Mar
26

AP: Yankees to open season with $204M payroll

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According to the AP, the Yankees will open the season with an estimated $204M payroll, the second highest in the game behind the Dodgers ($235M). This will be the first time since 1999 that New York will not have baseball’s highest Opening Day payroll. The Astros ($45M) and Marlins ($48M) have the lowest and second lowest payrolls, respectively, and the league average salary is in the $3.95M to $4M range.

The payroll estimations cover everything — the 40-man roster, players on the DL or restricted list, pro-rated salaries, payments from other teams, so on and so forth. The Yankees opened last season with a $228M payroll according to Cot’s, though that is an outlier because they took on salary late in camp (Vernon Wells and Lyle Overbay, etc.) to cover for injuries. The team’s average Opening day payroll from 2008-12 was ~$208M, so it has not increased as league revenues and other payrolls around the game have gone up. The luxury tax is doing what it was intended to do.

Categories : Asides
  • Need Pitching & Hitting

    tapped out…

  • RetroRob

    The Yankees have had a $200M payroll for basically a decade, first crossing the $200M line in 2005 with an opening day payroll of $205MM. While it has fluctuated above, and a couple of times below the $200M line, they basically have had zero growth in payroll over the years while the rest of the league catches up.

    This is driven by the Luxury Tax, which serves as a cap. It’s a soft cap, but a cap nonetheless since teams are influenced by it. The Yankees have made a decision to live above it, but they’ve also made a decision to not pull away from it. Based on inflation and growth in revenues, they easily should be closing in on $300M. We also see other teams such as the Red Sox and Angels and Phillies make decisions based on the Luxury Tax.

    So MLB has a cap, but a soft one that provides the flexibility to go above it. Like it or not, it has accomplished exactly what Bud Selig wanted it to accomplish. The real question, though, is why hasn’t the MLBPU requested there also be a similar tax on teams that fall below a certain spending line. Because caps usually have an ceiling and a floor.

    • KeithK

      The players may well have asked for a salary floor but just haven’t made it a central position. Seems to me that the union has always focused on driving up the price of big contracts, the eight figure per year guys. Forcing the Astros or Marlins to get above $60M, for example, isn’t going to accomplish that. Those teams would probably just funnel some additional money to minor free agents to get the payroll up.

      I think it really comes down to this: things are going pretty damn well for the players right now. Average salary just broke $4M. Teams are locking up their players with long term contracts like never before. Why would the union want to focus on the few really low budget teams when everyone else is spending freely? Maybe Don Fehr would do it on principle. But I don’t get that vibe from Clark or from Weiner before him.

      • RetroRob

        I don’t disagree with any of that and to be clear, I’m not even advocating a tax on a salary floor. Just thought it was interesting since MLB does have it’s own version of a salary cap, even if some people don’t want to see it, and it is having the desired effect.

        Now, it’s not as if the Yankees aren’t playing along with this. I believe they are comfortable with the luxury tax, even if they don’t love it. They’ve built it into their payroll model and they do have the flexibility to go way above it if they like, but overall they had a target number they could go below.

        I’ve said this ad nauseam over the years, but it was quite clear what the Yankees were doing in relation to the luxury tax. They didn’t necessarily have a plan to cut payroll to get below it, they were more than happy to let the luxury tax threshold creep toward their payroll. Every year they would pay less in luxury tax, and eventually they were going to fall below it, resetting their tax to zero.

        MLB, however, saw that too, and MLB wants the Yankees to write a check to them every year for millions of dollars, so in the last CBA they actually capped the luxury tax threshold at $189MM. It was no longer moving upward post 2014, which is what set Hal Steinbrenner off on Plan 189. If the threshold wasn’t coming to Hal, then Hal was going to go to the threshold. I understood why he was doing it, but it actually turned out to be a bad idea, seemingly costing the Yankees millions. They went through all sorts of roster and contract machinations (i.e. Vernon Wells), driving up their payroll in 2013 in an attempt to get below 189 for 2014, in the end getting a more mediocre product in the process, and less revenue from fans who didn’t quite embrace the team. He then had to backtrack this year and toss Plan 189 out…thankfully.

