2017 Red Sox Payroll - 180 is enough?

[Buzzkill Pauley]

Since arbitration figures were mostly settled yesterday, we know what the Sox are committed to in 2017, aside from Pomeranz, Abad, Rutledge, and the "minimum" salary guys.

I place that in quotation marks, because last year Bogaerts was paid $650k -- well over the minimum for 2+ years MLB AST -- after his 2015 Silver-Slugger season. Additionally, Holt was paid $606k -- again well over the minimum prevailing rate -- after being selected as the All-Star representative for the 2015 Boston Bad News Bears. I suspect the Sox will likewise pay a solid premium to similarly reward Betts and Wright for their outstanding performances last season.

Estimates are in red.

$M AAV - Pos - Player
31.000 - LHP - Price
22.000 - DH - Ramirez
20.625 - RHP - Porcello
19.000 - 3B - Sandoval
13.750 - 2B - Pedroia
10.500 - RHP - Kimbrel
6.500 - OF - Young
6.500 - LHP - Sale
5.500 - 1B - Moreland
4.500 - SS - Bogaerts
4.450 - LHP - Pomeranz
3.600 - CF - Bradley
2.800 - RHP - Kelly
2.050 - RHP - Thornburg
2.000 - LHP - Abad
1.950 - UT - Holt
1.820 - LHP - Ross
1.300 - C - Leon
0.725 - IF - Rutledge
0.700 - RF - Betts
0.635 - RHP - Workman (DL)
0.620 - RHP - Wright
0.550 - RHP - Smith (DL)
0.545 - RHP - Barnes
0.545 - RHP - Hembree
0.545 - C - Vazquez
0.540 - LF - Benintendi
-------------------------------------
1.200 - milb players on 40-man roster
13.000 - benefits and pension
=====================
179.45 - estimated 2017 payroll

The 2017 LT Threshold is $195MM, so the Sox are sitting pretty at $15M under the cap.

That wiggle room allows for in-season trades and call-ups, of course, but it also allows the Sox to negotiate extensions with both Xander and Mookie during ST, with the understanding that such an extension could be signed before April, without perhaps the Sox risking the pending re-set of their tax penalty.

Or they could, perhaps, just be planning to entice someone out of his retirement. Oh my goodness gracious!

[edit 1/26: Pomeranz]
[Edit 2/1: Abad]

 

[Snodgrass'Muff]

Or they could, perhaps, just be planning to entice someone out of his retirement. Oh my goodness gracious!

Conspiracy theory time!

If Papi comes out of retirement, I assume they'd have to pay his whole salary from his option for 2017. So maybe they have a handshake deal with him to come back in late May so that he doesn't put them back over the LT threshold as his salary would be pro-rated and drop from $16M to whatever it would be at that point.



In all seriousness, this is a nice cushion to enter the season with. They get to start the year as one of the best teams in baseball and have room to either improve at the deadline or fix something that went wrong while still setting themselves up for the 2018-2019 winter. Pretty slick.

 

[PapaSox]

I don't believe Papi will come out of retirement. However, the world is becoming a far stranger place than I remember so I imagine anything is possible. I think Smod has it about right. A cushion to make needed adjustments and potential funds for the 2018 FA market.

 

[Cesar Crespo]

It's also enough to sign a Joey Bats in June if he's still around and offense is an actual need or to call up Castillo/Craig (not happening) if they are OPSing north of 1.000 in AAA or w/e.

This team has some question marks, so letting those question marks answer themselves and reevaluating in June/July seems the best course.

 

[Soxfan in Fla]

I don't believe Papi will come out of retirement. However, the world is becoming a far stranger place than I remember so I imagine anything is possible. I think Smod has it about right. A cushion to make needed adjustments and potential funds for the 2018 FA market.

He's too busy teaching tennis now. Lol.

 

[Mighty Joe Young]

It's also enough to sign a Joey Bats in June if he's still around and offense is an actual need or to call up Castillo/Craig (not happening) if they are OPSing north of 1.000 in AAA or w/e.

