The Luxury Tax

  1. You have chosen to ignore posts from S5. Show S5's posts

    The Luxury Tax

    We talk about the Luxury Tax and its impact on spending as if we know what we're talking about -but in some ways we don't.  We don't because we don't know how much teams are willing to spend on salaries + luxury tax, with the luxury tax being considered a cost of doing business.

    We do know that they Yankees are already in the 50% bracket for luxury tax, having spent beyond the limit for four or more years, but does it matter to them?  According to this link http://www.cbssports.com/mlb/eye-on-baseball/23592770/report-yankees-set-to-pay-record-291-million-luxury-tax-bill (which may or may not be accurate as every place I look has different numbers!) the Yankees had a payroll of $236.2M in 2013 plus a luxury tax hit of $29.1M bringing their total cost of putting players on the field to $265.3M. 

    The purpose of this post isn't to whine about the difference between that $265M the Yankees spent and the <$178M the Red Sox spent.  Rather it's to ask why we think the Yankees aren't going to spend this kind of money again.  They obviously have it! I see no reason to believe that they're not going to exceed the $184M cap in 2014. 

    My point?  We're wasting our time speculating on what the Yankees will do and thinking that the Luxury Tax has any bearing on it.  Don't believe their BS about wanting to come in under the $184M cap.  The Yankees FO has a history of playing fast and loose with the truth.  If Cashman told me that water is wet I'd seek a second opinion. They're not done and the luxury tax cap doesn't mean much to them other than it being another business expense. 

     

     
  2. You have chosen to ignore posts from southpaw777. Show southpaw777's posts

    Re: The Luxury Tax

    A 50% tax is considerable for ANY business. Its a good talking point.

    With that said, if the Sox went to 200M this year (189M "cap"), it would only cost them 1.8M whereas it would cost the NYY 5.6M. The NYY almost HAVE to win a WSC in the next 2 years or its all for not. That also makes it a good talking point. They have a number of players on the wrong side of 35 making stupid money. They have some potential in the farm, but its in the lower minors.

     
  3. You have chosen to ignore posts from S5. Show S5's posts

    Re: The Luxury Tax

    In response to southpaw777's comment:
    [QUOTE]

    A 50% tax is considerable for ANY business. Its a good talking point.

    With that said, if the Sox went to 200M this year (189M "cap"), it would only cost them 1.8M whereas it would cost the NYY 5.6M. The NYY almost HAVE to win a WSC in the next 2 years or its all for not. That also makes it a good talking point. They have a number of players on the wrong side of 35 making stupid money. They have some potential in the farm, but its in the lower minors.

    [/QUOTE]
    This post brings me around to another point I wanted to get to, and it's that not being public companies, we don't know how much teams are making.  There are many revenue streams that pour into MLB teams.  Is it possible that teams can pay the salaries they're paying in 2014 and still make money?  And if so, how much were they making in, say, 2010??

    I don't begrude them their profit...much, although it does irk me to think that I may be paying >$100 for a seat to one game if owners are bleeding money - but I don't even KNOW that's happening. 

    But again, my point is that our speculating on how much money they willl spend is purely speculation.  Owners are in business to make money and whatever they don't pay in expenses is theirs.  That's an incentive to spend as little as possible and an even bigger incentive to not overspend beyond anticipated revenues.  Contracts like the ones Ellsbury, Crawford and now Cano signed lead me to believe that there's one He11 of a lot of money out there and our speculating on who's going to spend what is .... frankly... a waste of time.    

     

     
  4. You have chosen to ignore posts from pinstripezac35. Show pinstripezac35's posts

    Re: The Luxury Tax

    GM S5

    can't say whether the yanks will meet their 189 dream of not

    while it's true they have paid the tax every yr the difference now is

    with the new agreement they can reset that 50% tax

    to 22 % the next time they go over it

    now it also effects their rev sharring kick back

    so we are talking saving a lot of money that wasn't in play in yrs past

    question is is it more than they lose by not making the PO ( 50/60 m)

     

     

    ironically while the tax was passed to curb the nyy

    it really has hurt teams like the sox more

     

