The New York Yankees have made a habit out of having the highest payroll in the MLB, but this year, their payroll dropped to third. As Ken Davidoff of the New York Post writes, it's part of the front office's plan to get under the tax threshold before free agency following the 2018 season so they can sign a superstar or two and not have to play an extra tax rate:
Now Steinbrenner seems more determined than ever to beat the threshold and reset the team’s tax rate. The Yankees won’t get under the $195 million threshold this season; even with the AP calculating the current payroll at $195 million, you have to throw in another $16 million for minor-league call-ups, insurance and pension. Next year, though, Alex Rodriguez ($27.5 million), CC Sabathia ($24.4 million) and Matt Holliday ($13 million) headline the group of guys coming off the books, and with the threshold crawling up a smidge to $197 million, that gives the Yankees considerable wiggle room to pay no tax on their 2018 group and subsequently spend big on at least one player from the stellar free-agent class likely to include Bryce Harper, Clayton Kershaw and Manny Machado.
While Steinbrenner’s “We don’t need a $200 million payroll” line has become his mantra, the clear priority for 2019 and beyond will be to stay within $20 million of the threshold, which tops out at $210 million in 2021. A surtax kicks in at that $20 million-over mark — right now, only the Dodgers are on pace for this — and it’s hard to envision any team taking that on with gusto.
The Yankees are where they are primarily because they spent poorly, not because they underspent, in the past. Their future success depends upon investing both plentifully and intelligently. Dropping to third place in this particular category, at this particular time, feels more savvy than stingy. But we’ll be watching to make sure the vision pays off. And pays the players.
Right now, New York only has $70 million tied up for the 2019 season, giving them plenty of room under the tax to work with.
New York has already been linked to Harper, who has reciprocated interest in potentially signing with the team once he hits free agency. The Phillies also plan to pursue Harper and Machado, but you'd certainly think the Yankees would be the most desirable destination for both players.
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