How the new luxury tax affects the Yankees

There is plenty to digest in the new collective bargaining agreement. MLB and the MLBPA made sweeping changes in a number of areas, though the greatest ones cover amateur players. Yet there is one change that could affect teams at the Major League level — or, at least, it will affect the Yankees. As Mike noted on Monday, the luxury tax threshold and tax rate will increase in 2014. That gives the Yankees two more years at the current level, but it could become costlier for them to spend in two years. That could affect how they approach this off-season.

As the Yankees search for another pitcher this off-season, they’ll look at a number of pitchers who will be with the team through 2014. That might be a straight free-agency contract, as in the case of Edwin Jackson or C.J. Wilson. It could also come in the form of an extension following a trade. Whatever the case, the Yankees could in many ways add to the 2014 payroll this off-season. As is typically case for future Yankee payrolls, they already have quite a few commitments on the books.

Before signing any further contracts, the Yankees have $75 million tied up for 2014. Chances are that will be at least $80 million, since only the $3 million buyout in Derek Jeter‘s player option currently counts. While $75 to $80 million might seem like a decent starting point, it covers only three to four players: Alex Rodriguez, CC Sabathia, Mark Teixeira, and perhaps Jeter. With multiple starting positions and rotation spots left to fill, the Yankees could find themselves increasing payroll even further. That’s going to cost them plenty under the new CBA.

While the luxury tax threshold will increase to $189 million, the tax rate will jump 10 points, to 50 percent of all payroll above that $189 million level. This actually helps the Yankees at their current levels. Last year’s $207 million Opening Day payroll would have been taxed at 40 percent above $178 million, or $11.9 million. At a 50 percent rate above $189 million the tax bill would have been just $9 million. The tax rates even out at a $233 million payroll, meaning the new luxury tax, compared to the old one, benefits the Yanks at all payroll levels up to $233 million. That is, their overall payroll, including tax, would have been higher under the old system.

(And I realize that Opening Day and luxury tax payroll figures aren’t the same; this is just a for-instance.)

This helps the Yankees in many ways, especially since it begins in 2014. Again, the Yankees are down to three or four players, and have a good chunk of payroll already committed. If Robinson Cano commands, say, $22 million per season, that’s $102 million for five players. The payroll might even climb dramatically from there. They have one outfielder and one relief pitcher under team control, and both — Brett Gardner and David Robertson — will be entering their third years of arbitration. That leaves two outfield spots, catcher, three rotation spots (assuming Ivan Nova keeps it up), and nearly an entire bullpen. Even if Gardner and Robertson combine to earn $10 million those are a lot of spots to fill for under $100 million. This new luxury tax threshold, then, will certainly benefit the Yankees when they need it most.

For an example of how it can help, let’s look to the Yankees’ all-time high payroll, $213 million in 2010. That year they actually paid $227 million that year, with the 40 percent tax above $178 million. Let’s say that their absolute maximum, in any year, is $230 million. That’s the number which Brian Cashman can exceed in no scenario. With the new 50 percent tax on payroll over $189 million, the Yankees could support a $216 million payroll and still pay the same $230. It might seem like a small amount, but that $3 million might cover, say, Ivan Nova’s arbitration case. That gives the Yankees a bit more flexibility than in the past.

The change might seem small, but it does benefit larger market teams. They can either stay at the same payroll levels as in the past and save money, or they can extend payroll a bit further and still pay less than they would have under the old tax rate. Of course, it also allows other teams to move towards $189 million, rather than $178 million, tax free. But the Yankees are likely more concerned about their own books than those of their opponents.

Surprise! Ticket prices going up in 2012

The Yankees announced their general ticket prices for the 2012 season today, saying that 70% of the prices are unchanged or have been reduced. That does not include the bleachers though, where non-obstructed view seats will now cost you $20 a pop. They were only $12 as recently as 2010. Grandstand level seats between first and third bases will jump three bucks to $28, while seats beyond the bases at that level will remain at $20. Field level and main level seats beyond the bases are dropping as much as $50. David Waldstein and David Li have some details.

