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Yankees hit with $26 million luxury tax, raising total to nearly $98 million

Yankees hit with $26 million luxury tax, raising total to nearly $98 million

World Series titles don't go to Yankee Stadium these days, just tax bills.
The Yankees were slapped with a $26 million (euro20 million) luxury tax by the Major League Baseball commissioner's office on Friday, raising New York's total to $97.75 million (euro74 million) over the last four years.
Boston, which missed the playoffs, was the only other team to exceed the payroll threshold and will pay $497,549 (euro377,000).
New York hasn't won the World Series since 2000, and was knocked out in the first round of the playoffs for the second straight year. The Yankees paid tax in all four seasons of the just-expired collective-bargaining agreement: $11.8 million (euro9 million) in 2003, $26 million (euro20 million) in 2004 and $34 million (euro26 million) for last year.
While the Yankees' spending on players may have decreased because of the tax, the team says any dip was slight.
"I would say it has an effect," Yankees president Randy Levine said. "But at the end of the day, it's always been George Steinbrenner's philosophy to win. If a difference-maker is attainable, the Boss goes and gets him."
At the center of labor negotiations in 2002, the luxury tax was paid by only three teams over the four seasons, with the Red Sox owing $7.8 million (euro6 million) and the Anaheim/Los Angeles Angels $927,057 (euro703,000).
Payments are due at the commissioner's office by Jan. 31. Commissioner Bud Selig concluded the tax achieved the result management wanted.
New York's bill decreased this year because its payroll, as calculated for the tax, declined from $212.9 million (euro161 million) to $201.5 million (euro153 million) and the threshold for where the tax began increased from $128 million (euro97 million) to $136.5 million (euro103 million). Under the new labor contract, the threshold for the tax rises to $148 million (euro112 million) next year.
"The luxury tax is not something the players are in love with because its purpose is to cause people to have an extra cost when they sign a player," union head Donald Fehr said. "Obviously we were prepared to live with it during the term of the last agreement and we got what we expect will be appropriate modifications this time.
"We didn't really envision specific numbers. What we were hoping was that we would see a circumstance in which it did not have a meaningful adverse effect on the player market, and obviously you have to judge that year by year."
Using the regular method of accounting, the Yankees finished with a $207.5 million (euro157 million) payroll for their 40-man roster, according to final figures released on Friday by the commissioner's office, up from $206.6 million (euro156.6 million) in 2005.
Boston was a distant second this year at $137.5 million (euro104 million), followed by the New York Mets ($116.6 million, euro88 million), Houston ($107.7 million, euro81.6 million), the Los Angeles Dodgers ($107.2 million, euro81 million) and the Los Angeles Angels ($104 million, euro79 million).
The World Series champion St. Louis Cardinals were 10th at $96.1 million (euro73 million).
The Florida Marlins were last at $21.1 million (euro16 million).
Management calculated the average salary at $2,642,915 (euro2,003,000). The players' association, whose calculation method differs slightly, had the average at $2,699,292 (euro2,046,000) in its annual report this week.