NY Yankees payroll

[Clarkmeister]

The Yankees reportedly will have a $164mm payroll this year, $45mm more than the number 2 payroll team, the NY Mets. Estimated luxury tax for the Yanks is $9mm.

Question: The $9mm penalty seems small. Does anyone know if this is a result lower rates in the early years of the CBA, or would they be paying $9mm regardless of which year this occured?

[Dynasty]

From mlb.com:

In 2003, payroll violators will be taxed at a rate of 17.5 percent for payroll amounts above $117 million. In 2004, the threshold rises to $120.5 million with first offenders taxed at 22.5 percent and second offenders at 30 percent. In 2005, the threshold goes to $128 million with a tax-rate of 22.5, 30 and 40 percent for first, second and third violations.

The payrolls ceiling goes to $136.5 million in 2006 when, as a significant concession by owners, first violators will not be penalized at all. However, repeat offenders will be taxed at rates of 30, 40 and 40 percent for second, third and fourth violations.

[Six_of_One]

The tax rate percentage goes up each year of the agreement...I'm not sure of the exact numbers, but I think the first year is only something like 17.5% on anything over 117 million, including 40 man rosters and benefits. As the percentage goes up (never reaches 50% in this agreement, I think), so does the threshold at which the tax begins (something like 140 million by the 4th year of the agreement, I think).

[Six_of_One]

Oops, I was too slow...hey, my numbers were pretty close though [img]/forums/images/icons/grin.gif[/img]

[IrishHand]

Baseball's luxury tax is a joke. 9M out of a 160M+ payroll is nothing compared to the guaranteed TV, advertising, and ticketing revenue the Yanks get as a result of both being successful in general and from the playoffs in particular. So long as their outlandish payroll 'guarantees' success (which it does), they'll continue. If they adopted an NBA-style luxury tax, I suspect it'd be a far different story. A $43M+ hit on a $160M payroll would have the double benefit of (a) discouraging the Yanks, Mets, etc from simply outspending their opponents (rather then outmanaging, outscouting, etc), and (b) subsidizing all the crap teams that wouldn't exist if baseball'd been more sensible.

Of course, I still think that both the DH and the extra round of playoffs are abominations. [img]/forums/images/icons/smile.gif[/img]

Irish

[andyfox]

I believe that, whatever the luxury tax, the teams that receive such revenues can do whatever they want with it: that is, the owners can buy yachts if they like, there is no requirement that the money be spent on their teams.

What is it that you don't like about the DH?

[Clarkmeister]

"What is it that you don't like about the DH?"

I know what I don't like about it.

Everything.

It makes as much sense as having someone come in and shoot Shaqs free throws for him.

[andyfox]

Different players play offense and defense in football. Why shouldn't they in baseball? Why should Nick Johnson be allowed to come in and play defense for Jason Giambi in the late innings? Why not?

What I like about it is that it adds more strategy to the game. The common wisdom is that it takes strategy out of the game because a manager doesn't have to worry about taking his pitcher out in the late innings because he is behind by a run or two and needs to pinch hit for him.

But the days of pitchers going nine innings are over, DH or not. There may be a few pitchers for whom this late inning decision comes into play (Schilling and Johnson come to mind, but not many [or even any] others), but for the vast majority, they're coming out after 7 innings or so anyway.

With the pitcher up and a man on first with nobody out, the default play 99% of the time is the ever-exciting sacrifice bunt. With the number nine hitter up in the American League, the manager can bunt, hit away, play hit and run, or run and hit. He has many more options which are available to him because he is more confident that a guy hitting .250 can put his bat on the ball than a guy hitting .150.

The DH was put into play the year after the American League his .230. Now that hitters dominate the game, the "need" for a DH is reduced from what it was. But I think people would still prefer to see Edgar Martinez hit than John Halama.

[Dynasty]

It was actually the players' union who was against a salary floor. It was part of their overall objection to having a salary cap.

[IrishHand]

Yes, it is a sad reality that the beneficiaries of revenue sharing can do what they want with those dollars. A salary floor would be a nice add-on when they make the salary ceiling. It could be low - so as to accomodate teams that were rebuilding, but not so low that small-market owners could go on with miniscule payrolls, low attendance, high revenue sharing $$s and high profits.