        MLB may like to complain about the Yankees’ spending, but MLB wants the Yankees money. They were quite happy when the Yankees tossed Plan 189 out, and are also quite happy the Dodgers have joined the Yankees as living above the luxury tax threshold.

        Everyone is making money, everyone is happy, even if Hal is a bit ticked that MLB caught onto his plan and changed the rules in the last CBA.

        • OB/GYN Kenobi

          I agree with all this. And it makes me super pissed.

  • Dale Mohorcic

    Would be interesting to see ratios of what the Yankees payroll (and other teams) have been for the last 10-20 years just to get a pool of comparison info. Any way to calculate that other than by hand?

    • Need Pitching & Hitting

      Biz of Baseball had a listing of total end of year MLB payrolls going back to 1999 a while back.
      I calculated the Yankees end of year payroll as a % of total league end of year payroll and found:
      2013 7.08%
      2012 7.09%
      2011 7.20%
      2010 7.39%
      2009 7.55%
      2008 7.73%
      2007 8.05%
      2006 8.31%
      2005 9.75%
      2004 8.56%
      2003 7.51%
      2002 6.54%
      2001 5.73%
      2000 5.74%
      1999 6.28%

      They peaked in 2005 after a rapid escalation over the previous few years and have been steadily declining since then.

      • OB/GYN Kenobi

        Nicely done, thanks.

        Yup, from nearly 10% to nearly 7% in a little less than a decade. That’s what happens when you hold the line and everyone else slowly but surely catches up.

  • Eddardo Nuney

    I’d like to see them institute a hard cap, maximum and minimum. We shouldn’t have the Yankees paying out luxury tax payments just to fill the small market owner’s pockets. MLBPA will never approve a maximum cap, though because then it would drive down salaries. It would be in the best interest of the game.

    • ALZ

      You do realize that outspending the rest of the league is the biggest competitive advantage this team has, and the sole reason it has been competitive for 20 years now?

      • http://www.riveraveblues.com Mike Axisa

        The sole reason? Really?

  • Yankee$

    So if this includes players on restricted list it includes Alex, right? I thought the $189M target was including Alex relief, right? Did they hit their target? What am I missing?

    • Need Pitching & Hitting

      They missed the target badly. The $204M payroll isn’t their luxury tax payroll. And I believe it only includes the money ARod actually will be paid this year, not the amount lost to suspension.

      As of now, their luxury tax payroll looks like it will end up around $215M.

      • Tom

        Actual 25 man 2014 payroll will be ~197 (assuming guys like Dean Anna and league min guys are rounding out the bullpen). Cots has it currently at ~200 because it has all of the people who have agreed to deals (so guys like Romine, Murphy, Nuno who will be in the minors are still being counted as 500K)

        Cots has the luxury tax # at 203, but since the Yankees haven’t made the final roster decisions it is short 5 or 6 people (so that # will increase ~3mil)

        Your 215mil is probably a very good guess – DL callups will tack on at least another 2-3 mil (probably closer to 4-5), a trade here or there and it should settle in around 215 (unless they deal for a big salary)

        They missed by less than the Tanaka salary – I think had they not signed him 189mil would have been real and that was pretty much the swing decision. And if you recall Cashman said if they didn’t get Tanaka they weren’t going the next tier down to the Santana’s and Jiminez’s of the world. Just speculation, but if they didn’t win out on Tanaka I think they would have gone for 189mil (and likely achieved it)

        • Need Pitching & Hitting

          I agree they were probably going to try to stay under if they missed out on Tanaka.
          Considering how close to the threshold they were though, I have a feeling they may have ultimately gone over anyways on a combination of deadline acquisitions/injury replacements/ performance bonuses.

          • Tom

            It would have been close – they would have had to have committed to basically only league min DL replacements (minors/waivers).

            At that point though you could also be more aggressive in dumping salary (Ichiro) – although that doesn’t appear to be a huge market these days. Or they could have looked for someone on a 2 year bad deal and done a reverse Wells deal (backload the money into the 2nd year and have the other team eat more money in the first year)

            • Yankee$

              Thanks Gents.

  • Jorge Steinbrenner

    DAN GEN WAS RIGHT ABOUT THE 205 PLAN OMGZ.

