures in 2010 and 2011, putting Scutaro’s 2012 payroll figure at $7.67 million.”

              Full link: http://firebrandal.com/2012/01/page/2/

              I can’t assume another blog is correct because this runs counter to what I’ve read in other places, but it’s now an open question.

              Perhaps Mike can provide some clarity.

              • UYF1950

                I think you will find we are right. And Mike is wrong in his calculations.

              • Needed Pitching

                Both the Lackey and Scutaro situations are treated differently than the Cano and Swisher situations
                Lackey’s option comes into play and will begin being included in the calculations because the injury causes the option to be guaranteed during the term of the original contract. Both Cano and Swisher’s contract options were picked up after completion of the guaranteed portion of the contract
                Scutaro had a player option that was considered guaranteed as part of his original deal, and thus lowered the AAV of the original deal, which Boston would now have to make up for underpaying for the first 2 years, Cano and Swisher have no such issues

                According to the last CBA (haven’t seen the full new CBA released anywhere yet)

                ““Club Option Year Value” shall be the Salary attributed to a
                Club Option Year under subparagraph (i) above, plus any
                potential bonuses (other than Award Bonuses) attributable to that Year, minus any Option Buyout that relates to that Club
                Option Year.”

                So Swisher and Cano would count for the option year value less the option buyout (because tax was already paid on that because the buyout is considered guaranteed money in the original deal)
                So Swish, 10.25M – 1M buyout = 9.25
                Cano, 14M – 2M buyout + 2M buyout for next years option = 14M
                Granderson is in the last guaranteed year of his 5 year/ 30.25, so would count for the 6.05M AAV

            • Ed

              Here’s what’s missing in that. All money in a contract gets counted against the luxury tax once. They never recalculate past years. Lackey’s AAV changes when the option is exercised, it can only effect the value going forward.

              Lackey played 2 seasons of his 5 year deal. They’ve already been taxed on $33m of the deal. That’s done and out of the question. They haven’t picked up his option yet, so let’s assume the contract says something like he has to spend 1 year on the DL before the team can pick it up. This season will be played without the option, so that’ll be 3 years, $49.5m for the tax. That’s final and can’t change.

              If the Red Sox pick up his option after the season, his contract becomes 3 years, $33.5m (the remaining 2 years, $33m + 1 year, $0.5m minimum salary). For those 3 years, the tax hit will be $11.17m.

              Option years can’t go off the overall AAV or you end up with tons of ways to game the system and avoid taxes. Imagine signing a player to a 1 year, $1m deal with a $19m player option. It would essentially be a 2 year, $20m contract, but it would count against the tax as $1m the first year and $10m the second. You’d end up with a $9m deduction against the tax.

              • UYF1950

                Bottom line, is in the case of Cano, Swisher and Granderson their team options are part of their overall original contracts and not considered new contracts for the purpose of MLB’s luxury tax calculation. Which brings us back to my original post that Mike figures are incorrect.

                • Ed

                  No it’s not. That’s directly opposite what I just said. This would fall under that last part I mentioned – you’d be gaming the system horribly if it worked like that.

                  • UYF1950

                    We’ll see. If I’m correct when the Yankees 2012 luxury tax bill come due late in 2012 or very early 2013. If I’m right the Yankees luxury tax bill as of day is going to be based on a team payroll of about $210 to $212MM. If you guys are correct it should be based on about $222 to $225MM. Is that a correct assumption of your numbers for 2012?

                    I figure the Yankees luxury tax at about $14MM +/- based on my numbers. Based on your higher number it should be about $19.3MM +/-

                    • Needed Pitching

                      it would be tough to base it on the final payment, because we are not privy to benefit costs to make that calculation
                      As, Ed pointed out, all money eventually counts against the luxury tax
                      The old CBA (can’t find a post of the new one yet, but I see no reason why they would change this) expressly states that for club option years, the players salary that year is counted as the value of the option minus any buyout (which would have already been included in guaranteed portion of the original contract)

                • Bryan

                  The Lackey contract is different since the option already vested, thus becoming a part of the contract going forward, as Ed said.

