According to Rob Blum, the Yankees owe $15.7M in luxury tax for the 2017 season. It is their lowest luxury tax bill since 2011, when they owed $13.9M. The $15.7M bill is based on a $226.4M luxury tax payroll. The team’s actual payroll was $208.4M, their lowest since 2006, if you can believe that.
The $15.7M luxury tax bill is down from $27.4M last year and $26M the year before. The Yankees have paid luxury tax every year since the system was put in place in 2003, and their running total is $341M in luxury tax payments. That’s a lot of money for nothing. The cost of doing business, as Scott Boras would say.
As you know, the Yankees plan to get under the $197M threshold next season, which would reset their tax rate from the maximum 50% and save the team millions in the short and long-term. Our estimates put the current payroll at $172.5M. Based on that, it appears there is still some money in the banana stand for an infielder and another starter.
The Dodgers were hit with a $36.7M luxury tax bill this year based on a $253.6M payroll. It is their fourth straight year paying luxury tax. The Giants ($4.1M), Tigers ($3.7M), and Nationals ($1.45M) also owe luxury tax this year. The Tigers and Giants both went 64-98 this season, tied for the worst record in baseball, yet their payrolls were so high they have to pay luxury tax. Eek.
Luxury tax checks are due to the commissioner’s office by January 21st. The first $13M of the $15.7M the Yankees owe will go to player benefits. Half the remaining $2.7M goes into the league retirement fund and the other half is distributed among the 25 teams that did not pay luxury tax this year.