SBD/March 2, 2012/Franchises

Steinbrenner Wants To Keep Yankees' Payroll Within Luxury Tax Threshold By '14

Steinbrenner said Yankees will always field a championship-caliber team
Yankees Managing General Partner & co-Chair Hal Steinbrenner said Thursday that he "wants the payroll to be cut by about $20 million, down to the critical threshold of $189 million, within two years," according to David Waldstein of the N.Y. TIMES. Steinbrenner said, "Is it a requirement with baseball that we be at 189? No, it’s not a requirement. But that is going to be the luxury tax threshold, and that’s where I want to be.” The Yankees have "long pushed player salaries and team payrolls ever higher, but with the new basic agreement that was made into baseball law on Nov. 22, teams have been given a huge financial incentive to stay within the $189 million limit" by the beginning of the '14 season. If they "do not get under that figure by 2014, their luxury tax rate could climb to 50 percent." Waldstein notes for a "team like the Yankees, the difference can be as much as $50 million, making it almost financially reckless, in their evaluations, not to be under the threshold within two years." Steinbrenner said that he "badly wanted to avoid that, but he also vowed to remain competitive at the same time." Steinbrenner: “We always will field a championship-caliber team. I’ve said that a thousand times.” Waldstein notes the Yankees have "no hope of getting under the figure this year or next." Steinbrenner said that the payroll was "expected to be $210 million this year, and he conceded that was about $10 million higher than he had planned." But when Senior VP & GM Brian Cashman "asked to sign the free-agent pitcher Hiroki Kuroda to a one-year, $10 million contract, he agreed to stretch the payroll." The Yankees already have $75M "committed to four players" in '14: 3B Alex Rodriguez, P C.C. Sabathia, SS Derek Jeter and 1B Mark Teixeira (N.Y. TIMES, 3/2). ESPN N.Y.'s Wallace Matthews noted the Yankees paid $13.9M in luxury tax on their '11 payroll, the "lowest they had paid" since '03 (ESPNNY.com, 3/1).

COLD TURKEY: In N.Y., Joel Sherman writes Steinbrenner has "two years to wean his organization off its drug of choice." The Yankees "essentially cannot get under the $189 million limbo pole without entrusting much of its rotation to young, inexpensive alternatives." And if they "really do go cold turkey in quest of payroll sobriety, then fans will have to readjust their knee-jerk expectations: Great player available, go buy him." This will mean "no Matt Cain or Cole Hamels in free agency next offseason, or Felix Hernandez if he ever becomes available in a trade" (N.Y. POST, 3/2). The N.Y. Daily News' Tim Smith said of the team's plan, "It actually makes a lot of sense, but we're so used to them spending outrageous amounts of money” (“Daily News Live,” SportsNet N.Y., 3/1). SportsNet N.Y.'s Adam Schein said, "We have already seen evidence of it. The Yankees have been trending this way. The George Steinbrenner Yankees would have signed Prince Fielder to be their designated hitter. That was ‘The George Way.’ The Yankees were never involved on anyone big when it came to the DH spot" ("Loud Mouths," SportsNet N.Y., 3/1). The WALL STREET JOURNAL's Daniel Barbarisi writes the "rare window into Yankee budgetary thinking explains why they have been loathe to go for large, long-term contracts in the past few offseasons, and why the team has been excited to make moves like the one-year deal" for Kuroda and the trade for P Michael Pineda. But it also means the Yankees "will face some very tough decisions in the next two seasons, when the contracts for key players" like CF Curtis Granderson and 2B Robinson Cano expire (WALL STREET JOURNAL, 3/2).

BACKING CASHMAN: On Long Island, Erik Boland notes Steinbrenner Thursday reiterated "the organization's support" for Cashman, despite his recent off-the-field issues. Steinbrenner said, "I'm not going to get into personal situations of employees. That's just not Yankee business. I can only say we're here to support him and he knows that" (NEWSDAY, 3/2).
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