     
  5. You have chosen to ignore posts from pinstripezac35. Show pinstripezac35's posts

    Re: The Luxury Tax

    In response to S5's comment:


    This post brings me around to another point I wanted to get to, and it's that not being public companies, we don't know how much teams are making.  There are many revenue streams that pour into MLB teams. 

    especially for teams who own their own network

    they can underpay the team for the rights

     

    Is it possible that teams can pay the salaries they're paying in 2014 and still make money?  And if so, how much were they making in, say, 2010??

    there are some that will say that long term it's more about building the brand than net profit

    but to answer your Q I have read the nyy break even payroll is 300

     


    Owners are in business to make money and whatever they don't pay in expenses is theirs.  That's an incentive to spend as little as possible and an even bigger incentive to not overspend beyond anticipated revenues.

    I guess their are 2 ways of doing biz

    some say, the uncle geo included, it takes money to make more money

    pirates got some heat for doing what U R suggesting

    4 not spending their rev sharing check

     

    But again, my point is that our speculating on how much money they willl spend is purely speculation. 

    true as is 93% of this board

    Contracts like the ones Ellsbury, Crawford and now Cano signed lead me to believe that there's one He11 of a lot of money out there and our speculating on who's going to spend what is .... frankly... a waste of time.    

     what many yankee haters fail 2C is that

    it is a biz, and name brands sell best

    so a players value is not only about those superstats they like to throw out their




     
  6. You have chosen to ignore posts from crazyworldoftroybrown. Show crazyworldoftroybrown's posts

    Re: The Luxury Tax

    Hopefully in a couple of years it wont be a headache for the Sox, if the Prospects work out.

    I remember when Free Agency Started, it was suppose to be a Stopgap, until the Prospects were ready. An area of weakness for a team.

     
  7. You have chosen to ignore posts from tcal2-. Show tcal2-'s posts

    Re: The Luxury Tax

    The Luxury Tax is meaningless to the Yankees.  Here's a blurb from a 2012 Newsday article.

    YES Network next Tuesday will celebrate its 10th anniversary on the air, and while other "pro and college teams and leagues ... were inspired by dollar signs to start their own versions of team-owned channels," none of them can "match YES in viewership or value," according to Neil Best of NEWSDAY. The net, which was officially launched on March 19, 2002, is valued at $2-3B, making it "worth much more" than the Yankees themselves. YES President & CEO Tracy Dolgin, who has held his position since '04, yesterday acknowledged that the network "benefits from the team's commitment to consistently contending." Best notes that helps "not only with advertising but, more importantly, in securing the subscriber fees that are the bulk of every regional sports network's revenues." 

     
  8. You have chosen to ignore posts from Hfxsoxnut. Show Hfxsoxnut's posts

    Re: The Luxury Tax

    I have the Yankees at close to 200 million right now for tax purposes.  But the x factor is A-Rod's 27.5 million.  If he is suspended for the year they are at about 170 million.

     
  9. You have chosen to ignore posts from craze4sox. Show craze4sox's posts

    Re: The Luxury Tax

    In response to S5's comment:
    [QUOTE]

    We talk about the Luxury Tax and its impact on spending as if we know what we're talking about -but in some ways we don't.  We don't because we don't know how much teams are willing to spend on salaries + luxury tax, with the luxury tax being considered a cost of doing business.

    We do know that they Yankees are already in the 50% bracket for luxury tax, having spent beyond the limit for four or more years, but does it matter to them?  According to this link http://www.cbssports.com/mlb/eye-on-baseball/23592770/report-yankees-set-to-pay-record-291-million-luxury-tax-bill (which may or may not be accurate as every place I look has different numbers!) the Yankees had a payroll of $236.2M in 2013 plus a luxury tax hit of $29.1M bringing their total cost of putting players on the field to $265.3M. 

    The purpose of this post isn't to whine about the difference between that $265M the Yankees spent and the <$178M the Red Sox spent.  Rather it's to ask why we think the Yankees aren't going to spend this kind of money again.  They obviously have it! I see no reason to believe that they're not going to exceed the $184M cap in 2014. 