Open Thread: Ricky Ledee

(Photo via LIFE.com)

Ricky Ledee is little more than a footnote in Yankees history, but he’s a great story of perseverance in a game that requires so much of it. The Yankees drafted him out of Puerto Rico in 1990 (16th round), but it wasn’t until nine years later that he finally saw the bright lights of the big leagues. In between, the organization had him spend three seasons in rookie ball, one season in short season ball, two seasons in Low-A, two months in Double-A, and parts of two seasons in Triple-A. Baseball America didn’t put him on their top 100 prospects list until 1998, when they considered him the 46th best prospect in the game.

Still just 24-years-old when he was finally called up in June of 1998, Ledee homered off Scott Erickson in his second career start. He played left field pretty regularly while Chad Curtis was on the DL, then was sent back to the minors in July before coming back up in September. The 114-win Yankees carried him on their playoff roster as an extra left handed bat, and Ledee rewarded them by reaching base in eight consecutive plate appearances to open the World Series against the Padres.

The Yankees used Ledee as part of a left field platoon with Curtis in 1999, though he ended up back in the minors after a slow start before resurfacing in late-June. He hit .293/.368/.537 with 13 doubles and nine homers in 231 plate appearances the rest of the way, eventually taking over the left field job on an everyday basis. The Yankees won their second straight World Series with some help from Ledee’s second straight strong postseason showing. He opened the 2000 season as the regular left fielder, but his batting line sitting at .241/.332/.419 in late-June, the Yankees traded Ledee to the Indians as part of a package for David Justice, who rode into the Bronx on a white horse to save the offense and guide the team to its third straight World Championship.

Ledee’s time in Cleveland was short-lived; they traded him to the Rangers for David Segui just a month later. In the span of five weeks, he’d played for all three of the previous year’s division winners. Ledee bounced around a bit after that, spending time with Phillies, Giants, Dodgers, and Mets before retiring in August of 2007 as a .243/.325/.412 career hitter. He’s one of only three players to play for the four original New York teams, joining Darryl Strawberry and Jose Vizcaino. Ledee turns 38 years old today, and based on the always reliable Wikipedia, he teaches salsa dancing class in his spare time. I hope he does so while wearing those World Series rings.

* * *

Here is your open thread for the night. There’s nothing going on in the local sports scene, so you’re stuck finding your own ways to entertain yourself. Talk about anything you like here, the thread is open for business.

CBA Madness: Draft, IFAs, HGH, More

Bud Selig and MLBPA head Michael Weiner smile after taking the screws to the future of baseball. (REUTERS/Brendan McDermid)

Baseball officially announced its new Collective Bargaining Agreement this afternoon, a five-year pact between the owners and players’ association. The deal ensures at least 21 consecutive years of labor peace, which is great for the sport. I’m not so sure we can say the same about the rest of the deal though. Many of the changes will hurt baseball, especially in the long-term.

We’ve already recapped changes to the luxury tax, Type-A and B free agents, and the elimination of the Elias rankings, but that is just the tip of the iceberg. All of the CBA news below comes courtesy of the best reporters in all of sports, our beloved baseball writers. Props specifically go out to Jeff Passan, Buster Olney, Bill Shaikin, Ken Rosenthal, and Danny Knobler. This is not a full recap, but Maury Brown has the entire CBA available. Let’s start with the most significant changes…

Draft Spending Limitations

  • There is no hard slotting, but teams are given a “draft pool” by MLB that they aren’t supposed to exceed. Teams that do exceed their pool by 5% will be taxed at 75%. Spending in excess of 5-10% will result in a 75% tax and a loss of the next year’s first round pick. Spending in excess of 10-15% results in a 100% tax and and loss of first and second round picks. Spending in excess of 15% results in a 100% tax and the loss of two first round picks. That’s harsh.
  • Something called the “Competitive Balance Lottery” gives extra picks to the small-market and low-revenue clubs. Six draft picks immediately after the first round will be given to the ten teams with the ten lowest revenues via a lottery system. A team’s odds of winning the lottery will be based on its winning percentage the prior season. There will be another lottery with six additional picks after the second round for the clubs that miss out on the first set of picks. These Competitive Balance Lottery picks can be traded, but other picks can not.
  • If a player drafted in the tenth round or later signs for $100k or more, the extra money counts against the team’s draft pool. I’m not entirely sure what that means, but I think it means you can sign a player drafted in the tenth round or later for $100k and it will not count against your pool. Don’t quote me on that.
  • The draft signing deadline has been moved up from August 15th to sometime between July 12-18th, depending on the All-Star Game. The college coaches will appreciate this.
  • Drafted players can only sign minor league contracts now, and the top 200 prospects will be subject to mandatory drug testing.

