Headlines

  • Yordan Alvarez Shut Down Due To Setback With Hand Injury
  • Giants Exercise 2026 Option On Manager Bob Melvin
  • Astros Place Jeremy Peña On Injured List With Fractured Rib
  • Tucker Barnhart To Retire
  • Tyler Mahle To Be Sidelined Beyond Trade Deadline
  • Reds Release Jeimer Candelario
  • Previous
  • Next
Register
Login
  • Hoops Rumors
  • Pro Football Rumors
  • Pro Hockey Rumors

MLB Trade Rumors

Remove Ads
  • Home
  • Teams
    • AL East
      • Baltimore Orioles
      • Boston Red Sox
      • New York Yankees
      • Tampa Bay Rays
      • Toronto Blue Jays
    • AL Central
      • Chicago White Sox
      • Cleveland Guardians
      • Detroit Tigers
      • Kansas City Royals
      • Minnesota Twins
    • AL West
      • Houston Astros
      • Los Angeles Angels
      • Oakland Athletics
      • Seattle Mariners
      • Texas Rangers
    • NL East
      • Atlanta Braves
      • Miami Marlins
      • New York Mets
      • Philadelphia Phillies
      • Washington Nationals
    • NL Central
      • Chicago Cubs
      • Cincinnati Reds
      • Milwaukee Brewers
      • Pittsburgh Pirates
      • St. Louis Cardinals
    • NL West
      • Arizona Diamondbacks
      • Colorado Rockies
      • Los Angeles Dodgers
      • San Diego Padres
      • San Francisco Giants
  • About
    • MLB Trade Rumors
    • Tim Dierkes
    • Writing team
    • Advertise
    • Archives
  • Contact
  • Tools
    • 2025 Trade Deadline Outlook Series
    • 2025-26 MLB Free Agent List
    • Contract Tracker
    • Transaction Tracker
    • Agency Database
  • NBA/NFL/NHL
    • Hoops Rumors
    • Pro Football Rumors
    • Pro Hockey Rumors
  • App
  • Chats
Go To Pro Hockey Rumors
Go To Hoops Rumors

Yankees Likely To Exceed 2014 Luxury Tax Threshold

By Jeff Todd | April 26, 2013 at 12:11am CDT

The Yankees appear increasingly likely to set the team's payroll above the $189MM luxury tax threshold for next season, writes Yahoo Sports' Jeff Passan. Passan quotes an unspecified source: "They're going to be over [$189MM]. They know it. Everyone knows it. You can't run a $3 billion team with the intentions of saving a few million dollars." Of course, the Yankees never thought they would be saving only a few million dollars when they began speaking publicly about their intentions. Instead, the club was reportedly looking to save something in the neighborhood of $50MM.

Passan explains why that anticipated saving may no longer be available. First, the team no longer expects to recover a substantial amount of the money that it contributes to the MLB revenue sharing system. Rule changes had promised big money to the Yanks if they got under the threshold.

The rules used to allow certain big-market clubs with smaller revenues — such as the Nationals, Braves, and Blue Jays — to receive shared funds. Beginning in 2014, however, such clubs will begin sending that money back to the large-market, high-revenue clubs (like the Yankees) from whence it came. The contributing clubs get a rebate in proportion to their contributions, but only if they fall under the luxury tax threshhold. But with clubs like those mentioned shifting toward higher payrolls, the imbalance is disappearing and with it the potential funds to be reclaimed. A Passan source says that "the pool is going to be much less than everyone anticipated."

The direct luxury tax savings, in turn, may not be enough on their own to make the limbo act worthwhile. Passan explains that, were the Yankees to dip under the threshold for one season (presumably 2014), the club's luxury tax savings over the next two years could range from around $15.6MM (on a hypothetical $205MM payroll for 2015-16) to over $30MM (on a hypothetical $220MM payroll in those years). In other words, the savings increase as the anticipated future salary goes up.

It could be difficult to engineer a one-year salary valley, followed by an immediate spike, in a manner that makes the maneuvering worthwhile while efficiently creating good results on the field. Looking ahead to 2014, the Yankees already have a large amount of money committed to a small number of players, many of whom face age, injury, and/or other issues that could limit their value. The team will also be looking to re-sign superstar Robinson Cano. Moreover, a purge-and-binge free agency strategy may not allow the Yanks to fill all their needs from an increasingly shallow free agent market, potentially leading to overspending on sub-optimal players. The future free agent classes will not be as flush with talent as expected by the time we actually reach them, with several of the biggest names already locked up. 

Of course, there is also an enormously valuable brand to protect and grow. Add it all up, and the risks may well not justify the relatively unimpressive savings that the Yanks could reap from getting under the salary ceiling. In early March, over 60% of MLBTR readers who voted said the Yankees would not get under the threshold for 2014. That community projection is looking good right now. What, then, would the impact be on the broader market for MLB talent?

