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  1. #51
    Bazinga Hitman23's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by JL25and3 View Post
    Luxury tax is not revenue sharing.
    Luxury tax is not revenue sharing.
    Luxury tax is not revenue sharing.
    Luxury tax is not revenue sharing.
    Luxury tax is not revenue sharing.
    I think you're broken.
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  2. #52
    Please, call me YFiB Yankee Fan in Boston's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by Charlie Hustle View Post
    I'm sure you get my point. The Yankees are penalized when they spend over a certain limit by being fined. The money then goes to other mlb owners who pocket the money. MlB once had to warn the Marlins to spend money on players instead of pocketing it and soley relying on their farm system.
    No, it doesn't. That's why he wrote the same thing 5 times.

    From wikipedia:

    The luxury tax is separate from revenue sharing, which is a system to balance out the income distribution between large and small market teams by dividing money from merchandise sales and media contracts. The money generated from the luxury tax is not distributed to the rest of the league, as is the case with the NBA, but rather is used for other purposes. The first $5 million is withheld to cover potential refunds, and is contributed to the Industry Growth Fund (IGF) if no refunds are forthcoming. The remaining money is divided as follows: 50% funds player benefits, 25% funds developing baseball in countries without high school baseball, and 25% goes to the IGF
    http://en.wikipedia.org/wiki/Luxury_tax_(sports)
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  3. #53
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    Re: What is the exact benefit of getting under $189 mil?

    I remember reading something a few years ago regarding the Yankees spending a lot of their own money on funding the building of the new stadium, and that one of the benefits was it would keep their money out of the hands of the other owners.

    Can anyone confirm this and explain it any further? Doesn't it have something to do with the luxury tax and/or revenue sharing?
    "Somebody once asked me if I ever went up to the plate trying to hit a home run. I said, 'Sure, every time.'" -- Mickey Mantle

  4. #54
    NYYF Cy Young

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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by sjb23 View Post
    I remember reading something a few years ago regarding the Yankees spending a lot of their own money on funding the building of the new stadium, and that one of the benefits was it would keep their money out of the hands of the other owners.

    Can anyone confirm this and explain it any further? Doesn't it have something to do with the luxury tax and/or revenue sharing?
    This is a long and detailed article from around the time of the ground breaking of NYS, but might explain some of what you're asking:
    Consider the first deduction. Under MLB's revenue sharing system, the contribution made by each team is based upon its net local revenues. To arrive at net local revenues a team is allowed to subtract stadium expenses. If the team owns the stadium, it is permitted to amortize its investment in the stadium over ten years. If it does not own the stadium, there is some dispute whether the investment should be amortized over ten years or over the period of the lease (40 years), where the investment is treated as a form of prepaid rent. In all likelihood, the Yankees lease will be considered an operating, not a capital, lease, and the team will amortize its investment over 40 years. DeMause's estimate assumes the Yankees will use a 10-year amortization period.
    DeMause then takes my estimate from May the Best Team Win of the marginal tax rate faced by the Yankees under MLB's revenue sharing system, approximately 39 percent. That is, for every extra dollar of local revenue earned by the team, it gives up approximately 39 cents to the central fund. Hence, if the Yanks amortize an $800 million investment over 10 years, then each year for 10 years the team will be able to deduct $80 million from its local revenue. This $80 million annual deduction will then save the team ($80 million) X (.39) = $31.2 million a year in revenue sharing contributions.
    DeMause then takes this $31.2 million per year and multiplies it by 10, to arrive at the $312 million savings for the team. What's wrong here? First, MLB might require the Yankees to base their deduction on the post-tax-break $756 million, not the $800 million. Second, the Yankees will probably amortize their investment over 40 years, lowering the annual deduction from $80 million to $20 million. Third, while the new stadium will allow the Yankees a revenue sharing deduction, it will also engender a substantial increase in earned revenues so that, at the end of the day, the Yanks' revenue sharing contributions will actually increase as a result of the new stadium.
    Entire article here:
    http://www.baseballprospectus.com/ar...articleid=4732
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  5. #55
    Tends to be difficult JL25and3's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by Hitman23 View Post
    I think you're broken.
    I had a copy of Revolver that went, "She said, 'You don't understand what I said,' I said, 'No no no you're wrong, no no no you're wrong, no no no you're wrong, no no no you're TCHKK was a boy..."

    Or my roommate's copy of American Pie, which went, "And we sang dirges in the dark, -jz in the dark, -jz in the dark, -jz in the dark..."
    A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.
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  6. #56

    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by Yankee Fan in Boston View Post
    No, it doesn't. That's why he wrote the same thing 5 times.

    From wikipedia:



    http://en.wikipedia.org/wiki/Luxury_tax_(sports)
    gotcha. There's too much to study here. Then I was making my point to something irrelevant to here.

  7. #57
    NYYF Cy Young

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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by JL25and3 View Post
    I had a copy of Revolver that went, "She said, 'You don't understand what I said,' I said, 'No no no you're wrong, no no no you're wrong, no no no you're wrong, no no no you're TCHKK was a boy..."

    Or my roommate's copy of American Pie, which went, "And we sang dirges in the dark, -jz in the dark, -jz in the dark, -jz in the dark..."
    Weird - my American Pie single skips at that exact same version. Maybe a defect in the master?

  8. #58
    NYYF Legend

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    Re: What is the exact benefit of getting under $189 mil?