    My point?  We're wasting our time speculating on what the Yankees will do and thinking that the Luxury Tax has any bearing on it.  Don't believe their BS about wanting to come in under the $184M cap.  The Yankees FO has a history of playing fast and loose with the truth.  If Cashman told me that water is wet I'd seek a second opinion. They're not done and the luxury tax cap doesn't mean much to them other than it being another business expense. 

     

    [/QUOTE]

    The luxury tax is only as good as you make it across the board.  In the Yankees case, or any other team there should still be a cap with no exceptions a team could meet.  We all know that will never happen because baseball also wants a piece of the Yankees pie.

     
  10. You have chosen to ignore posts from billge. Show billge's posts

    Re: The Luxury Tax

    With the ability to spend all they want, Yankee management has become inept . They should win more with this advantage, in spite of Steinbrenners under the cap propaganda which is always BS

     
  11. You have chosen to ignore posts from moonslav59. Show moonslav59's posts

    Re: The Luxury Tax

    Doesn't going over the luxury tax limit also limit some shared revenues?

    Doesn't the luxury tax money go into the player pension fund thereby possibly lessening team's contribution amounts in future years? This would provide more salary budget space for thse teams walking the fine line under the luxury tax limit number.

    Yes, the Yanks have tons more money than the rest of us, but they still have limits otherwise, they'd have signed everyone they have plus Cano. 

     
  12. You have chosen to ignore posts from BosoxJoe5. Show BosoxJoe5's posts

    Re: The Luxury Tax

    In response to craze4sox's comment:
    [QUOTE]

    In response to S5's comment:
    [QUOTE]

    We talk about the Luxury Tax and its impact on spending as if we know what we're talking about -but in some ways we don't.  We don't because we don't know how much teams are willing to spend on salaries + luxury tax, with the luxury tax being considered a cost of doing business.

    We do know that they Yankees are already in the 50% bracket for luxury tax, having spent beyond the limit for four or more years, but does it matter to them?  According to this link http://www.cbssports.com/mlb/eye-on-baseball/23592770/report-yankees-set-to-pay-record-291-million-luxury-tax-bill (which may or may not be accurate as every place I look has different numbers!) the Yankees had a payroll of $236.2M in 2013 plus a luxury tax hit of $29.1M bringing their total cost of putting players on the field to $265.3M. 

    The purpose of this post isn't to whine about the difference between that $265M the Yankees spent and the <$178M the Red Sox spent.  Rather it's to ask why we think the Yankees aren't going to spend this kind of money again.  They obviously have it! I see no reason to believe that they're not going to exceed the $184M cap in 2014. 

    My point?  We're wasting our time speculating on what the Yankees will do and thinking that the Luxury Tax has any bearing on it.  Don't believe their BS about wanting to come in under the $184M cap.  The Yankees FO has a history of playing fast and loose with the truth.  If Cashman told me that water is wet I'd seek a second opinion. They're not done and the luxury tax cap doesn't mean much to them other than it being another business expense. 

     

    [/QUOTE]

    The luxury tax is only as good as you make it across the board.  In the Yankees case, or any other team there should still be a cap with no exceptions a team could meet.  We all know that will never happen because baseball also wants a piece of the Yankees pie.

    [/QUOTE]

    You mean there should be a salary floor. The NHL has one, the NFL has a defacto one, baseball needs to require that at the very least the owner need to spend the money they get from the  big market teams. There is no reason every team could spend at least 75 million

     
  13. You have chosen to ignore posts from S5. Show S5's posts

    Re: The Luxury Tax

    In response to moonslav59's comment:
    [QUOTE]

    Doesn't going over the luxury tax limit also limit some shared revenues?

    Doesn't the luxury tax money go into the player pension fund thereby possibly lessening team's contribution amounts in future years? This would provide more salary budget space for thse teams walking the fine line under the luxury tax limit number.

    Yes, the Yanks have tons more money than the rest of us, but they still have limits otherwise, they'd have signed everyone they have plus Cano. 

    [/QUOTE]
    Here's a link to an article on luxury tax vx. revenue sharing.

    http://bizofbaseball.com/index.php?option=com_content&view=article&id=4298:dosh-mlbs-revenue-sharing-and-the-luxury-tax-are-not-one-in-the-same&catid=29:articles-a-opinion&Itemid=41

    For anyone who's interested it's a pretty good read, written in a launguage real p[eople can undestand.

