Yankees: Already $50 million past the threshold – Luxury Tax be damned

Yankees cup runneth over (Photo: New York Magazine)

The Yankees, if the tax were due today, would owe MLB a cool $22 million for blowing by the luxury tax threshold. Coming up – arbitration and even more?

The Yankees appear to be back to the good ole days of free-spending, get out of our way, the World Series is ours this year mantra for the 2020 season.

According to Spotrac, the Yankees payroll flew by the first tax penalty threshold of $208 million standing still. The team then hurdled the second gate as well ($248 million), so that today their team payroll stands at $258,137,214.

The estimated calculation by Spotrac is drawn from a formula using Est. Tax Bill (30%, plus a surcharge of 12%, plus a surcharge 45%). Beyond that, don’t ask me how it is calculated.

Spotrac’s totals helpfully include their estimate of settlements on the twelve players eligible for arbitration (individual sums below). Note: I do not know why they include Greg Bird.

Yankees 2020 Arbitration Estimates (Source: Spotrac)

Yankees Still Have Arbitration To Contend With

Between now and February 3, when hearings are scheduled to begin, the Yankees can negotiate a settlement with each player. Multi-year contracts with James Paxton, Aaron Judge, and Gary Sanchez will be in play.

If a settlement cannot be agreed to, the two sides exchange figures that are then presented to a referee at a scheduled hearing.

It’s an either/or situation with the judge having no leeway in choosing the middle ground.

Typically, the Yankees settle with their players before the process reaches the hearing stage.

In 2017, the Yankees and Dellin Betances brought their cases to a hearing. The referee opted to side with the team for $3 million instead of the $5 million Betances had asked to be paid.

A Moment The Yankees Would Like To Forget

An embarrassing torrent from Yankees President Randy Levine followed the decision in which he publicly demeaned Betances, creating the appearance of gloating and rubbing it in at the expense of Betances.

Dellin Betances - Signed by the Mets (Photo: pinterest.com)
Dellin Betances – Signed by the Mets (Photo: pinterest.com)

The episode visibly shook Betances, and one might conclude it still stings with him as evidenced by his signing with the Mets and not the Yankees, the only team he’s known.

These are the situations teams and players wish to avoid. Hearings are never pretty when as a player, you sit across from your team, listening to their reps bash you and telling you why you’re not worth the money you are asking.

Remember, too, the numbers presented by Spotrac in the table are only predictions. Readers and Yankees fans will have varying opinions as to what they see as the value of each player.

In that light, for instance, some would say of Aaron Judge, “Are you kidding me – only $6.4 Million? Hell no, give him $10 million and consider it a team steal.” And so on.

No Wiggle Room For The Yankees

Of interest to fans also is the lack of any wiggle room the team has regarding future acquisitions, whether now or at the July trade deadline.

J.A. Happ - Yankees likely trade candidate (Photo: Pinstripe Alley)
J.A. Happ – Yankees likely trade candidate (Photo: Pinstripe Alley)

Any future addition to the team will only add to the Yankees $50 million deficit in over expenditures, and subsequently, the $22 million in tax money owed will only increase.

At this point, reducing the payroll is a mighty challenge for Brian Cashman and the Yankees.

There’s the $17 million the team owes J.A. Happ, a proven starting pitcher they’ve been trying to trade. But so far, there are no takers.

Beyond that, there’s the $5 million the Yankees owe Alex Rodriguez (yeah, can you believe that?) for the 2020 season. A drop in the bucket given the numbers the team is looking at.

The disparity between the Yankees approaches to payroll spending this year against the past two or three seasons is vast and wide.

Principal owner Hal Steinbrenner, perhaps only as a game to humor him, previously had instructed his general manager to toe the line and to fall under the cap. Cashman did, and life went on for the Yankees.

However, back-to-back 100+ win seasons did not bring home the Yankees 28th and very elusive World Championship.

Abrupt Change Means Only One Thing

The abrupt change means only one thing – the Yankees are in it to win it, and the luxury tax is damned.

Money can’t buy you love or World Series titles, though. The Los Angeles Dodgers, who are always number two or three on the spending list, know that stinging lesson even more than the Yankees.

Yankees Cole $324 million a drop in the bucket (Photo: wdun.com)

Wins on the field and especially in the postseason have the Dodgers waiting 38 years and counting for their next title.

After a full decade of waiting for “the next one” themselves, Yankees fans are excited about the return to the good ole days when The Boss said the hell with it, signing CC Sabathia and Mark Teixeira in the same offseason.

Back then, Sabathia was Brian Cashman’s “White Whale.” Today, it’s Gerrit Cole and the $234 million invested in him – to deliver the goods – just as Sabathia did in 2009.

It’s fun to watch from a distance, but I don’t know if I’d want to be part of the pressure-cooker in the Yankees clubhouse or, for that matter, even Hal Steinbrenner answering to his stockholders if the strategy flops.

But then, I guess that’s why they get paid the big bucks…

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Author: stevecontursi

I am an amateur writer with a passion for baseball and all things Yankees and Mets.