Yankees receive $11.8 million luxury tax bill

The tax man has delivered a costly holiday gift to George Steinbrenner and the New York Yankees. AP

NEW YORK (AP) -- Happy Holidays, George Steinbrenner! Your New York Yankees are the only baseball team to be slapped with a luxury tax bill.

The Yankees were told by the baseball commissioner's office that they owe $11.82 million, a baseball official told The Associated Press on Wednesday under the condition of anonymity.

New York's payment is due by Jan. 31.

A tax rate of 17.5 percent this year means the Yankees' final payroll, for tax purposes, was $184.5 million. The other 29 teams all stayed under the tax threshold of $117 million established by baseball's new collective bargaining agreement.

Commissioner Bud Selig pushed for the tax to discourage high-revenue teams from far outspending their rivals. The Yankees were told of the amount late Tuesday.

"One year's experience is not sufficient to make a judgment, but we are pleased with the increase in competitive balance on the field," said Bob DuPuy, baseball's chief operating officer.

Yankees president Randy Levine declined comment.

New York, which won the AL pennant but lost to Florida in the World Series, had estimated its tax would be between $11 million and $12 million.

Unlike regular payroll figures, the luxury tax is based on payrolls for 40-man rosters and includes about $8 million per team for benefits.

In 2004, the threshold increases to $120.5 million and the tax rate goes up to 22.5 percent. New York's projected luxury tax payroll for next season is between $175 million and $180 million.

The luxury tax in the new agreement, which runs through 2006, is much steeper than the one baseball had from 1997 to 1999.

A total of eight teams paid tax in those three years, topped by Baltimore, which had a 1997-99 total tax of $10.6 million. The Yankees paid $9.9 million in that period and no other team paid more than $2.8 million.

In addition to the tax, the Yankees project they will pay $50 million for 2003 toward baseball's revenue-sharing plan, up from $32 million the previous year.

Steinbrenner facing subpoena in lobbying probe

ALBANY, N.Y. (AP) -- George Steinbrenner and other top Yankees' executives were subpoenaed by a New York state commission investigating the team's distribution of free tickets to public officials.

Subpoenas were issued Tuesday to the Yankees president Randy Levine and chief operating officer Lonn Trost, according to documents reviewed Wednesday by The Associated Press under a Freedom of Information Act request.

The subpoenas direct the three Yankees executives to turn over records on complimentary tickets for the 2002 and 2003 regular season and playoffs by Jan. 14. The three executives were also ordered to appear at the commission's Albany offices on Jan. 21 to give closed-door depositions about the free tickets.

The team's Albany lawyer, Clemente Parente, has filed free ticket information with the commission for 2002 and for the VIPs who got complimentary tickets for last year's home opener.

According to Lobbying Commission records in the case, Parente promised in an Oct. 23 letter that free ticket information for the three postseason series the Yankees played in 2003 would be produced within two weeks. But no more details have since been provided by the team, commission officials said, prompting the subpoenas.

The subpoenas were first reported Wednesday by the New York Daily News.

"The Yankees have not engaged in any lobbying," Yankees spokesman Howard Rubenstein said.

None of the Yankees officials have been served with the subpoenas, Levine said.

Under state laws, companies and individuals have to report all gifts to public officials worth $75 or more. The commission can levy fines of up to $100,000 for the filing of incomplete or inaccurate information on lobbying expenses.

New York City Mayor Michael Bloomberg, Police Commissioner Raymond Kelly and City Council Speaker Gifford Miller were among the public officials who accepted free tickets to 2002 Yankee playoff games. Bloomberg told all city officials this fall not to accept free tickets to Yankees and Mets games except for Opening Day.

Opening Day has traditionally been considered a ceremonial affair, when teams issue complimentary tickets to many public officials.

Commission officials declined comment on the investigation.