International Spending Limitations

  • Each team will be allowed to spend $2.9M on amateur free agents this year, or a hundred grand less than the Yankees gave Gary Sanchez in 2009. Starting next winter, the worst teams will be allowed to spend ~$5M while the best teams get to spend ~$1.8M.
  • Starting in 2013-2014, teams will be able to trade their international spending cap space, thought clubs will only be able to acquire an additional 50% of their cap. So if the Yankees are limited to a $3M cap, they can only trade for an additional $1.5M.
  • Players under 23 years old and with less than years of professional baseball experience will be considered amateurs and count against the spending cap. That means guys like Yoenis Cespedes and Japanese veterans will be treated as a true free agents. Japanese players run through the posting system will not count against the cap.
  • Players must register with MLB’s scouting bureau in order to be eligible to sign. That should cut down on the number of age and identity fraud cases. The top 100 prospects will be subject to drug testing.
  • A worldwide baseball draft is a “significant possibility” by 2014, and there are incentives in place for both sides to negotiate terms in the future.

Long story short, the MLBPA sold out its future members for the sake of its current members. The draft and international spending limitations are severe and will drive young talent away from the game, and you’ll see legitimate two-sport guys like Zach Lee and Bubba Starling be pushed to college by the spending restrictions. Teams also have little incentive to run a baseball academy in Latin America now. We’ll see the real impact of these changes in five or ten years, when there’s a sudden lack of young talent and barely enough real athletes to play the middle infield. Anyway, here is the lest of the CBA news…

Draft Compensation Changes

  • The following players are Type-A free agents but will be treated as Type-B free agents for the remainder of the offseason: Matt Capps, Francisco Cordero, Octavio Dotel, Ramon Hernandez, and Darren Oliver. A team will not have to give up a draft pick to sign them, and their old team will gain just one supplemental first rounder.
  • The following players are Type-A free agents but will not be treated as “modified” Type-A free agents: Heath Bell, Michael Cuddyer, Kelly Johnson, Ryan Madson, Josh Willingham, and Francisco Rodriguez. A team will not lose a pick to sign them, however their old club will still receive two picks. One will be a first round one spot after the team that signs them, the second a supplemental first rounder.
  • These changes can all be seen on our 2012 Draft Order page.
  • Players must still be offered arbitration if their former club wants to receive draft pick compensation. The deadline to offer arbitration is tomorrow, by the way.

Blood Testing For HGH

  • Players will be tested next Spring Training to determine their energy levels, and those test results will be discarded. Tests will be taken on non-gamedays unless the player volunteers to do it the day of a game. They’re essentially going to test the test, just to see how the players respond physically after giving blood.
  • Once the two sides see how the players respond, they will then determine how and when to proceed with in-season testing. Offseason testing will begin next winter, and the tests will not be random. There has to be reasonable cause.

Instant Replay

  • Replay will be expanding to include fair-or-foul plays as well as “trapped” ball plays. MLB and the umpires’ union must still discuss the final details. Hooray for this.
  • There will also be an “improved process for challenging official scorer decisions.” So now David Ortiz can complain about his RBI total without interrupting his manager’s press conference.

Equipment

  • Players will no longer be allowed to use those low-density maple bats that shatter and turn into dangerous sharp, flying objects.
  • The Great Gazoo helmet, which Frankie Cervelli wears following all his concussions, will be mandatory by 2013. The new version will be less bulky and hilarious looking.

