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Yankees, Red Sox, Angels to pay luxury tax

Posted: Tuesday, December 28, 2004

NEW YORK - The Boston Red Sox got an extra bill after winning the World Series.

Boston and Anaheim must pay baseball's luxury tax along with the New York Yankees, according to final figures compiled by the commissioner's office.

The Yankees are required to pay $25,026,352, according to a Dec. 21 memorandum that was sent to all major league teams. Boston owes $3,155,234 for exceeding the payroll threshold of $120.5 million and Anaheim got a bill for $927,059.

Checks for the competitive-balance tax, as it is formally known, are due at the commissioner's office by Jan. 31.

''The CBT is now an important part of baseball's economic landscape,'' Red Sox owner John Henry said in an e-mail Monday. ''From my perspective, even though it costs us, the stronger the CBT is in the future, the stronger the sport is going to be. It is a much more productive form of taxation than that of strictly revenue taxation because the economic incentives for teams are not damaged.''

In 2003, the first year of the new luxury tax, the Yankees were the only team to pay, owing $11,798,357, according to the team's latest revised bill. Because they exceeded the threshold a second time, the Yankees were taxed at a rate of 30 percent for the amount they were over. Boston and Anaheim were taxed at a 22.5 percent rate.

If the Yankees go over the 2005 threshold of $128 million, which appears certain, they would be taxed at a 40 percent rate.

New York also estimates it will give up about $60 million as part of baseball's revenue-sharing plan this season, meaning the Yankees will send the commissioner's office about $85 million of their estimated $315 million revenue in 2004. Boston's revenue-sharing payment is estimated at approximately $42 million on revenue of at least $220 million.

The Yankees easily finished ahead of other teams in the regular payrolls figures for the sixth straight season, winding up at a record $187.9 million, $18 million above the previous mark they set in 2003.

Boston, which overcame a 3-0 deficit against the Yankees in the AL championship series and won the World Series for the first time since 1918, was second at $130.4 million.

Anaheim, defeated by the Red Sox in the first round of the playoffs, was third at $115.6 million, followed by the New York Mets ($103.2 million), Los Angeles ($101.7 million), the Chicago Cubs ($100.7 million) and Philadelphia ($97.4 million).

St. Louis, swept by Boston in the World Series, was eighth at $92.8 million.

At the other end, Tampa Bay finished with the lowest payroll for the third straight season. At $24.4 million, the Devil Rays had the lowest figure for any team since 2000.



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