To start, an uncapped Yankee budget would leave no obvious barriers to the retention of Cano. Perhaps more importantly, the Yanks would seem to be positioned to take on major additional salary obligations even after putting a Cano extension in the books. While no unquestionable impact players appear atop the class of prospective free agents (excepting, of course, Cano), Yankee money would nevertheless have a major impact on market demand. Even last year, when the Yankees seemed quiet in anticipation of the 2014 austerity plan, the club had the seventh-highest total offseason spend according to MLBTR's Offseason In Review tabulations. (The Yanks issued over $95MM in new money commitments, all in short-term deals. That figure includes free agent signings and exercised options, but not extensions.)  

Depending on how things shake out, the team could have needs all over the diamond, including catcher, corner outfield, the left side of the infield, and the rotation. In fact, with the exception of Chase Utley — assuming that he will look to sign as a second baseman — the Yankees' needs could conceivably match with any of the players listed by MLBTR's Tim Dierkes in his latest 2014 Free Agent Power Rankings.

Share 4 Retweet 23 Send via email0

New York Yankees

NL Notes: Selig, Padres, Braves, Garza
Main
Cubs Likely To Draft Appel Or Gray
View Comments (0)
Post a Comment

Leave a Reply Cancel reply

Please login to leave a reply.

Log in Register

    Top Stories

    Yordan Alvarez Shut Down Due To Setback With Hand Injury

    Giants Exercise 2026 Option On Manager Bob Melvin

    Astros Place Jeremy Peña On Injured List With Fractured Rib

    Tucker Barnhart To Retire

    Tyler Mahle To Be Sidelined Beyond Trade Deadline

    Reds Release Jeimer Candelario

    Dave Parker Passes Away

    Griffin Canning Diagnosed With Ruptured Achilles

    Pirates Reportedly Have Very Few Untouchable Players At Trade Deadline

    Griffin Canning Believed To Have Suffered Achilles Injury

    Mariners Looking For Corner Infield Bats; Ownership Willing To Bump Payroll

    Wander Franco Found Guilty Of Sexual Abuse

    Mariners Place Rowdy Tellez On Release Waivers

    Max Meyer To Undergo Season-Ending Hip Surgery

    Whit Merrifield Announces Retirement

    White Sox Sign Noah Syndergaard To Minor League Deal

    Corbin Carroll Placed On IL With Wrist Fracture

    Hoops Rumors Has The Latest On NBA Draft, Free Agency

    Mets Option Francisco Alvarez

    Reds To Promote Chase Burns For MLB Debut

    Recent

    Yordan Alvarez Shut Down Due To Setback With Hand Injury

    Jorge Mateo To Miss 8 To 12 Weeks With Hamstring Strain

    Reds To Sign Buck Farmer To Minor League Deal

    Pirates Trade Hunter Stratton To Braves

    Rockies Designate Sam Hilliard For Assignment, Select Austin Nola

    Orioles Select Jacob Stallings, Designate Emmanuel Rivera For Assignment

    Rangers Select Billy McKinney, Transfer Tyler Mahle To 60-Day IL

    Marlins Claim Nick Nastrini

    Giants Exercise 2026 Option On Manager Bob Melvin

    Poll: What Will The Twins Do At The Deadline?

    MLBTR Newsletter - Hot stove highlights in your inbox, five days a week

    Latest Rumors & News

    Latest Rumors & News

    • Sandy Alcantara Rumors
    • Luis Robert Rumors
    • Alex Bregman Rumors

     

    Trade Rumors App for iOS and Android App Store Google Play

    MLBTR Features

    MLBTR Features

    • Remove Ads, Support Our Writers
    • Front Office Originals
    • Front Office Fantasy Baseball
    • MLBTR Podcast
    • Trade Deadline Outlook Series
    • 2025-26 MLB Free Agent List
    • Contract Tracker
    • Transaction Tracker
    • Extension Tracker
    • Agency Database
    • MLBTR On Twitter
    • MLBTR On Facebook
    • Team Facebook Pages
    • How To Set Up Notifications For Breaking News
    • Hoops Rumors
    • Pro Football Rumors
    • Pro Hockey Rumors

    Rumors By Team

    • Angels Rumors
    • Astros Rumors
    • Athletics Rumors
    • Blue Jays Rumors
    • Braves Rumors
    • Brewers Rumors
    • Cardinals Rumors
    • Cubs Rumors
    • Diamondbacks Rumors
    • Dodgers Rumors
    • Giants Rumors
    • Guardians Rumors
    • Mariners Rumors
    • Marlins Rumors
    • Mets Rumors
    • Nationals Rumors
    • Orioles Rumors
    • Padres Rumors
    • Phillies Rumors
    • Pirates Rumors
    • Rangers Rumors
    • Rays Rumors
    • Red Sox Rumors
    • Reds Rumors
    • Rockies Rumors
    • Royals Rumors
    • Tigers Rumors
    • Twins Rumors
    • White Sox Rumors
    • Yankees Rumors

    Navigation

    • Sitemap
    • Archives
    • RSS/Twitter Feeds By Team

    MLBTR INFO

    • Advertise
    • About
    • Commenting Policy
    • Privacy Policy

    Connect

    • Contact Us
    • Twitter
    • Facebook
    • RSS Feed

    MLB Trade Rumors is not affiliated with Major League Baseball, MLB or MLB.com

    Do not Sell or Share My Personal Information

    hide arrows scroll to top

    Register

    Desktop Version | Switch To Mobile Version