Yankees, Dodgers hit with luxury tax penalties


As repeat offenders, New York has to divvy up $28 million in fees this year. No wonder they want to get under the $189 million threshold next season.

UPDATE 12/17/13 5:30pm ET: The Yankees' luxury tax fees for 2013 will be a little lighter than first anticipated, while the Dodgers' are a little harsher. New York must divvy up $28 million for its payroll overages this season while Los Angeles owes $11.4 million, reports Andrew Marchand of ESPN.

The official MLB figures are slightly different from the calculations made back in September (see: below), but they shouldn't be large enough to have much impact on the clubs. Also of note is that the Boston Red Sox came within $250,000 of eclipsing the $178 million threshold, but snuck in just under the wire.

The luxury tax threshold will increase to $189 million in 2014.

ORIGINAL: The New York Yankees are facing a $29.1 million penalty for going over the luxury tax threshold for the 11th consecutive season, while the Los Angeles Dodgers will been taxed nearly $10 million for their first year over the mark, reports Bob Nightengale of USA Today.

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The Yankees are paying a 50 percent tax on the payroll that has exceeded the $178 million threshold. With payroll this year currently at $236.2 million, that means they have to pay the league half of $58.2 million -- or $29.1MM.

Nightengale claims that the $29.1 million figure is a record penalty, but a quick search reveals that the Bombers had to pay $34 million in taxes back in 2005. Nonetheless, the Bombers have almost single-handedly contributed to the luxury tax fund over the last decade-plus, paying out over 90 percent of the penalties (roughly $253 million) since its inception in 2003.

The only other teams to be hit with luxury tax penalties are the Red Sox ('04-'07, '10-'11), Angels ('04), Tigers ('08), and now the Dodgers. As a first-time offender, Los Angeles will pay only 17½ percent in tax on their payroll overages, meaning the penalty for their $234.5 million payroll will come in around $9.9 million.

Dodgers president Stan Kasten said that the club is "mindful" of the tax, but didn't express too much concern about the possibility of going over the threshold again next season:

"We understand the impact it will be this year and in the future.

"But I think over time, we will become a team that doesn't pay tax. We had quite a significant rebuilding project in front of us, and that is what we turned our attention to.

"Over time, as we start developing our own homegrown players, we expect our payroll to go down."

Unlike Kasten and the Dodgers, the Yankees have made a big to-do over the last several months about wanting to get under the $189 million tax threshold for 2014. Per Baseball Prospectus, New York currently has $89 million in payroll commitments for next season. This number does not include Derek Jeter's 2014 player option -- nor the possibility of Alex Rodriguez's salary coming off the books due to suspension -- so the figure could shift dramatically in either direction over the next few months.

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