Salaries

  • The minimum salary will rise from $414k this past season to $480k next season, and it will climb to $500k by 2014.
  • The top 22% of players (in terms of service time) with fewer than three years of MLB service will be considered Super Twos. Those folks are arbitration-eligible four times rather than three. It had been the top 17% previously.

New Policies & Programs

  • A new tobacco policy will be instituted, preventing tobacco products from being visible during interviews, interactions with fans, etc. Uniformed personnel can still use chewing tobacco, but the can can’t be visible and a wad of chew in a player’s cheek will draw a slap on the wrist from the union.
  • A “program of mandatory evaluation” is in place for players that commit alcohol-related offenses, including DUIs.
  • There will be some kind of “social media policy,” basically taking all the fun out of MLB players on Twitter.
  • Something called “market disqualification” says the top 15 markets will not be able to receive revenue sharing money by 2016, the final year of this deal.
  • I can’t believe they actually had to write this into the CBA, but there is now a policy in place that protects union members from discrimination stemming from their sexual orientation.

Miscellaneous

  • Participation in the All-Star Game is mandatory unless the player is injured or otherwise excused by the commissioner.
  • Rosters will expand to 26 players for “certain regular or split doubleheaders.” I kinda like that.
  • The extra wildcard team and expanded playoff setup will be instituted immediately, so there will be two wildcard clubs per league next season. It will in fact be a one-game playoff.

The owners get rather drastic spending restrictions on amateur players as well as expanded playoffs while the players get an increased minimum salary, more Super Twos, and better free agent compensation rules. Everyone wins … as long as you’re an owner or a union member.

Ryan Braun named NL MVP

The final award of the 2011 season has been announced, and Ryan Braun is your NL MVP. He received 20 of 32 first place votes, and is the first Brewer to win the award since Robin Yount in 1989. I think Matt Kemp should have won, but playing on a non-contender hurt his chances. He finished second and received ten first place votes. Former Yankees farmhands Ian Kennedy and John Axford received a bunch of down ballot votes. The full results are available on the BBWAA’s site.

Mailbag: Michael Pineda

(AP Photo/Ted S. Warren)

Tucker asks: One of my Mariners friends suggested a possible trade that sounded crazy to me at first, but the more I thought about it the more it made sense: Michael Pineda for Jesus Montero. M’s need offense, Yanks need pitching.

Well, this isn’t really a question, so I guess it’s just a statement I will expand on. I think it is a very interesting swap, and certainly more realistic than the Felix Hernandez-for-random stuff proposals we see from time to time all the time. The framework makes a ton of sense, a team with pitching to spare and in need of offense gets six years of a young, high-end hitter while the team with offense to spare and in need of pitching gets five years of the young, high-end pitcher. It’s a match made in trade heaven.

Pineda, 23 in January, finished right behind Ivan Nova in the AL Rookie of the Year voting thanks to a 3.74 ERA and 3.42 FIP in 171 innings. Blame that on his 9-10 record and Seattle’s offense. He struck out 173 batters and walked just 54 unintentionally, good for 9.11 K/9 (24.9% of batters faced) and 2.89 BB/9 (7.9%). With a big frame (6-foot-5, 245 lbs.) and a high-octane fastball that averaged 94.2 mph this past season, it’s easy to see why Pineda should be considered among the game’s best young hurlers. He’s not perfect though.

For one, Pineda is an extreme fly ball pitcher, getting a ground ball just 36.3% of the time this past summer with uninspiring minor league grounder rates to match. He gave up 18 homers (0.95 HR/9) playing in spacious Safeco Field, a number that would almost certainly climb in Yankee Stadium. Secondly, he’s almost exclusively a two-pitch pitcher, using that big fastball roughly 65% of the time and his sharp slider roughly 32% of the time this summer. The other 3% is a flimsy little changeup and the reason why lefties hit him harder than righties, a pattern he also displayed in the minors. That isn’t to say Pineda isn’t a good pitcher, he certainly is, but he has some flaws that could be really exposed in the AL East and in Yankee Stadium.