                  The ’13 options for Cano and Granderson have yet to be exercised, and it is likely they will only be exercised after the end of the ’12 season, which is when their original contracts expire. The ’13 options will essentially be a one year contract for tax purposes, and therefore taxed at face value.

                  • Needed Pitching

                    true, except the buyout price is already guaranteed and taxed, so it would count next season as option value less the buyout price

                  • UYF1950

                    My friends, I think you are wrong. With all new contracts which you are claiming the option become teams have always required the player(s) to pass physicals. Have any of you ever heard of the Yankees requiring the players to take and pass a physical when they exercise that option? Because I haven’t. Swisher’s 2012 option was exercised at the end of the 2011 season he never took a physical. And the same applied for the other players.

                    • Needed Pitching

                      and none of that is relevant to how the CBA determines luxury tax payroll
                      It’s all based on guaranteed money, and club options don’t become guaranteed until they are exercised

                    • Ed

                      Luxury tax is an accounting issue specified by collective bargain. Physicals are a team policy.

                      But if you want to go down that route, they actually do take a physical before the option is picked up. All of the teams have their players take an end of season physical. I’m not sure if it’s just for players under team control past the current season or if free agents are included as well.

            • Needed Pitching

              options count when they vest, the Lackey option will come into play because it will vest as a result of his DL time this year

      • UYF1950

        I beg your pardon. All 3 players had 2012 options that the Yankees picked up not just Swisher.

        But I still stand by my original comment that the option is considered part of the original contract and not a NEW contract.

        • Sweet Dick Willie

          According to Cot’s, the Yankees exercised their options on Swisher and Cano on 10/29/11, but Granderson is in the final year of a 5 year contract.

          The Yankees hold a club option for the 2013 season for Curtis.

        • Needed Pitching

          according to the language in the last CBA (I haven’t seen the full new CBA released anywhere yet), only guaranteed money counts in the AAV calculation
          In Swisher’s case, his 5 Year/ 25.75 guaranteed contract would have resulted in a 5.35M AAV before this year, his AAV this year would be the 10.25M option price less the 1M buyout already counted as guaranteed money in the first 5 years, so 9.25M this year
          Granderson isn’t in an option year, he is in the last year of the originaly 5 year/ 30.25 contract, so he would still count for the 6.05M AAV this season
          Cano is in the first of 2 possible option years, he would count for the 14M option price, minus the 2M buyout for this years option included as guaranteed money in the original contract, plus the now guaranteed 2M buyout of next years option, for a net of 14M

        • Carl

          Your wrong, only guaranteed money counts towards the AAV. Options are not GUARANTEED.

          Mike is way off with his 40 man estimates. 1st off, minor league contracts barely are for more then 20K a month x 6, as in a split contract. Only ACTIVE time counts towards the luxury TAX. If the equivalent of 2 players hang around all year, then at MAX it’s 1 Million added, not 7.5 Million. Any additional costs of the 40 are billed at year’s end and are included in the 10 Million dollar (Estimate)CHARGE.

          Truth is, the Yankees have had thier luxury TAX bill decrease the last couple years and will be around the same numbers (As this past year)come year end.

          • Needed Pitching

            they’ll at least be a little bit higher, and potentially relatively substantially higher depending of bonuses earned

            for last year, I believe their luxury tax payroll was about 196M including 25-man roster, 60-day DL players, Brackman (because he made substantially more than typical 40-man roster players) and performance bonuses – and not including the rest of the 40-man roster or benefits

            for this year, it appears they would already be about 201M+ for 25-man roster, plus 60-day DL (Joba, Feliciano, Aardsma)

            Potential performance bonuses can add over 12M to that baseline

            And the tax rate increases to 42.5% for this year, so unless they shed additional payroll, their luxury tax bill will definitely go up

            • Carl

              The Yankees were at 216 Million last year. Not 196 Million. They had an opening day payroll of 205 Million. http://sports.espn.go.com/espn.....id=7381589

              And the new CBA http://bizofbaseball.com/index.....;Itemid=42

              Fact is, their luxury bill be be a lot less then Mike’s estimates unless they do some major changes in-season.