     

     

     
  14. You have chosen to ignore posts from S5. Show S5's posts

    Re: The Luxury Tax

    In response to pinstripezac35's comment:
    [QUOTE]

    GM S5

    can't say whether the yanks will meet their 189 dream of not

    while it's true they have paid the tax every yr the difference now is

    with the new agreement they can reset that 50% tax

    to 22 % the next time they go over it

    now it also effects their rev sharring kick back

    so we are talking saving a lot of money that wasn't in play in yrs past

    question is is it more than they lose by not making the PO ( 50/60 m)

     

     

    ironically while the tax was passed to curb the nyy

    it really has hurt teams like the sox more

     

    [/QUOTE]
    IMO there's no way they can meet that $189M dollar mark and be competitive.  They screwed that pooch with the Ellsbury signing.  The only question now in my mind is how much they're willing to exceed it by. And with these long term contracts what they're spending this year they're also spending in the future.  To state the obvious, that's why these long term high dollar contracts are so limiting for the future of a team.  The AAV stays there every year until the player is no longer with the team, keeping the team above the luxury tax limit.

    Without access to their books it appears that the Yankees are in a very envious situation.  They seem to have the largest revenue stream of any team by a large margin and therefore have a lot more money to spend.  There's a lot that goes into that, not the least of which is the fact that the cost of living is high in NYC so people expect to pay a lot of money for tickets - an expectation the Yankees are very glad to meet.  I was in YS a couple of years ago and paid >$100 for a seat directly behind the LF foul pole.  A price like that for a seat like that would be unheard of any just about any other ballpark, but it flies in NYC.

    With the luxury tax premium, every dollar the Yankees spend above $189M costs the Yankees $1.50 while every dollar the Sox spend above that limit costs them $1.175.  The issue then becomes whether the Y's have the revenue stream to support that, and it appears that they do.  In a nutshell, I agree with Zac that the luxury tax hurts the Sox and teams like them more than it hurts the Yankees just because of the differential in revenue.

    My opinion FWIW is that the Yankees are playing a very dangerous game.  They're trying to overspend for players in the hope that it will translate into wins, which will bring more fans to the park which will translate into more money for the ownership. If this works the Y's will have the revenue to support this, but if it doesn't work and people stay away in droves because they don't want to watch a losing team the whole Yankee financial structure will crumble beneath them.

    -just my sometimes wrong and often over-simplistic opinion.

     

     
  15. You have chosen to ignore posts from steven11. Show steven11's posts

    Re: The Luxury Tax

    In response to S5's comment:
    [QUOTE]

    We talk about the Luxury Tax and its impact on spending as if we know what we're talking about -but in some ways we don't.  We don't because we don't know how much teams are willing to spend on salaries + luxury tax, with the luxury tax being considered a cost of doing business.

    We do know that they Yankees are already in the 50% bracket for luxury tax, having spent beyond the limit for four or more years, but does it matter to them?  According to this link http://www.cbssports.com/mlb/eye-on-baseball/23592770/report-yankees-set-to-pay-record-291-million-luxury-tax-bill (which may or may not be accurate as every place I look has different numbers!) the Yankees had a payroll of $236.2M in 2013 plus a luxury tax hit of $29.1M bringing their total cost of putting players on the field to $265.3M. 

    The purpose of this post isn't to whine about the difference between that $265M the Yankees spent and the <$178M the Red Sox spent.  Rather it's to ask why we think the Yankees aren't going to spend this kind of money again.  They obviously have it! I see no reason to believe that they're not going to exceed the $184M cap in 2014. 

    My point?  We're wasting our time speculating on what the Yankees will do and thinking that the Luxury Tax has any bearing on it.  Don't believe their BS about wanting to come in under the $184M cap.  The Yankees FO has a history of playing fast and loose with the truth.  If Cashman told me that water is wet I'd seek a second opinion. They're not done and the luxury tax cap doesn't mean much to them other than it being another business expense. 