There’s a very weird dynamic here because Montero was almost a Mariner in 2010, before Jack Zduriencik reneged on the Cliff Lee trade. I don’t know if there’s any “bad blood” between the two clubs because of that, but we know the Yankees weren’t happy with the way things went down and I have to think they hold a little bit of a grudge. I know I would. I’m sure they’re enjoying the fact that Montero out-fWAR’d Justin Smoak (0.6 to 0.5) this season, I know I am. I don’t think that “bad blood” would stand in the way of a potential Felix trade, but it might for lesser players, even someone like Pineda.

Objectively, I do think Montero-for-Pineda is a pretty fair trade. The one fewer year of team control is kinda mitigated by the fact that Pineda has shown he can handle a full season in the big leagues and be an above-average contributor. As good as Montero looked in September, we have no idea if he can produce 600 plate appearances at a time. On the other hand, the Yankees homer in my says no way to this trade; Pineda’s a two-pitch guy with fly ball problems and if the Yankees trade Montero, I’d like to see them trade him for someone more established.

Looking At The Yankees’ Sac Bunts

(AP Photo/LM Otero)

Baseball is a game without an official clock. In its stead, the 27 outs each team receives serve as the timekeeper, pushing each game to an inevitable conclusion. Avoiding those outs has become the name of the game over the last ten years, and one of the strategic moves that has come under fire due to this philosophy is the bunt. The sacrifice bunt draws a team one out closer to the end of the game without greatly increasing the chances of a run scoring. A look at run expectancy tables, which tell us how many runs are expected given a particular situation, confirms that bunting usually decreases the number of runs expected to score. While there are a few situations where a bunt is actually the statistically prudent move, on balance it is seen as the misused weapon of weaker, backwards-thinking managers, and is the hobgoblin of sabermetricians everywhere.

All that said, there is at least one study that suggests that managers tend to outperform run expectancy tables when it comes to bunting. This means that on average, managers have a reasonably good sense of the moment and of context, and they bunt in situations where it will produce more runs than one might expect given the post-bunt base/out status. While the numbers still suggest that these bunts decrease run expectancy, it is illuminating and encouraging to see that managers are utilizing the bunt reasonably efficiently.

All of this brings us to the manager of the local nine. One of the most common complaints about Joe Girardi‘s managing is that he bunts too frequently, playing for one run with an offense that can put up a crooked number in a hurry. I thought it would be instructive to look at every Yankee sacrifice bunt in 2011 to see how many runs Girardi actually cost his club with his small ball sensibilities. I broke the bunts down by player and then calculated three numbers:

  1. Expected runs before the bunt. This number tells us how many runs were expected to score given the base/out situation prior to Girardi working his managerial magic.
  2. Expected runs after the bunt. This tells us how many theoretical runs the bunt “cost” the club.
  3. Actual runs. This should tell us how Girardi’s move actually worked out.

Now, a few caveats.

  • Run expectancy is not perfect. It does not account for the score or the quality of offense or opponent, nor does it account for the skills of the hitter at the plate. However, it is a reasonable estimate of how the game has been impacted by a move, and I’ve broken things down by hitter so you can mentally adjust your evaluation based on the quality of the batter.
  • This study does not include the attempted bunts that failed and caused batters to fall behind in the count. However, it also does not include bunt singles or bunts in which the batter reached on a fielder’s choice or error, which help to greatly increase run expectancy (I also excluded Nick Swisher‘s bunt against Boston where he lost track of the number of outs and bunted on his own). The analysis is limited to successful sacrifice bunts. I’ve also removed all bunts by pitchers, as I think most of us can agree that bunting with an American League pitcher is almost always the correct move.
  • We cannot calculate what would have happened if Girardi had chosen not to bunt. To provide an example of why this is an issue, imagine an inning where Brett Gardner bunts a runner over and then Curtis Granderson homers. While we can figure out the run expectancy before and after the bunt and can observe actual runs scored, we can’t know what would have happened if Gardner had not bunted. So if one run was expected and two actual runs were scored, there is still the possibility that without the bunt, three runs would have scored (because Gardner could have reached prior to the home run). If we assume that everything would have been different and Granderson may not have homered had Gardner reached, the expected runs v. actual runs analysis is relevant. As such, this study is making the assumption that the bunt changes the entire inning, such that whatever happened afterward is connected to (but not necessarily caused by) the base/out state created by the bunt. Discarding that assumption does not make the conclusions irrelevant, but it does sap them of some of their power.

