Thursday, January 23, 2014

Why Tanaka Really Cost NYY A Quarter-Billion

As pointed out by the brilliant Tom Verducci of, the real acquisition price of Masahiro Tanaka is not $175 million ($155M + $20M posting fee), but rather $252.5 million. Why? Because the signing pushed The Evil Ones over the $189 million luxury tax threshold—the budgetary discipline they adhered to last year that saw them miss the playoffs. Verducci calculates that (since passing the threshold triggers taxing any excess at 50%) Tanaka's salary gets taxed to the tune of $77.5 million. Add that to the $175M and—voilà—you get to that quarter-billion dollar mark. So, for an unproven, 25-year old pitcher with lots of mileage on his arm, The Bronx Embalmers paid out a king's ransom—returning to fiscal insanity.