Friday, February 17, 2012

How does the AJ Burnett trade affect the Yankees payroll?

Yeah, I'd try to hide the tears rolling down my cheeks if I found out I was going from the Yankees to the Pirates too.

Ever since the rumor of trading AJ Burnett to Pittsburgh started I wondered how the money exchanged would affect the Yankees' payroll, in terms of the MLB Luxury Tax.

Would the money that Pittsburgh would be on the hook for (now we know it will be $13 million) be subtracted from what's left on the contract (leaving $20 million), and the difference would be split among the last two years of the Burnett's deal (which would mean the Yankees would take a hit of $10 million in 2012 and 2013)? As I originally thought.

Or maybe the Yankees would be hit with all the money left on the deal in 2012 ($20 million)? Then again, since this seems to be all about freeing up money to sign a part-time DH and back-up IF, a highly doubt that. Otherwise the Yankees would be looking at having to pay an extra $3.5 million this season, instead of saving money.

Well I think I found it thanks to, who I've used before for information regarding the way the MLB Luxury Tax affects things.
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.
Well, it turns out that the Pirates will be paying Burnett $5 million in 2012, and $8 million in 2013, per the terms of the trade. So according to the quote above, that means the Yankees will take a hit of $11.5 million in 2012, and $8.5 million in 2013, as that will be how the money is given to Pittsburgh.

This means the Yankees will only have an extra $5 million to "play with" this off-season, as opposed to the $6.5 million I originally thought, which still seems like enough to get Raul Ibanez and Eric Chavez. But the team has also freed up a little bit more money than I thought for the next off-season. Not that the extra $1.5 million will be enough to sign Cole Hamels, but both Eric Chavez and Freddy Garcia made $1.5 million last season, so that money can come in handy.

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Sorry for the Capatcha... Blame the Russians :)