According to the Associated Press, the Red Sox were hit with a $3.4 million luxury tax bill by Major League Baseball. That fee was assessed based on the team's 2011 major league payroll as calculated for competitive balance tax purposes (a formula that reflects the average annual salaries paid to all players who spent time on the 40-man roster, along with medical benefits).
This year, the luxury tax threshold was set at $178 million. Because the Sox surpassed the luxury tax threshold for the second straight year, they were penalized at the rate of 30 percent. The $3.4 million bill, in turn, means that the team's payroll (as calculated for CBT purposes) was approximately $189 million, the largest ever by a non-Yankees team.
The Sox and Yankees were the only two teams in the majors that exceeded the luxury tax payroll threshold this year. It is the sixth time in eight seasons that the Sox have surpassed the threshold. It is the second-largest luxury tax bill that the Red Sox have ever been assessed, behind only the $6.06 million the team paid following the 2007 season.
The fact that the team's payroll was roughly $189 million is particularly intriguing in light of the new Collective Bargaining Agreement, which takes effect in 2012. The threshold will remain at $178 million in both 2012 and 2013 (the Sox have already resigned themselves to exceeding the threshold in 2012, a season in which they will be penalized 40 percent on each dollar spent beyond $178 million) before moving up to $189 million in 2014, 2015 and 2016.
The Yankees, meanwhile, were hit with a $13.9 million luxury tax bill, their lowest from MLB since 2003. The Yankees have now been hit with more than $215 million in luxury tax fines since 1997. The Red Sox rank second in such penalties at approximately $21 million. The Orioles rank third at approximately $11 million.
For complete Red Sox coverage, visit weei.com/redsox.
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All the latest stories brought to you by Kirk Minihane.
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Bill Belichick said exactly what you think he'd say about deflategate and the penalties levied on the Patriots: nothing. Michael Holley, Steve Buckley and Greg Dickerson discuss it.
Michael and crew discuss the latest revelations about public funding in the bid for Boston to get the 2024 Olympics.
Michael Holley, Steve Buckley and Greg Dickerson discuss the Red Sox including the benching of David Ortiz, and the debut of rookie pitcher Eduardo Rodriguez.
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"Jerry is joined by his friend comedian Nick "Fitzy" Stevens to talk about awesomely cheesy 80s movies, the "Point Break" reboot, why in a world of limitless raunch everyone is so uptight, and a million other topics before they finally get to why everyone hates the Patriots and their fans."
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