Baseball salary average up 9 percent to nearly $2.7 million

The inflation of baseball salaries is mind puzzling to me, but this years off season has shown us that salaries will only continue to increase.

By RONALD BLUM, AP Baseball Writer
December 20, 2006

NEW YORK (AP) -- Baseball salaries were booming even before the free-agent escalation that began more than a month ago.

The average salary shot up 9 percent this year to $2,699,292, according to final figures released Wednesday by the Major League Baseball Players Association. The increase was the highest since a 12.8 percent rise in 2001 and makes it likely the $3 million mark will be broken next year or in 2008.

"The increase in the average salary is a reflection of the growth in overall industry revenues, and that while the sport still has significant economic challenges, the increased average is a reflection of the level of the talent on the field," said Bob DuPuy, baseball's chief operating officer.

Baseball salaries are soaring, with Alfonso Soriano ($136 million), Vernon Wells ($126 million) and Carlos Lee ($100 million) agreeing to nine-figure deals since the end of the season, boosting baseball's total of $100 million contracts to 11.

Still, no one has approached Alex Rodriguez's record $252 million, 10-year contract, agreed to after the 2000 season.

The New York Yankees had the highest average salary for the eighth consecutive season, but their average dropped to $6.95 million from a record $7.39 million the previous year.

Houston was second at $4.28 million, up from ninth place in 2005. Boston was third at $3.99 million, down from $4.17 million the previous season, followed by the New York Mets ($3.86 million), the Chicago White Sox ($3.81 million) and the World Series champion St. Louis Cardinals ($3.78 million).

The AL champion Detroit Tigers were ninth at $3.06 million, up from 15th.

Florida's average of $594,722 was the lowest in the major leagues since 1999, when Kansas City was at $534,460, the Marlins at $561,111 and Montreal at $572,290.

Among the teams with the 10 highest averages, only San Francisco ($3.8 million) had a losing record (76-85). Among clubs with the 12 lowest averages, the only one with a winning record was Toronto (87-75).

Third basemen had the highest average among positions ($5.87 million), followed by first basemen ($5.78 million), designated hitters ($5.59 million), outfielders ($4.88 million), starting pitchers ($4.87 million), shortstops ($4.06 million), second basemen ($2.79 million) and relievers ($1.43 million).

Figures were based on Aug. 31 rosters and disabled lists and do not account for money owed to released players or payments teams make or receive to cover parts of salaries of players who have been traded.

The commissioner's office has not computed its final figure, which usually differs from that of the union because of calculation methods.

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

Unfortunately, money does not buy World Championships and the Yankees have learnt that the hard way over the past six seasons.

By RONALD BLUM, AP Baseball Writer
December 23, 2006

NEW YORK (AP) -- World Series titles don't come to Yankee Stadium these days, just tax bills.

The Yankees were slapped with a $26 million luxury tax by the commissioner's office Friday, raising New York's total to $97.75 million over the last four years.

Boston, which missed the playoffs, was the only other team over the tax threshold and will pay $497,549.

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 in 2003, $26 million in 2004 and $34 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 and the Anaheim/Los Angeles Angels $927,057.

Payments are due at the commissioner's office by Jan. 31. Commissioner Bud Selig concluded the tax achieved the result management wanted.

"I think it did. I really think, frankly, everything that we did pretty well came out to its projection," he said.

New York's bill decreased this year because its payroll, as calculated for the tax, declined from $212.9 million to $201.5 million and the threshold for where the tax began increased from $128 million to $136.5 million. Under the new labor contract, the threshold for the tax rises to $148 million next year.

For luxury tax purposes, the average annual values of contracts are used and benefits are included.

"The luxury tax is not the 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 payroll for their 40-man roster, according to final figures released Friday by the commissioner's office, up from $206.6 million in 2005.

Boston was a distant second this year at $137.5 million, followed by the New York Mets ($116.6 million), Houston ($107.7 million), the Los Angeles Dodgers ($107.2 million) and the Los Angeles Angels ($104 million).
The World Series champion St. Louis Cardinals were 10th at $96.1 million, and the AL champion Detroit Tigers were 14th at $89.8 million.

Florida, last at $21.1 million, had less than half the payroll of Pittsburgh, 28th at $43.4 million. Tampa Bay was in between them at $36.4 million.

Management calculated the average salary at $2,642,915. The players' association, whose calculation method differs slightly, had the average at $2,699,292 in its annual report this week.