     

    [/QUOTE]


    I know I have never believed they wanted to come under the tax.  Their primary goal is to put a winning team on the field and they have the dollars to do it.

     
  16. You have chosen to ignore posts from S5. Show S5's posts

    Re: The Luxury Tax

    In response to BosoxJoe5's comment:
    [QUOTE]

    In response to craze4sox's comment:
    [QUOTE]

    In response to S5's comment:
    [QUOTE]

    We talk about the Luxury Tax and its impact on spending as if we know what we're talking about -but in some ways we don't.  We don't because we don't know how much teams are willing to spend on salaries + luxury tax, with the luxury tax being considered a cost of doing business.

    We do know that they Yankees are already in the 50% bracket for luxury tax, having spent beyond the limit for four or more years, but does it matter to them?  According to this link http://www.cbssports.com/mlb/eye-on-baseball/23592770/report-yankees-set-to-pay-record-291-million-luxury-tax-bill (which may or may not be accurate as every place I look has different numbers!) the Yankees had a payroll of $236.2M in 2013 plus a luxury tax hit of $29.1M bringing their total cost of putting players on the field to $265.3M. 

    The purpose of this post isn't to whine about the difference between that $265M the Yankees spent and the <$178M the Red Sox spent.  Rather it's to ask why we think the Yankees aren't going to spend this kind of money again.  They obviously have it! I see no reason to believe that they're not going to exceed the $184M cap in 2014. 

    My point?  We're wasting our time speculating on what the Yankees will do and thinking that the Luxury Tax has any bearing on it.  Don't believe their BS about wanting to come in under the $184M cap.  The Yankees FO has a history of playing fast and loose with the truth.  If Cashman told me that water is wet I'd seek a second opinion. They're not done and the luxury tax cap doesn't mean much to them other than it being another business expense. 

     

    [/QUOTE]

    The luxury tax is only as good as you make it across the board.  In the Yankees case, or any other team there should still be a cap with no exceptions a team could meet.  We all know that will never happen because baseball also wants a piece of the Yankees pie.

    [/QUOTE]

    You mean there should be a salary floor. The NHL has one, the NFL has a defacto one, baseball needs to require that at the very least the owner need to spend the money they get from the  big market teams. There is no reason every team could spend at least 75 million

    [/QUOTE]

    There already is a floor.  It's call the Major League Minimum.  The problem with it is that with the ever-escalating salaries it has little bearing on what most of the players are getting. 

    I certainly agree that every team should be required to spend an amount based on what they get from Revenue Sharing on player's salaries.  As it currently stands the teams are required to only spend the revenue sharing money on "baseball-related activites", a nebulous statement at best.

    The Luxury Tax, OTOH, is used for "player benefits" (50%) which could be the retirement fund, 25% to the Industry Growth Fund, and the remaining 25% is used to support baseball activites in other countries.  None of it is intended to be used for player's salaries.

     

     
  17. You have chosen to ignore posts from sportsbozo1. Show sportsbozo1's posts

    Re: The Luxury Tax

    In response to pinstripezac35's comment:
    [QUOTE]

    GM S5

    can't say whether the yanks will meet their 189 dream of not

    while it's true they have paid the tax every yr the difference now is

    with the new agreement they can reset that 50% tax

    to 22 % the next time they go over it

    now it also effects their rev sharring kick back

    so we are talking saving a lot of money that wasn't in play in yrs past

    question is is it more than they lose by not making the PO ( 50/60 m)

     

     

    ironically while the tax was passed to curb the nyy

    it really has hurt teams like the sox more

     

    [/QUOTE] Just so you know the Yankees have virtually no  chance at coming in at under 189mil. they've handed out contracts totaling 311mil this off season. They were at approx. 124 mil., without Arod being counted in, and without any of the high ticket items they purchased recently. Ellsbury is 22.5 per, McCann is 18.mil per, Beltran is a cool 15 mil. per, and 16 mil for Korrosion Kuroda. My basic math tells me they are already appraoching 200 mil +!!! Wait til Arod wins his case they are in a world of do-do! Plus they are an ancient group with a lot of injuries....No pitching means they gotta spend big time,still!


