Yankees, Orioles Still Pay Most, but It’s Less

The New York Yankees will have baseball’s highest payroll again in 1997, and eight to 10 clubs may surpass $50 million in salaries, but early projections suggest that baseball’s new economic system may be working, according to a management source.

That system, as encompassed in the new labor agreement, is based on the combination of a luxury tax aimed at restricting spending by the big-revenue clubs and an increased revenue-sharing package aimed at decreasing the payroll and competitive disparity between big- and small-revenue clubs.

According to the source, the Yankees had a $67-million player payroll last year--including $5 million in benefit payments--followed by the Baltimore Orioles at $62 million.

The Yankees and Orioles are again 1-2, but have come down to $61 million and $58 million, respectively.

Final luxury tax compilations won’t be made until Dec. 20. Besides the Yankees and Orioles, the Cleveland Indians, Atlanta Braves, Chicago White Sox, Texas Rangers, Toronto Blue Jays and Florida Marlins have surpassed the 1997 tax threshold of $51 million.

The top five will have to pay a 35% tax on payroll money above $51 million, but any club within $500,000 of the threshold will also have to pay.

Besides the lower payrolls at the top of the ladder, there has been a compression throughout, the source said.

Last year, there were 14 clubs with payrolls of $40 million-$60 million. This year, there are 18.

Last year, there were 20 clubs with payrolls of $30 million-$60 million. This year, there are 24.

The revenue-sharing system will not be fully implemented until 1999. It is phased in at 60% this year and 80% in 1998. The first checks, underwritten by the top 12 or 13 revenue clubs, were mailed to 13 low-revenue clubs last week and will continue to be mailed monthly.

The Montreal Expos and Pittsburgh Pirates, among the lowest of the low-revenue clubs, could receive $12 million this year and $20 million when the plan is fully implemented.

The Angels, based on revenue, will receive about $6 million this year, an incongruity given their market potential.

In addition to the overall compression and the lower lid at the top, the industry is looking at other positive figures, the source said. Last year’s payrolls totaled $1.120 billion and comprised 63% of the industry’s $1.8-billion revenue.

This year’s payrolls total $1.2 billion, which would be 59% of anticipated revenue of $2.1 billion. The 59% salary and benefits package would be the lowest since 1993’s 57%, the last year before the strike, and the jump to $2.1 billion revenue would reflect a resurgence in attendance and licensing income.

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It wasn’t the last time Jim Abbott was effective, but it was the last time he was consistent at it, going 6-4 with a 3.36 earned-run average in 17 games with the Chicago White Sox in 1995, before he was traded back to the Angels.

Now the White Sox are interested in having Abbott back, General Manager Ron Schueler said, providing he would go to the minors first.

“We’ve let [agent Scott] Boras know we’d be interested if Jim wants to keep pitching, but I think Jim wants to take time to decide what to do with his life,” Schueler said. “There’s no hurry.”