ANAHEIM, Calif. – The concern posed by Baltimore Orioles manager Buck Showalter over the New York Yankees escaping their luxury tax woes through a lengthy Alex Rodriguez suspension is a valid one, a worry that if not shared by other American League clubs, should at least have them on notice.
Unshackling the Bronx Bombers from their recent fiscal restraint could have dire repercussions on their rivals, freeing them to again become the off-season monster that poached players through free agency – Showalter pointed to catcher Matt Wieters, under control through 2015 – and traded for available stars.
Whether the Yankees would indeed go off on a spending binge or maintain some of the judicious approach of the past couple off-seasons with Rodriguez off the books is uncertain, but you have to think their recent bottom-feeding can’t last forever.
New Yorkers will only tolerate Jayson Nix and Lyle Overbay on a regular basis for so long.
The Yankees’ pullback from high-priced free agents was due in large measure to the luxury tax threshold increasing from the current $178 million to $189 million for 2014-16, and their tax rate rising from 42.5 per cent to 50 per cent on anything over the limit this year.
Moving under the $189 million mark for next year would reset their tax rate to 17.5 per cent for 2015 if they exceeded the threshold, dramatically changing the structure of their total payroll allocation.
Last year, the Yankees paid $18.9 million in luxury tax, according to The Associated Press, pushing their total bill over the past decade to $224.2 million, the equivalent of a full season of payroll for them.
The threatened lifetime ban of Rodriguez would rid the Yankees of the $86 million due to him through 2017 and do much of the heavy lifting in getting them under $189 million next year, while the savings in ’15, ’16 and ’17 would be an added flexibility bonus.
But even a suspension lasting only for this year and next would be enough to change the game.
Yankees payroll commitments for 2014 include $25 million for Rodriguez, $23.125 million for Mark Teixeira, $23 million to CC Sabathia and $6.5 million to Ichiro Suzuki, while they’re only responsible for $5 million of the $18 million due Alfonso Soriano and $2.4 million of the $21 million owed to Vernon Wells.
Derek Jeter has a player’s option worth $8 million and he’s sure to be back, and the expectation is that free-agency bound all-star second baseman Robinson Cano will re-sign, although the negotiation will be closely watched since he’ll be eyeing the $200-million plateau, especially as agent Jay-Z’s first client.
All that should still allow the Yankees to slide in under $189 million, but take Rodriguez’s $25 million off the books and all of a sudden a run at pending free agents like Matt Garza, Jacoby Ellsbury or Carlos Beltran, or potential trade targets such as Cliff Lee become much more possible.
And with few immediate internal options to plug roster holes coming from their farm system, the potential to spend more freely on the open market affords them the chance to remain competitive without an extensive rebuild.
That, of course, will depend on whether the right players become available and the Yankees make good decisions, but they’ve been competitive this year with lineups that regularly include Nix, Overbay, Wells and Travis Hafner.
There’s some excellent baseball IQ in that front office, but brains alone is one thing, brains with money a whole other animal. Depending on how aggressively commissioner Bud Selig proceeds, the dynamic for off-seasons to come may shift dramatically.
“If Bud lets them get away with that, they’re under the luxury tax,” Showalter told USA Today Sports this week. “If they can reset, they can spend again, and I guarantee you in two years Matt Wieters is in New York.”
That’s why an expected suspension that is so good and so important for baseball is also of great benefit to the Yankees, and potentially of great detriment to the rest of the American League, especially the other four teams in the East, the Toronto Blue Jays included.