Keeping all that in mind, let’s take a look at the sac bunts Girardi called for in 2011.

Brett Gardner

# of sac bunts: 8

Expected runs, before the bunts: 7.0173

Expected runs, after the bunts: 5.4602

Actual runs: 11

Loss of run expectancy: 1.5571

Actual impact: Gain of 3.9827 runs over expected runs

(To be fair to Girardi and his predilection for bunting with Gardner, it is important to note that all of Gardner’s bunts but one came in the late innings of a tight game, when playing for one run is acceptable. The lone exception came against Justin Verlander, which represents another understandable, if not entirely defensible, use of the bunt.)

Eduardo Nunez

# of sac bunts: 6

Expected runs, before the bunts: 5.5296

Expected runs, after the bunts: 4.4064

Actual runs: 3

Loss of run expectancy: 1.1232

Actual impact: Loss of 2.5296 runs under expected runs

Derek Jeter

# of sac bunts: 4

Expected runs, before the bunts: 4.1974

Expected runs, after the bunts: 3.4954

Actual runs: 2

Loss of run expectancy: 0.702

Actual impact: Loss of 2.1974 runs under expected runs

Curtis Granderson

# of sac bunts: 3

Expected runs, before the bunts: 3.7157

Expected runs, after the bunts: 3.2358

Actual runs: 6

Loss of run expectancy: .4799

Actual impact: Gain of 2.2843 runs over expected runs

Ramiro Pena

# of sac bunts: 2

Expected runs, before the bunts: 1.701

Expected runs, after the bunts: 1.3028

Actual runs: 1

Loss of run expectancy: 0.3982

Actual impact: Loss of 0.701 runs under expected runs

One each for Russell Martin, Frankie Cervelli, Chris Dickerson, and Brandon Laird

# of sac bunts: 4

Expected runs, before the bunts: 3.402

Expected runs, after the bunts: 2.6056

Actual runs: 1

Loss of run expectancy: 0.7964

Actual impact: Loss of 2.402 runs under expected runs

Conclusion

# of sac bunts: 27

Expected runs, before the bunts: 25.563

Expected runs, after the bunts: 20.5062

Actual runs: 24

Loss of run expectancy: 5.0568

Actual impact: Loss of 1.563 runs under expected runs

Regarding that actual impact number, I am uncomfortable concluding that the bunts were always directly responsible for what happened after them. For example, I do not think Granderson’s lone “successful” bunt actually caused all 6 runs that subsequently scored in the inning. That said, I think it is fair to conclude that Girardi’s proclivity for bunting did not hurt the Yankees much in 2011. In terms of run expectancy, all of the bunts over the course of the season only cost the Yankees five runs, and that ignores the fact that many of them came in situations where playing for one run at the expense of a big inning is actually the right thing to do. Furthermore, the team outperformed the “runs expected after the bunts,” suggesting that Girardi may have utilized the strategy in optimal situations. Taking into account the fact that the actual runs scored was about the same as the number of runs expected, it seems clear that Joe Girardi’s bunting problem was not much of an detriment to the Yankees in 2011.

Update (12:28 p.m.): I am new to play index, but I just figured out how to get bunt singles and bunt outs listed properly(still no foul bunts, however). Here are the results for the 18 sac bunt attempts that ended without a sac bunt:

10 runners reached base
8 made force outs or popouts

On the outs:

RE before the bunts: 7.5994
RE after the bunts: 4.431
Actual: 7
Loss of RE: 3.1684
Actual impact: 0.5994

On the hits:

RE before the bunts: 9.9545
RE after the bunts: 16.1122
Actual: 17
Loss of RE: Gain of 6.1577
Actual impact: Gain of 7.0455

New total:

RE before the bunts: 43.1169
RE after the bunts: 41.0494
Actual: 48
Loss of RE: Loss of 2.0675 runs
Actual impact: Gain of 4.8831