Hal Steinbrenner wants to trim Yankees' payroll by 2014

Yankees' Alex Rodriguez pauses during practice at spring

Yankees' Alex Rodriguez pauses during practice at spring training. (Feb. 25, 2012) (Credit: Newsday/J. Conrad Williams, Jr.)

TAMPA, Fla. -- By 2014, the Yankees will have a payroll of $189 million.

The man signing the franchise checks says so.

"I consider it a requirement," managing general partner Hal Steinbrenner said late Thursday morning. "Is it a requirement with baseball that we be at 189? No, it's not a requirement. But that is going to be the luxury-tax threshold and that is where I want to be."



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Steinbrenner wants to be there in order to avoid a 50-percent luxury-tax hit if the payroll isn't at the threshold of $189 million, established in the new labor deal, after the 2013 season.

The Yankees currently pay at a 40-percent rate on the amount of their payroll over $178 million, a figure that includes the average annual values of contracts plus benefits. For purposes of the tax, the Yankees' final payroll in 2011 was $212.7 million.

Under the new labor agreement, the Yankees' rate would increase to 42.5 percent next year and 50 percent in 2013 if they continue to exceed the threshold.

"The new collective-bargaining agreement creates a compelling motivation for doing so [being under the luxury-tax threshold]," general manager Brian Cashman said Thursday afternoon. "You pick and choose on how you approach future opportunities."

This was the first time Steinbrenner, who rarely speaks with the media, publicly discussed the Yankees' philosophy on spending as it relates to the luxury tax.

"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 don't. You can field every bit as good a team with young talent."

The Yankees have paid the tax every year since it took effect in 2003, including $13.9 million in 2011 on their $212.7-million payroll. The Red Sox were the only other team to pay in 2011, hit with a $3.4-million bill.

"There's no doubt, luxury tax is an option, it's a personal option," Steinbrenner said. "We do it, we go into it knowing exactly what we're doing. But that's not something . . . 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."

Getting the payroll to $189 million by 2014 will be a challenge -- primarily Cashman's -- as the Yankees have big money tied up in long-term deals with Alex Rodriguez, Mark Teixeira, CC Sabathia and Derek Jeter. Additionally, potentially big deals loom for Robinson Cano, who has a club option for $15 million in 2013, and Curtis Granderson, who has a $13-million club option in 2013.

Might Steinbrenner consider shelving his policy of letting contracts expire to lock up Granderson and Cano?

"I'm not big on doing extensions, so we'll just have to see," he said. "Right now I just want to get through this season before we talk to anybody. I want to get through this season. I know the players want to focus on that and concentrate on that. At the end of the season, toward the end of the season, I'll consider anything."

Steinbrenner said some of the young -- and currently inexpensive -- arms in the system will be a part of the solution. Among those arms are those belonging to Ivan Nova (24), Michael Pineda (23) and Phil Hughes (25) -- a trio expected to be in this year's rotation -- and minor-league prospects Dellin Betances, Manny Banuelos, Adam Warren, David Phelps and D.J. Mitchell.

"We'll see how these young kids, Betances, Banuelos, those kids, we'll see how they perform toward the end of this year, this year and into next year," Steinbrenner said. "They're going to play a big part of that. The young kids are going to play a big part of being able to lower this payroll."

The Yankees won an American League-best 97 games last year but fell to the Tigers in five games in the ALDS. Steinbrenner said he likes what he has for 2012.

"I'm excited," he said. "I think we've got, on paper, definitely a better team than we did last year. I think our starting pitching's improved, and that was one of our goals in the offseason."

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