Yankees, Red Sox only teams subject to luxury tax

Updated: December 21, 2005, 8:50 PM ET
Associated Press

NEW YORK -- The New York Yankees and Boston Red Sox got extra bills Wednesday.

The Yankees were hit with a $34 million luxury tax and the Red Sox were told they owe $4 million to the commissioner's office.

Baseball's biggest rivals, both eliminated in the first round of the postseason, were the only teams to exceed the payroll threshold established in baseball's labor contract, according to figures sent to teams by the commissioner's office.

The Yankees owe $34,053,787 following tax payments of $25,964,060 last year and $3,148,962 in 2003.

Boston must pay $4,156,476, up from $3,148,962 last year.

Because they exceeded the payroll threshold for the third time under the labor contract that began after the 2002 season, the Yankees were taxed at a 40 percent rate on the amount above $128 million. Boston, which topped the threshold for the second time, was taxed at a 30 percent rate.

Checks for the competitive-balance tax, as it is formally known, are due at the commissioner's office by Jan. 31.

Under the labor contract, the Yankees and Red Sox will be the only teams subject to the luxury tax next year and both will pay at a 40 percent rate on the amount over the threshold, which rises to $136.5 million. The collective bargaining agreement expires next December, meaning the sides could negotiate new rules for 2007 and beyond.

Using 40-man rosters, the average annual values of contracts and including benefits, the Yankees' payroll finished at $213.1 million, followed by Boston at $141.9 million, the New York Mets at $119.2 million, the Los Angeles Angels at $115.9 million and Seattle at $111.9 million.

Also Wednesday, the Major League Baseball Players Association said salaries resumed their climb this year after a rare one-season drop.

The average salary rose 7.2 percent to $2,479,125, according to the union's annual study. The increase was the steepest since a 7.3 percent rise in 2002 and followed a 2.5 percent decrease last year -- only the third drop since the union began tracking salaries in 1967.

The Yankees had the highest average salary for the seventh straight season, setting a record at $7,391,168. For the second year in a row, Pittsburgh was the only team with an average below $1 million, finishing at $963,674.

In its first season in Washington, the Nationals averaged $1.91 million, up from $1.23 million in the team's final season as the Montreal Expos. The Florida Marlins dropped their average from $2.12 million to $1.87 million and are likely to have the lowest average next year after shedding nearly all of their veteran players since the end of the season.

The union study was based on the 904 players on Aug. 31 rosters and disabled lists.

Third basemen were the highest-paid players at an average of $5.7 million, followed by outfielders ($4.7 million), first basemen ($4.3 million), designated hitter ($3.9 million), starting pitchers ($3.8 million), catchers ($4.1 million), shortstops ($3.5 million), second basemen ($2.9 million) and relief pitchers ($1.3 million).


Copyright 2005 by The Associated Press

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