Yankees plan to cut payroll

Hal Steinbrenner.

You’ll have to excuse Yankees fans if their first reaction to hearing the team wants to cut payroll is dumbfounded surprise.

But according to Yankees managing general partner Hal Steinbrenner that concept is a very real one, especially with a luxury tax threshold of $189 million being put in place in two years.

“The 189 in two years is definitely a goal of ours,” Steinbrenner told reporters Thursday in Tampa. “We’re not too far off. We’re going to have a very similar payroll this year to last year, but I think we have a better team. Somewhat of an accomplishment I guess, on paper anyway.

“We’ll see, but yes that 189 is a real number and we’re going to be shooting for it.”

Presently the threshold for the luxury tax is $178 million. That figure will increase to $189 million for 2014, 2015 and 2016.

The Yankees have an estimated payroll of $210 million in 2012 — the fifth-straight season they have been over $200 million and the sixth time they have been over that mark. They haven’t been below $189 million since the 2004 team’s payroll was $184,193,950.

This year, the Yankees will be taxed at a rate of 42 percent while next year that rate goes up to 50 percent. Last year, their tax bill was $13.9 million and in 2010 it was $18 million.

If the $189 million payroll becomes the reality Steinbrenner is aiming for, their rate will reset to 17.5 percent according to the new collective bargaining agreement signed this offseason.

“Luxury tax is an option,” Steinbrenner said. “It’s a personal option.
We go into it knowing exactly what we’re doing. Being the only team that
does it, I’m just not convinced we need to be as high as we’ve been in
the past to field a championship-caliber team.

Steinbrenner believes that can be realistic achievement based on the amount of arms that will be under team control for the next few years. That includes Michael Pineda and Ivan Nova, who combined for 25 wins last year and will make a combined $846,900 this season.

“I’m a finance geek, I guess I always have been,” Steinbrenner said. “That’s my background. Budgets and balance sheets matterI just feel that if you do well on the player development side and you have a good farm system, you don’t need a $220 million payroll.”

The downside to the 2014 figure is $25 million is committed to Alex Rodriguez, $23 million to CC Sabathia and $22.5 million to Mark Teixeira. They will also have to sign Robinson Cano to a new deal since he can become a free agent after 2013.

Follow Yankees beat writer Larry Fleisher on Twitter @LarryFleisher.


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