Big Apple’s Baseball Team Has Largest Cut Of Luxury Pie Yankees Will Have To Pay $4,438,141 For Having Game’s Highest Payroll

The 1997 season became more expensive for the New York Yankees and four other teams this week. They officially learned the amount of luxury tax they will have to pay, and, as expected, the Yankees owe the biggest share of the $12 million the five teams will pay.

Between now and Jan. 31, according to figures compiled by the Player Relations Committee, the Yankees will have to pay baseball’s tax collector $4,438,141.

That’s because their payroll for luxury tax purposes was $68,267,435, and they have to pay 35 percent of the portion that is above the tax-triggering threshold of $55,587,031.

The other teams that will be forwarding tax checks well before the Federal tax deadline are the Baltimore Orioles, with $4,033,689 tax on a $67,111,858 payroll, the Cleveland Indians $2,072,457 on $61,508,337, the Atlanta Braves $1,306,918 on $59,096,083 and the Florida Marlins $153,046 on $56,024,306.

The tax, a poor man’s salary cap, emerged from the labor dispute that curtailed the 1994 season and delayed the start of the 1995 season. It will be in effect for three years, then disappear for the 2000 season. The teams with the five highest payrolls pay the tax if they are above the threshold.

The 1997 threshold was set in the collective bargaining agreement at $51 million, but it was adjusted upward because the average of the fifth- and sixth-highest payrolls was higher than $51 million, and that figure became the threshold. The tax threshold for next year, going into the season, is $59,922,819.

Eight other clubs had payrolls in excess of $50 million. The Chicago White Sox were the team with the highest payroll that avoided the tax, at $55,149,756.

They benefited from trading Wilson Alvarez, Roberto Hernandez and Danny Darwin to the San Francisco Giants on July 31.

Texas was at $54.4 million, Cincinnati $53.5 million, Toronto $53.5 million, St. Louis $52.4 million, Los Angeles $52.2 million, Seattle $51.6 million and Colorado $51.2 million. The Mets were next at $48,065,800. Pittsburgh had the lowest payroll for tax purposes, $16,594,533.

Under terms of the agreement, the first $10 million of the collected luxury tax goes to fund the shortfall in revenue sharing, another new aspect of the agreement. The tax on the five clubs totaled $12,004,251. The remaining money will be divided among the five American League clubs with the lowest net local revenue in 1996.