Over the past few years, the Yankees have repeatedly talked about operating under a budget, but the team has always been willing to break through those constraints when push came to shove. Just ask Mark Teixeira. However, according to a recent report by Joel Sherman, the new CBA could make sticking to a budget an offer not even the Yankees can afford to refuse.
In 2008, the Yankees’ decided to exceed their “budget” in order to sign Mark Teixeira. (Photo: Getty Images)
There are several components of the new CBA that could increase the burden for teams whose payrolls exceed $179 million ($189 million starting in 2014). The most stringent is the 10 percentage point increase in the tax rate for habitual offenders. Not only would a team like the Yankees be forced to a pay a 50% penalty for every dollar spent over the limit, but by exceeding the barrier repeatedly, it would become ineligible to receive a new revenue sharing refund designed to return money that in the past would have been earmarked to large market teams that qualified for a payout.
So, does this mean Yankees’ fan should expect the Bronx Bombers to embark on a long-term plan of fiscal restraint? Probably not. Instead of representing a complete reversal of economic philosophy, the Yankees’ aim could simply be to play the 2014 season under the luxury tax threshold. By dropping down below that barrier, the team’s assessable penalty would reset at a 17% rate (and not reach 50% again until 2019, assuming the Yankees exceed the limit in every subsequent season and no changes are made in the next CBA). What’s more, the team would also become eligible for the aforementioned revenue sharing rebate because disqualification is only triggered when a team exceeds the limit in two straight seasons. In a sense, the Yankees’ new fiscal policy could be more about pressing the reset button than completely changing the rules.
The Captain's Blog 