  • Reuben Sierra’s Chains

    Dodgers are RUINING the game, those assholes…

    • Steinbrenner’s Ghost

      Saw a segment today on how the Dodgers are jacking up ticket prices and food to meet the payroll.

      That prices out average fans.

      In fact, this very blog looked at how ticket prices have exploded.

      http://riveraveblues.com/2008/.....kets-2327/

      And as you see in the chart, adjusted for inflation, the price of a ticket remains stable for 28 seasons, from 1967 to 1994. And then beginning in 1995, it skyrockets, jumping up 10 fold in only 14 seasons, from $24 in 1994 to $250 in 2008.

      Baseball was a game for the masses. It was the national pastime. Now, tee vee ratings dwindle every year. Ratings remained stable until 1995. In 1995, 30 million tuned in for game one of the world series. Last year, only 15 million tuned in.

      How can middle class families bind themselves to a game they can’t afford to attend on a regular basis.

      • RetroRob

        I doubt their jacking up ticket prices and food prices to meet the payroll. They’re jacking up prices because fans will pay it.

        • RetroRob

          “they’re”

          Edit button. Edit button. My kingdom for an edit button!

      • Ed

        Here’s the thing… attendance has gone up drastically since then. In the 80’s and early 90’s, season attendance was around 2.2m, give or take 400k. Starting in ’96 (ignoring the strike shortened ’94-’95 years), attendance grew from 2.2m to a peak of 4.3m in 2008. The first 4 years in the new stadium ranged from 3.5m to 3.7m.

        The lesson here? Prices went up because more people wanted to go to games, and they were willing to pay for the privilege.

  • Steinbrenner’s Ghost

    Sherman on MLB said the number includes pension payments for which each team is charged 11 million.

  • Tom

    The AP is mixing and matching all over the place. The payroll #’s they quote for teams like Houston or Miam are just ACTUAL 25 man salary and aren’t the luxury tax calc #’s.

    So they have chosen to tack ~11-12mil on to some teams (the 40man/benfits and use AAV) and then look at strict 25man salary for others. They should pick a methodology and be consistent.

    Mike A: You are also doing kind of doing this. The 228mil # you quote last year was actual 25man payroll, not the luxury tax calc with benefits added (and AAV’s used). Also it does indeed include Soriano and Wells; Cott’s has this in the spreadsheet links. They call it “Opening Day” payroll, but it’s really not. (They also nicely break out what other teams are paying when teams eat salary)

    • Tom

      Just to add; Cott’s has the payroll right around 200mil, but that is a bit overstated as it has all of the league min salaries that the Yankees agreed to (for example guys like Romine, Murphy Zoilo, Nuno are included)

      I think the final 25man #, assuming the final spots are all about league min is about 196-197mil in terms of actual payroll – which would apples to apples to the 208average you are mentioning of past years.

    • Need Pitching & Hitting

      None of the numbers appear to be luxury tax calculations.
      I don’t think any of their quotes include benefits or AAV.
      The appear to use current salary plus pro-rated signing bonuses for all players and then factor in payments to and from other teams, option buyouts, and termination pay.

      • Tom

        I think you are right and it may be random coincidence the #’s are almost lining up (I think it’s within 2 or 3 mil)

        With guys like Jeter, Wells, and even ARod having different 2014 salaries vs luxury tax #’s it might just be working out where those differences and the various buyouts just happen to almost completley offsets the 11mil benetfits. (although Jeter and ARod I think are in the ‘wrong’ direction, so I still don’t understand how things are so closely lining up)

      • RetroRob

        Usually the start-of-season payroll numbers that the media reports doesn’t include the benefits. The season-ending number does include the benefits.

        That said, haven’t a clue what’s being reported here! Numbers are all over the place throughout the season when it comes to payroll.

  • dee dubs

    why is A-Rod being paid $2M+ for 21 days of the season?

    • Tom

      The players are paid for 183 days in season. Since the suspension is technically 162 games, he gets paid for the other 21 days.

      (And yes this makes no logical sense)

      • OB/GYN Kenobi

        Tom: resident capologist. Thanks for the posts.

  • Mike

    Judging from what I’ve seen so far. Money well spent.

    It’ll be us vs the Dodgers in the WS I think.