Yankees have ‘every intention’ to get under the luxury tax threshold for 2018 season

According to Jon Heyman of FanRag Sports Network, the New York Yankees hope to get below the luxury tax threshold in 2018 for the first time since 2002. Currently, the Yankees payroll is at about $201 million, second to only the Los Angeles Dodgers’ staggering $242 million. The threshold for the 2018 season is $197 million, this was agreed upon in the 2016 Collective Bargaining Agreement. With big-time players like Manny Machado and Bryce Harper set to become free agents in 2019, now is the time to get under the threshold and reset the tax percentage.

Brad Penner | USA TODAY Sports

So, how does getting below the luxury tax for one year help the Yankees?

If they can get and stay below the threshold for all of 2018, then the amount of taxes that would need to be paid if they go back over in 2019 would be reset. Currently, the Yankees pay an extra 50% on every dollar that they are over the threshold. If in 2019 they do go back over the threshold then they would only have to pay an extra 17.5% on every dollar that goes over and it would increase for every year they stay over consecutively, up to 50%.

The timing could not be better for the Yankees, a lot of money comes off the books after the 2017 season and the 2018-2019 free agent class is loaded.

Here’s a quick list of the money set to come off the books:
CC Sabathia - $25,000,000
Alex Rodriguez - $20,000,000
Matt Holliday - $13,000,000
Todd Frazier - $12,000,000
Jaime Garcia - $12,000,000
Masahiro Tanaka (player option available) - $22,000,000


Even if Tanaka doesn’t take his player option, that is still a lot of money that frees up the Yankees significantly. The Yankees’ front office has said in recent years that getting under the threshold was one of their main goals during the “rebuild” but it never happened. 2018 seems like the first season that this is even feasible because of Alex Rodriguez’s and CC Sabathia’s contracts expiring at the same time. The 2017-2018 free agent class is not great so don’t expect any large long-term contracts for the Yankees this offseason. It is possible they resign Sabathia and Todd Frazier but both for a lot less money. With free agents like Machado and Harper right around the corner, it is likely the Yankees save the big money for one or both of them in 2019.

Article by: Paul Alvaro
Follow me on Twitter: @PAlvaro18
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