              • Needed Pitching

                the payroll figures you linked to are not luxury tax figures and don’t use AAV

                I’m not sure why you linked to the CBA stuff, but it’s a summary of changes, not the actual CBA anyways

                The 196M figure I referred to was the luxury tax purpose AAV of the 25-man roster, plus bonuses, plus 60-man DL players, and Brackman. Several players earned more than their luxury tax AAV last season, which is how there is a big difference between the espn article you linked to and the Yankees actual number.

                The final this year is already at about 201M just for the 25 man roster and 60-day DL players
                40-man roster and benefit costs added about 15M last season, and will likely be at least slightly higher this season, so minimum, their luxury tax payroll will be about 216M, before any bonuses, which could add 12M+ to the total, without any additions
                There final # will be min. about 216, and with no changes, can max about 228M, resulting in a luxury tax bill in the 16M-21M range, without any acquisitions

  • CJ

    Suppose they miss the mark in pursuit of $189, say 192. How much do they lose? If they can’t get under 189 do they bother trying?

    • RetroRob

      I believe they would pay a 50% tax on the difference between $189 and $192. So three million difference, 50% tax, means they’d have to kick in $1.5 million. Not enough for the Yankeed to try and get under, although they would also have the rate their taxed lowered to 17.5% the following year. Once again, though, that’s probably not enough to incent the Yankees to try hard to get under the luxury tax.

      The new CBA recognizes there is little incentive to get under the luxury tax, so for the first time it provides relief on, I believe, the revenue sharing side. That’s where the Yankees can make back tens of millions of dollars. Don’t have the exact numbers on it, although RAB did a posting on it a few months back. It’s substantial enough for the Yankees to try and do it.

      • Plank

        The Yankees would only get refunded 50% of the portion that goes to the teams in the 15 biggest markets (Only the Nationals). Even with that incentive thrown in, it still doesn’t seem like it would be enough to slash payroll like they say they are planning.

  • mt

    Sounds like we need a post on luxury tax calculations would be great using soem current Yanks (Jeter, Cano, Swish, Grandy) as examples with different option profiles.

    The 2014 Jeter Option has been described several different ways whnever this topic comes up and I am still not sure how it will/should be treated.

    Thinking of this $189 million number makes me think that Yanks will not sign a high priced closer but work from within (hopefully, Robertson) in 2014. I would try to use Soriano in 2013 (holds down Robertson value in 2014 and also better to be the man who follows the man who follows MO) – don’t feel strongly but if we are paying Soriano closer money in 2013, why not try to use him?

    Only kink is if Soriano performs poorly. I guess we then would have Robertson in reserve.

  • bkight13

    Looks like they have around $85M coming off the books in the next couple years. That’s losing Jeter, Mo, Swish, Kuroda, Garcia, Burnett, AJones, Soriano and Feliciano. Getting to $189M should be pretty easy if half the young guys pan out. And I do think resetting the luxury tax down from 50% is worth the effort.

    • Dan

      I agree that they can do it, but I don’t think it will be that easy. You have to keep in mind that Cano will most likely get a big raise and Gardner and Robertson will get higher contracts through arbitration. They also do not really have a minor leaguer to replace Swisher so they would most likely have to spend some money on his replacement if they do not re-sign him. Also, Martin is a free agent after this season, so they may look to re-sign him, but that would mean they would have to give him a raise from his current salary. Granderson’s contract is up after next year, if they are serious about reducing payroll they might need to let Granderson walk since he will command a bigger contract and re-sign Swisher and move Gardner over to CF for 2014 and find a new LFer.