Luxury Tax Watch: Yankees Payroll Tracker

Newest Yankee Jacoby Ellsbury, who is to sign a seven-year, $153 million contract.
Newest Yankee Jacoby Ellsbury, who is to sign a seven-year, $153 million contract.

The Yankees have been saying for more than a year now that they intend on getting their payroll under the $189 million luxury tax threshold for 2014. It’s been a breath of fresh air coming from the organization that historically has dwarfed all others in its willingness to spend incredible dollars to acquire the biggest and brightest baseball talents.

Then GM Brian Cashman went out and signed catcher Brian McCann for five years and $85 million last week. It caused a little stir.

Then he went out and signed CF Jacoby Ellsbury – former member of hated rival Boston – to a seven-year, $153 million deal a few days ago. That one caused an uproar.

It seems like this offseason has been a page right out of the Yankees’ old playbook. Outspend your competitors to acquire established, All-Star caliber talent already in its prime. And do so without concern over what the upcoming season’s payroll is going to be.

The moves have caused several media members to conclude that New York must have abandoned its goal to avoid the luxury tax next season. And I see how they draw that conclusion, especially considering the Yankees are rumored to still be looking to sign one of Robinson Cano, Shin-Soo Choo or Carlos Beltran along with a starting pitcher.

However, The New York Post is keeping track of the Yankees 2014 payroll commitments, and upon further review I’m not so sure the Bronx Bombers can’t do that and still keep things under the $189 million mark.

Right now, the current official luxury-tax applicable salary obligations are as follows.

$116.38 million

  • Alex Rodriguez ($27.5 million)
  • CC Sabathia ($24.4 million)
  • Mark Teixeira ($22.5 million)
  • Brian McCann ($17 million)
  • Derek Jeter ($12.81 million)
  • Ichiro Suzuki ($6.5 million)
  • Alfonso Soriano ($4 million)
  • Brendan Ryan ($1.67 million)
  • Vernon Wells ($0)

Ellsbury’s deal is not yet official, but his 2014 salary is expected to count about $22 million toward the luxury-tax threshold, bringing the total to around $138 million.

But, if Alex Rodriguez is suspended for all of 2014, which remains very likely even as we wait for an outcome from his grievance hearing,  his $27.5 million comes off the luxury-tax tab. That would lower the overall number to $110.88 million.

That means the Yankees are likely operating as if they have around $78 million they can apply toward players’ 2014 salaries and still not be hit by the dreaded luxury tax. Let’s say they pay $20 million per season for a position/offensive player, and $10-20 million per year toward a pitcher. That would leave $48-38 million still remaining to bolster the current roster.

When you look at the stars already assembled, and the potential money left to build, the Yankees actually seem to be operating with some considerable economic efficiency, which is very unlike them. It’s kind of interesting to see the Yankees piecing their lineup, rotation and bullpen together like a puzzle in this way, operating on a finite budget.

I know the news of the Ellsbury signing was shocking. The Yankees gave him way more money than he was expected to draw, and no one thought they’d be in on the bidding. But it’s not a sign that the organization has thrown all inhibition and fiscal responsibility to the wind. There’s a plan in place, and we won’t really know until opening day whether they are going to be able to stick to it or not.

About Matthew George

Matthew George graduated from the University of Kentucky in 2008 with a bachelor of science in journalism. He spent three years writing sports for the Kentucky Kernel, the university's daily paper, and served as assistant sports editor. After undergrad, Matthew attended Chase College of Law at Northern Kentucky University where he earned his juris doctorate. He is now admitted to practice law in Kentucky and Indiana.

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