How the Yankees set nearly $100 million on fire with injured players and the luxury tax

Mike Oz
September 11, 2013

If you drive a Ferrari, then spending $75 when you fill up at the gas station isn't as eye-popping as it to a regular person. It's part of the show. And when you're the New York Yankees, the most valuable sports franchise in America, having a season when you're charged a $29 million luxury tax comes with the very, very high-priced turf.

The $29 million figure, more than the Houston Astros' entire payroll, is being reported by Bob Nightengale of USA Today and it represents a 50 percent tax for the Yanks being over the $178 million payroll threshold. The Yankees payroll this season is $236.2 million, so they're paying 50 percent of the difference. Wow. Even if you're a Ferrari owner, that's a lot of money.

But for these 2013 Yankees, with their aging stars and multiple disabled-list trips, that's just the beginning of the money that's being wasted. Consider that they're paying Alex Rodriguez $28 million and he's played in 31 games (and counting). Mark Teixeira, with his $22.5 million contract, played in 15 games before his season ended with injury.

The Yankees got 28 games out of Kevin Youkilis, who signed a $13 million contract in the offseason. Outfielder Curtis Granderson has played in 44 games of a season in which he's getting paid $15 million. Then there's The Captain, Derek Jeter. He's played in 17 games. His salary is $13 million. And as of Wednesday, he's done for the season.

So how much money have the Yankees lost to injury this season? Right now, that figure is at $75.4 million. Add the luxury tax bill and it totals $104.5 million.

There's another $4.5 million still on the table with 17 games left for A-Rod and Granderson. Will both of them play every game? With A-Rod a little beat up lately, the Yankees will, probably, eat a little bit more cash.

But before anybody tsk-tsk's the Yankees too much, we have to note some of this will be coming back to them via insurance policies. It's been reported that insurance will cover nearly $19 million of Teixeira's salary. His case is a little different because he was injured in preparation of the World Baseball Classic, and a special MLB insurance policy will cover $7 million.

We know the Yankees have insurance policies on A-Rod, though since he made it back from injury this year, we don't what's covered exactly. And if the Yankees took out policies out for A-Rod and Teixeira, it's a pretty good bet that they insured the rest of their big contracts, Jeter and Youkilis especially.

So we can't say exactly how much money the Yankees are just throwing into a bonfire this season, but two things we know for sure: It's a whole heck of a lot more than you and I have in the bank. And it can buy Ferraris for your entire family.

Baseball season's in full swing. Don't miss a thing.
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