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How the Giancarlo Stanton trade affects Yankees’ luxury tax quest

December 10, 2017 03:05PM
How the Giancarlo Stanton trade affects Yankees’ luxury tax quest
By Joel Sherman

December 9, 2017 | 3:48pm

Finances were a driving force in the trade agreement that will send Giancarlo Stanton from the Marlins to the Yankees.

Derek Jeter and Bruce Sherman inherited $400 million in debt when they bought the Marlins, and the only way to truly make a quick dent in that was to get rid of as much of the $295 million over 10 years that Stanton was owed.

The Yankees were willing to take on a sizeable portion of Stanton’s pact as long as a deal was structured in such a way to allow them to meet their vow to stay under the $197 million luxury-tax threshold.

The salaries used here will represent the average annual value of a contract because that is what is used for luxury-tax purposes. Stanton’s salary is $25 million, but with the Marlins agreeing to eat $30 million of what he is owed if Stanton does not opt out after the 2020 season, his luxury-tax hit for 2018 falls to $22 million. In addition, the Marlins would be acquiring Starlin Castro, who counts $8.6 million.


With Stanton, the Yankees would have seven signed players at $120.7 million. Add the $5.5 million they are charged for what they owe to complete the Brian McCann trade, the $28.4 million that MLB Trade Rumors guesstimates it will cost them for eight arbitration-eligible players such as Didi Gregorius and Sonny Gray, and the $14 million each team is charged for items such as pension and medical, and that is $168.6 million.

And remember the Yankees still have to complete the 25-man roster, and put aside money for both in-season call-ups and July trades. Even if that includes a lot of near-minimums salaries, notably at second base to replace Castro, it adds up to enough to leave perhaps $15 million-$18 million for the Yankees to spend on their main target: starting pitching.


That is probably not enough money to sign, say, both CC Sabathia and either Alex Cobb or Lance Lynn, who are both free agents. So they either have to shun Sabathia or perhaps do that deal in combination with a trade for a pitcher such as Pittsburgh’s Gerrit Cole, who is expected to make about $8 million in arbitration. This is why Shohei Ohtani was such was such a priority for the

Yankees because beyond his huge talent, he would have cost just the $545,000 minimum salary toward the payroll in 2018.

Still, the Yankees can create more payroll space by perhaps paying down enough of a contract to trade Jacoby Ellsbury — who becomes a fifth outfielder with Stanton present — or deal Chase Headley or Adam Warren or maybe even Dellin Betances.
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