SBD/January 2, 2014/Franchises

Yankees Reportedly On Pace To Shatter Int'l Spending Record Through CBA Loophole

The Yankees aim to spend $12-15M in "bonuses on international amateurs this year, which would trigger penalties" of about $10-12M per to the two-year-old rules in the CBA that limit int'l spending, according to a source cited by Kiley McDaniel of The total outlay of about $25M would "blow away a record" the Rangers set in '11 of about $15M of "all penalty-free bonuses." MLB "hasn’t notified clubs of their 2014 international spending pools yet, but the Yankees are expected to have a pool amount" between $2-2.5M. They would be "taxed 100% on any dollar they spend over 10% above that amount and the maximum penalty (for going over 15% above the pool amount) is not being allowed to sign a player for above a $300,000 bonus for the next two years." This "isn’t a novel strategy," as the Rays "spent over 15% above their bonus pool" in '12 and the Rangers and Cubs did it in '13. With at least three big-market clubs in two years "exploiting this loophole and the Yankees planning to do it in extreme fashion, MLB will likely be forced to change the rules yet again in the short term, possibly as soon as next season and possibly with the switch to an international draft." If an int'l draft is in place for '15, the Yankees' "two-year bonus limit penalty would change to losing their first round pick in the international draft for the next two years." Clubs are "unsure how close MLB is to instituting a international draft, something the CBA allows MLB to do when it sees fit" (, 12/30).

THE BOTTOM LINE: In N.Y., Joel Sherman wrote the case could be made that the Yankees' "best chance to upgrade their prospect base while dropping under the threshold was last season." Instead, the Yankees "responded, for example, by adding" $11.5M last year for LF Vernon Wells. On one hand, "good for the Steinbrenner family for always going for it." On the other, "bad for the Steinbrenner family for not recognizing sometimes you have to punt for better field position." But missing the playoffs in '13 "seems to have triggered that never-surrender DNA in the organization again." Combine that with "rising prices for top players and the Yanks’ zeal to compensate for the free-agent loss" of 2B Robinson Cano, and "suddenly they are roughly at" $209M for luxury-tax purposes in '14 (N.Y. POST, 12/31).
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