Hal Steinbrenner plans to lower payroll

Updated: March 2, 2012, 2:59 PM ET
By Wallace Matthews | ESPNNewYork.com

TAMPA, Fla. -- The days of the bloated New York Yankees payrolls are numbered.

So said Hal Steinbrenner, the team's managing general partner and the younger son of the late George M. Steinbrenner III, who on Thursday confirmed what his general manager, Brian Cashman, has been saying all winter: that over the next two seasons, the Yankees' payroll would be drastically trimmed, all the way down to $189 million by the start of the 2014 season.

"I'm looking at it as a goal, but my goals are normally considered a requirement," Steinbrenner said. "Plenty of teams win without the kind of payrolls we have."

The reason, of course, is the luxury tax, into which the Yankees have paid more than 90 percent of the total collected by Major League Baseball since it was instituted in 2003 -- $206 million of the $227 million assessed to just four teams: the Yankees, Boston Red Sox, Detroit Tigers and Los Angeles Angels.

The Yankees paid $13.9 million in luxury tax on their 2011 payroll, the lowest they had paid since 2003, but Steinbrenner's goal is to eliminate paying it at all.

"[Paying] the luxury tax is an option," he said. "We go into it knowing exactly what we're doing. [And] being the only team that does it, I'm just not convinced we need to be as high as we've been in the past to field a championship-caliber team."

Currently, teams are assessed a 40 percent luxury tax on every dollar they spend over $178 million, the current threshold. Under the newly ratified CBA, the threshold rises to $189 million and the tax rate rises to 50 percent.

The Yankees' 2012 payroll was pushed to approximately $210 million with the signing of Hiroki Kuroda to a one-year, $10 million contract in January, and the additions of Raul Ibanez ($1.1 million) and Eric Chavez ($900,000), both of whom have performance-based incentive clauses that could add several million more.

And they already are committed to $118 million for 2013 and $75 million for 2014, all of it going to four players: Alex Rodriguez, CC Sabathia, Mark Teixeira and Derek Jeter.

Still, Steinbrenner said the $189 million figure is well within reach if the Yankees shift their focus to developing and promoting their young talent to the majors. If it is not exactly a rebuilding program, it is as close as the Yankees will ever come to one.

"I'm a finance geek. I guess I always have been," Steinbrenner said. "That's my background; budgets matter and balance sheets matter. I just feel that if you do well on the player development side and you have a good farm system, you don't need a $220 million payroll. You can field every bit as good a team with young talent."

Steinbrenner cited pitching prospects Manny Banuelos and Dellin Betances as keys to the future, lower-cost Yankees team he hopes to field. In addition, the Yankees will also need to re-sign Robinson Cano and Curtis Granderson, who figure to be big-ticket free agents. Steinbrenner reasserted the club's traditional reluctance to extend contracts before they expire, but he did not rule out making an exception in either case.

"We've got some room to do things," he said. "But I am going to need some of these young pitchers to step up. They're going to play a big part of being able to lower this payroll."

Steinbrenner refused to concede that a payroll reduction would mean a diminished product on the field. "All of us want to field the best team we can field, and we're in a tough division," he said. "We made the decisions we had to make, but we always will field a championship-caliber team. I've said that a thousand times."

To that end, Steinbrenner said he was "excited" about the current roster and the team's prospects for success this season.

"I think the guys last year did great, but I think we were fortunate in an area or two," he said. "I think we've got, on paper, definitely a better team than we did last year. I think our starting pitching is improved, and that was one of our goals in the offseason. Absolutely, I'm excited."

Wallace Matthews covers the Yankees for ESPNNewYork.com.

Wallace Matthews has covered New York sports since 1983 as a reporter, columnist, radio host and TV commentator. He covers the Yankees for ESPNNewYork.com after working for Newsday, the New York Post, the New York Sun and ESPN New York 98.7 FM.
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