     
  18. You have chosen to ignore posts from moonslav59. Show moonslav59's posts

    Re: The Luxury Tax

    Cot's has the Yanks at $228.1M counting ARod, but that is not average anual salary used to calculate the luxury tax number.

    AVV

    ARod $27.5M

    Sab   $24.4M

    Tex  $22.5M

    Ells  $22M

    McCann $17M

    Kuroda $16M

    Beltran $15M

    Jeter  $12M

    Susuki $6.5M

    Wells $6M

    Sori $4M 

    Johnson $3M

    Ryan $2.5M

     

    That's over $140M without ARod and over $165M with him just for these guys.

     

     

     

     

     

     

     

     

     

    Wells

    Sori

     

     
  19. You have chosen to ignore posts from kimsaysthis. Show kimsaysthis's posts

    Re: The Luxury Tax

    In response to craze4sox's comment:
    [QUOTE]

    In response to S5's comment:
    [QUOTE]

    We talk about the Luxury Tax and its impact on spending as if we know what we're talking about -but in some ways we don't.  We don't because we don't know how much teams are willing to spend on salaries + luxury tax, with the luxury tax being considered a cost of doing business.

    We do know that they Yankees are already in the 50% bracket for luxury tax, having spent beyond the limit for four or more years, but does it matter to them?  According to this link http://www.cbssports.com/mlb/eye-on-baseball/23592770/report-yankees-set-to-pay-record-291-million-luxury-tax-bill (which may or may not be accurate as every place I look has different numbers!) the Yankees had a payroll of $236.2M in 2013 plus a luxury tax hit of $29.1M bringing their total cost of putting players on the field to $265.3M. 

    The purpose of this post isn't to whine about the difference between that $265M the Yankees spent and the <$178M the Red Sox spent.  Rather it's to ask why we think the Yankees aren't going to spend this kind of money again.  They obviously have it! I see no reason to believe that they're not going to exceed the $184M cap in 2014. 

    My point?  We're wasting our time speculating on what the Yankees will do and thinking that the Luxury Tax has any bearing on it.  Don't believe their BS about wanting to come in under the $184M cap.  The Yankees FO has a history of playing fast and loose with the truth.  If Cashman told me that water is wet I'd seek a second opinion. They're not done and the luxury tax cap doesn't mean much to them other than it being another business expense. 

     

    [/QUOTE]

    The luxury tax is only as good as you make it across the board.  In the Yankees case, or any other team there should still be a cap with no exceptions a team could meet.  We all know that will never happen because baseball also wants a piece of the Yankees pie.

    [/QUOTE]


    This is true, and it's a shame. It's beyond unbalanced when the Yankees really have no limit giving their circumstances. It's a joke to them.

     
  20. You have chosen to ignore posts from kimsaysthis. Show kimsaysthis's posts

    Re: The Luxury Tax


    The Yankees inability to sign Cano has nothing to do with luxury tax or the cost for him. IMO Something went wrong there, and Cano was no longer interested in being there, or talking to them. Maybe a meeting went bad or something, maybe things were said, but there's no way their #1 player and the future face of the Yankees just left because another team offered more. I'll never believe it.

     
  21. You have chosen to ignore posts from kimsaysthis. Show kimsaysthis's posts

    Re: The Luxury Tax


    Hey, maybe something came up in the ARod investigation. They're obviously friends and the visit the same clinic. Maybe he was unhappy about something to do with that situation.

     
  22. You have chosen to ignore posts from southpaw777. Show southpaw777's posts

    Re: The Luxury Tax

    NYY can spend all they want. Doesnt change the fact that in todays MLB its going to be a lot harder to maintain consistent success doing it this way. You have to have a good organization top to bottom. A constant flow of young talent mixed with FA and smart trades. Having a group of 35+yo and declining players is asking for trouble. Teams are starting to lock up young talent more and more. There will always be FA, but most are 30+ and you lose out on young talent in the draft. NYY lost their 1st rd pick AND both comp picks. Apparently the future isnt a concern for them.

