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Yanks owe $26.9 million luxury tax

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Posted by: min0 lee

New York Yankees, Detroit Tigers must pay*luxury tax - MLB - SI.com



NEW YORK (AP) -- The New York Yankees not only failed to make the playoffs, they were hit with their highest luxury tax in three years.

The Yankees were assessed a $26.9 million tax by the commissioner's office on Monday, up from $23.9 million last year and their biggest bill since paying nearly $34 million for 2005.

The Detroit Tigers, who also failed to qualify for the postseason, are the only other team that must pay tax and owe $1.3 million to the commissioner's office.

Checks are due by Jan. 31.

Both teams got little for what they spent. The Yankees' streak of 13 consecutive playoff appearances ended, and they finished third in the AL East at 89-73, prompting them to spend nearly a quarter-billion dollars to sign pitchers CC Sabathia and A.J. Burnett.

Detroit entered the year with lofty expectations after acquiring Miguel Cabrera and Dontrelle Willis but went 74-88 and finished last in the AL Central.

While the Yankees pay at a 40 percent rate for the amount over $155 million, the Tigers pay at a 22.5 percent rate because they exceeded the specified threshold for the first time.

This year's figure brings the Yankees' total tax to $148.3 million in the six seasons since it began -- 90 percent of the total.

Before this year, the only other teams to pay were the Boston Red Sox, who owed $13.9 million for exceeding the threshold in four seasons, and the Los Angeles Angels, who paid $927,000 in 2004.

New York's payroll was $222.2 million and Detroit was second at $160.8 million for the purpose of the luxury tax. To computer it, Major League Baseball uses the average annual values of contracts for players on 40-man rosters and adds benefits.

The threshold rose from $148 million last year to $155 million this season. It goes up to $162 million next year and rises by $8 million in each of the following two seasons.



Posted by: min0 lee

It's a shame that the owner of the KC will pocket his share instead of spending it on his team.



Posted by: soxmuscle

How do you know he's going to pocket his share and not spend it on his team?

It's not like 1/30th of $26.9 million is going to land you Teixeira or anything...

Odds are the money is being put into the team, whether that be bonus money for draft picks, lesser free agent pick-ups or an increased pay to their centerfielder ala the Coco Crisp trade.



Posted by: min0 lee

Quote:
Originally Posted by soxmuscle View Post
How do you know he's going to pocket his share and not spend it on his team?

It's not like 1/30th of $26.9 million is going to land you Teixeira or anything...

Odds are the money is being put into the team, whether that be bonus money for draft picks, lesser free agent pick-ups or an increased pay to their centerfielder ala the Coco Crisp trade.
I know by reading the papers, how about spending that money on retaining your current players.



Posted by: min0 lee

Quote:
To the Sports Editor:

In ''Even With Veterans, Woeful Royals Are Playing Like Court Jesters,'' (May 28), Jack Curry's statement that the Royal's owner, David Glass, ''has long been stingy with the payroll'' seems an understatement. Kansas City is a classic example of a team that should benefit from baseball's revenue sharing and luxury tax.

The Royals' 2005 payroll, according to USAToday.com, was just below $37 million. But in the same year, according to Murray Chass, the Royals received more than $64 million in combined revenue sharing and luxury tax. These figures, if true, suggest that the Royals are not using their huge surplus of cash to field a better team.

If I was a season ticket holder I would sue that cheap bastard.



Posted by: min0 lee

The Royal Rooters: Luxury Tax Figures, Is Revenue Sharing Working?
Quote:
Still, revenue sharing is clearly a flawed system. There need to be regulations as to how lower salary teams spend the money. Teams like the Florida Marlins get $30 million in revenue sharing, and an additional $30 million in shared profits from mlb.com. That's $60 million before you even factor in the money they make off of ticket sales and merchandising. Yet, the Marlins are expected to have a payroll which could be as low as $15 million next year.




Posted by: min0 lee

Quote:
Alas, not even the most skillful negotiators could devise an economic system to transform mismanaged clubs into contenders. Low-budget teams such as the Royals will receive larger revenue-sharing subsidies, but the agreement doesn't require them to spend the money. In other words, Steinbrenner might be financing the next addition on Royals owner David Glass' mansion. There is nothing to prevent Glass from maintaining low payrolls and dumping high-priced veterans in July, as he did in the past.




Posted by: largepkg

MLB requires all teams receiving luxury tax monies to spend those funds on their team. However it doesn't state where on the team these funds need to be spent.

Most teams use these funds for their farm teams and scouting & front office positions.



Posted by: soxmuscle

I know by reading the papers, how about spending that money on retaining your current players.

***

Who haven't the Royals retained in the last five years?

Joey Gathright?

If anything, the Royals have been the main reason to support the Luxury Tax since Dayton Moore took over as general manager.



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Yanks owe $26.9 million luxury tax


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