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Yanks hit with $25.7M luxury tax

[December 22, 2009]  NEW YORK (AP) -- Winning came with a hefty price for the New York Yankees.

The World Series champions were hit with a luxury tax of nearly $25.69 million Monday, according to information received by clubs and obtained by The Associated Press.

New York is the only team to pay a tax for this season and has crossed the threshold in all seven years since the tax started. According to the collective bargaining agreement, the Yankees must send a check to the commissioner's office by Jan. 31.

The Yankees have been billed $174 million of the tax's $190 million total since 2003. The only other teams to pay have been Boston ($13.9 million for 2004-7), Detroit ($1.3 million for 2008) and the Los Angeles Angels ($927,059 for 2004).

At least the Yankees got value for their spending, winning the World Series for the first time since 2000 after adding high-priced free agents CC Sabathia, A.J. Burnett and Mark Teixeira. And the Yankees did lower their tax bill from $26.86 million last year, when their streak of consecutive playoff appearances ended at 13.

New York's payroll was $226.2 million for the purpose of the luxury tax and the Yankees pay at a 40 percent rate for the amount over $162 million. To compute the payroll, Major League Baseball uses the average annual values of contracts for players on 40-man rosters and adds benefits.

The Yankees' regular payroll -- using 2009 salaries and prorated shares of signing bonuses -- finished at $220 million. That was a drop of $2.5 million from 2008 but more than $77.8 million higher than any other team -- a gap larger than the payrolls of the bottom 11 clubs.

The New York Mets were second at $142.2 million, followed by the equally disappointing Chicago Cubs ($141.6 million).

Boston ($140.5 million) was next, followed by Detroit ($139.4 million) and NL champion Philadelphia ($138.3 million), a big increase from the $112.7 million the Phillies spent when they won the World Series in 2008.

Only two teams outside the top 11 by payroll made the postseason: Colorado (16th at $84.5 million) and Minnesota (23rd at $73.1 million).

Florida again was last in the majors, even though the Marlins raised their payroll by $10.5 million to $37.5 million. San Diego dropped from 23rd at $71.2 million to 29th at $43.2 million.

Half the 30 teams cut payroll from 2008. In addition to the Padres, Seattle dropped from $120.5 million to $102.3 million, Toronto fell from $98.3 million to $84.1 million and Cincinnati sliced from $82.9 million to $72.7 million.

Besides the Phillies, other teams with big increases were Tampa Bay ($51.0 million to $71.2 million), San Francisco ($82.1 million to $95.2 million), Kansas City ($69.2 million to $81.9 million), the Cubs ($130.5 million to $141.6 million) and Washington ($59.7 million to $69.3 million).

Overall payroll rose 1.2 percent to $2.91 billion from $2.88 billion, down from a 6.3 percent increase the previous year.

Payroll figures are for 40-man rosters and include salaries and prorated shares of signing bonuses, earned incentive bonuses, non-cash compensation, buyouts of unexercised options and cash transactions, such as money included in trades. In some cases, parts of salaries that are deferred are discounted to reflect present-day values.

The commissioner's office computed the average salary at $2,882,336. The players' association, which uses slightly different methods of calculation, had its average at $2,996,106.

[Associated Press; By RONALD BLUM]

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