     
  23. You have chosen to ignore posts from pinstripezac35. Show pinstripezac35's posts

    Re: The Luxury Tax

    In response to kimsaysthis' comment:
    [QUOTE]


    The Yankees inability to sign Cano has nothing to do with luxury tax or the cost for him. IMO Something went wrong there, and Cano was no longer interested in being there, or talking to them. Maybe a meeting went bad or something, maybe things were said, but there's no way their #1 player and the future face of the Yankees just left because another team offered more. I'll never believe it.

    [/QUOTE]


    there was a writer trying to sell the story he left because he didn't like playing for girardi

    U can believe that while the rest of us  will think it was the 40 million dollars

     

     
  24. You have chosen to ignore posts from Hfxsoxnut. Show Hfxsoxnut's posts

    Re: The Luxury Tax

    One thing's for sure, the Red Sox have nothing to cry about when it comes to the ability to spend.  We may not be staying under the 189 million this year ourselves.

    Even those little 15-16 million a year contracts add up in a hurry LOL

     
  25. You have chosen to ignore posts from moonslav59. Show moonslav59's posts

    Re: The Luxury Tax

    In response to S5's comment:
    [QUOTE]

    In response to moonslav59's comment:
    [QUOTE]

    Doesn't going over the luxury tax limit also limit some shared revenues?

    Doesn't the luxury tax money go into the player pension fund thereby possibly lessening team's contribution amounts in future years? This would provide more salary budget space for thse teams walking the fine line under the luxury tax limit number.

    Yes, the Yanks have tons more money than the rest of us, but they still have limits otherwise, they'd have signed everyone they have plus Cano. 

    [/QUOTE]
    Here's a link to an article on luxury tax vx. revenue sharing.

    http://bizofbaseball.com/index.php?option=com_content&view=article&id=4298:dosh-mlbs-revenue-sharing-and-the-luxury-tax-are-not-one-in-the-same&catid=29:articles-a-opinion&Itemid=41

    For anyone who's interested it's a pretty good read, written in a launguage real p[eople can undestand.

     

     

    [/QUOTE]

    Thanks.

    The revenue sharing piece is pretty confusing even when dumbed down...

    Here are some tidbits from this article:

    “According to the Biz of Baseball, the Yankees have accounted for $175 million – or 92% – of all revenue-sharing payments since revenue sharing was instituted.”

     

    The 2002 CBA saw the luxury tax become the competitive balance tax and introduced a somewhat new system. Much higher thresholds were set for 2003-2006:

    • 2003: $117m
    • 2004: $120.5m
    • 2005: $128m
    • 2006: $136.5m

    Increasing penalties for repeats offenders was also introduced, making it clear that the tax was meant as a deterrent and a penalty:

    • 2002 First-Time Offenders: 17.5%
    • 2003 First-Time Offenders: 22.5%
    • Second-Time Offenders: 30%
    • Third-Time Offenders: 40%

    The distribution of funds also evolved, no longer providing for funding to low revenue clubs, thus distinguishing it entirely from revenue sharing. The first $5m would go to refund for any miscalculaations, then 50% would go to player benefits, 25% to the Industry Growth Fund, and 25% to developing baseball in countries without high school programs.

    The 2006 CBA kept the basic model of the 2002 CBA with adjustments for thresholds and taxation amounts:

    • 2007: $148m
    • 2008: $155m
    • 2009: $162m
    • 2010: $170m
    • 2011: $178m

    Penalties also increased:

    • First-Time Offenders: 22.5%
    • Second-Time Offenders: 30%
    • Third-Time Offenders: 40%

    Distributions remain roughly the same and continued the trend towards fudning player benefits with the tax money. The first $2.5m is set aside for refunds, then 75% for player benefits and 25$ to the Industry Growth Fund. Thus, the tax is not distributed to low revenue clubs.

    Now back to the statements by Mr. Lacques and Mr. Marchand. The Yankees have not paid 92% of the total amount of revenue sharing distributed. They have, however, paid 92% of the luxury/competitive balance tax over the years. They are the only club to have paid the tax each and every year since its inception.

     

    If you want to understand more about these provisions and how they evolved, you can check out my article in the University of Denver Sports and Entertainment Law Journal here. I’m also covering all of this in my book, which is coming soon!

     
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