    So raising Jeter's salary from $9.5M to $12M lowers their lux tax figure on him from ~$14.5 to $12M.
    Baseball is life;
    the rest is just details.

  9. #59
    Sunny days ahead YankeePride1967's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by Yankee Tripper View Post
    So raising Jeter's salary from $9.5M to $12M lowers their lux tax figure on him from ~$14.5 to $12M.
    Correct, as if they had just let him pick up the player option, the salary cap figure would have been based on the AAV of the last contract which was 4 years and was higher than this one year contract.

  10. #60
    The gerbil lives Zimmers' Helmet's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by YankeePride1967 View Post
    Correct, as if they had just let him pick up the player option, the salary cap figure would have been based on the AAV of the last contract which was 4 years and was higher than this one year contract.
    That's a popular misconception. Unfortunately, that would require innovative thinking, which Cashman and co. do not possess. As per Joel Sherman:

    http://www.mlbtraderumors.com/2013/1...12mm-deal.html

    Joel Sherman of the New York Post reports that the common belief that this deal saves the Yankees from the luxury tax threshold is a misconception. According to Sherman, given the way that the luxury tax is computed, this deal will count more significantly against the luxury tax than Jeter's player option would have. Had Jeter exercised that option, $10.75MM would have gone against the luxury tax in 2014, says Sherman, but this new deal will count $12.8MM toward the luxury tax
    "Glory is fleeting, but obscurity is forever." - Napoleon Bonaparte (1769-1821)

  11. #61
    Sunny days ahead YankeePride1967's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by Zimmers' Helmet View Post
    That's a popular misconception. Unfortunately, that would require innovative thinking, which Cashman and co. do not possess. As per Joel Sherman:

    http://www.mlbtraderumors.com/2013/1...12mm-deal.html
    I will wait to hear from more reliable sources before I believe this.

  12. #62
    Hello dum-dum... effdamets's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by YankeePride1967 View Post
    I will wait to hear from more reliable sources before I believe this.
    Ditto.
    Joel Sherman is bad at math
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  13. #63
    NYYF Legend

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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by Zimmers' Helmet View Post
    That's a popular misconception. Unfortunately, that would require innovative thinking, which Cashman and co. do not possess. As per Joel Sherman:

    http://www.mlbtraderumors.com/2013/1...12mm-deal.html
    How does Sherman come up with the $10.75M?

    $10.75M AAV x 4 years = $43M. Since Jeter's contract was for $48M plus a player option for $8M, it was $56M over four years, not the $43M that Sherman seems to assume.
    Forgive me for taking the Contrarian view

  14. #64
    NYYF Legend

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    Re: What is the exact benefit of getting under $189 mil?

    189 mil should win you something...........

    "Happy Wife.........Happy Life" - unknown

  15. #65

    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by StingrayJG View Post
    This is a long and detailed article from around the time of the ground breaking of NYS, but might explain some of what you're asking:
    Entire article here:
    http://www.baseballprospectus.com/ar...articleid=4732
    Why would they amortize over 40 years? Simple time value of money principle dictates that u would amortize over 10. Yankees rev sharing far exceeds 32MM a year, so why NOT amortize over 10?

    Makes no sense sometimes

  16. #66
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by montrealer View Post
    189 mil should win you something...........
    So should the $220M they spent this year which didn't even get them to the playoffs.
    Yankee fan living in Maine.

  17. #67
    Sunny days ahead YankeePride1967's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by apalradio View Post
    So should the $220M they spent this year which didn't even get them to the playoffs.
    Injuries and also bad decisions. Payroll even 2/3 what it is now should be more than enough if we had an organization that made good choices.
    Life is good!

  18. #68
    NYYF Cy Young

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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by yankeepride1967 View Post
    injuries and also bad decisions. Payroll even 2/3 what it is now should be more than enough if we had an organization that made good choices.
    bingo!!
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  19. #69
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by YankeePride1967 View Post
    Injuries and also bad decisions. Payroll even 2/3 what it is now should be more than enough if we had an organization that made good choices.
    Good choices? What are those?

  20. #70
    Sunny days ahead YankeePride1967's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by cpc98 View Post
    Good choices? What are those?
    Not bidding against yourselves for a 40 year old that is likely not going to play a full season at SS at a higher AAV? Oops too late!
    Life is good!

  21. #71

    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by YankeePride1967 View Post
    Injuries and also bad decisions. Payroll even 2/3 what it is now should be more than enough if we had an organization that made good choices.

    10000% correct.

    Overhaul the org. Bring in a gm that refuses to overpay and some developmental gurus. Have development come from top to bottom.

  22. #72
    Senior Member
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by YankeePride1967 View Post
    Not bidding against yourselves for a 40 year old that is likely not going to play a full season at SS at a higher AAV? Oops too late!
    I was joking... I agree with what you've said.

  23. #73
    Sunny days ahead YankeePride1967's Avatar
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by cpc98 View Post
    I was joking... I agree with what you've said.
    I know I was just answering your point with a sarcastic question. Not targeted at you though.
    Life is good!

  24. #74
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    Re: What is the exact benefit of getting under $189 mil?

    Quote Originally Posted by flymick24 View Post
    hal, randy, and lonn get to wipe their asses with 100 dollar bills
    but now they want to use both sides............

    "Happy Wife.........Happy Life" - unknown

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