This team has some question marks, so letting those question marks answer themselves and reevaluating in June/July seems the best course.

If Bautista makes it to June unsigned the price is going to go way up and will require a two-three year offer one would think. That draft pick comp. is killing him right now. Without that it's pretty easy to see him getting offers in the 2/30 range.

 

[IpswichSox]

Even if he changed his mind, Ortiz can't play until at least June.

Because Ortiz filed his retirement paperwork last month [November 2016], Dombrowski noted that Major League Baseball rules stipulate he must remain on the "voluntary retired list" for the first 60 days of next season.

Link.

 

[Sampo Gida]

While not counting against the CBT you can bet the 22 million the Red Sox are paying Castillo and Craig count heavily in the budget in some fashion. Also, as mentioned I have to imagine if and when Castillo is needed and seems ready, they will want to have room for him w/o going over the threshold, and maybe as suggested above, even Ortiz. Also, lets not forget, Manny is getting his swing back in Japan (ok, just kidding)

 

[Buzzkill Pauley]

While not counting against the CBT you can bet the 22 million the Red Sox are paying Castillo and Craig count heavily in the budget in some fashion. Also, as mentioned I have to imagine if and when Castillo is needed and seems ready, they will want to have room for him w/o going over the threshold, and maybe as suggested above, even Ortiz. Also, lets not forget, Manny is getting his swing back in Japan (ok, just kidding)

On the contrary, I'm sure the Craig and Castillo contracts are complete non-factors when the Red Sox plot out their spending.

Neither is a major league hitter, and neither's salary counts against the LT threshold. I expect the Red Sox plan to keep it that way.

Those are called sunk costs. While the suckage reduces the annual profit-and-loss statements of John Henry and his partners until those contracts are off the books, they don't mean squat to what the Sox FO may be willing and able to spend to put the best team on the field, now that they don't impact the MLB salary structure.

Hopefully, the bloat leads to some damn nice steak dinners for the organizational guys who hit their ceiling in AAA, though.

 

[MikeM]

On the contrary, I'm sure the Craig and Castillo contracts are complete non-factors when the Red Sox plot out their spending.

Presenting the LT as some type of potential boogeyman factor in play, while simultaneously claiming the Sox could care less about the $22m in checks they have to write out there this season, doesn't really add up imo. That $22m payout is more then it costs for us to go $19m over the cap in 2 separate years and after already reaching the 3rd consecutive year penalty hit. So if the dead money not being an issue is indeed true then the same should essentially be said about LT threshold itself, while writing that expense off as "the cost of doing business". Especially for a team with a spending model that exhibits no real interest in ever blowing by the threshold to begin with.

As I've pointed out in the past, beyond the lip service paid to it on the surface there is pretty much zero evidence in a fairly large sample size that the LT threshold has even been a defining factor for this FO in any transition we otherwise could or would have made. If Castillo gives them a legit reason to believe he might be able to help the MLB club win more games in 2017, even on a temporary basis, I highly doubt it's going to start there.

On that note and in the interest of doing that exact math involved, I haven't been able to dig up any definite confirmation on what our tax rate would be for next year in the event we did go over. As in are we already classified as a repeat offender going in, or did the new labor deal wipe the current slate clean?

 

[trs]

Presenting the LT as some type of potential boogeyman factor in play, while simultaneously claiming the Sox could care less about the $22m in checks they have to write out there this season, doesn't really add up imo. That $22m payout is more then it costs for us to go $19m over the cap in 2 separate years and after already reaching the 3rd consecutive year penalty hit. So if the dead money not being an issue is indeed true then the same should essentially be said about LT threshold itself, while writing that expense off as "the cost of doing business". Especially for a team with a spending model that exhibits no real interest in ever blowing by the threshold to begin with.

It's an interesting question, I think. The whole movie ticket metaphor may apply a bit? The movie they paid for sucks and they know it 15 minutes into it. The question becomes not just do you get up and walk out, but do you get up and buy another ticket, seeing as your goal was to enjoy the afternoon at the movies and not just give $15 to someone.

I suppose this tired metaphor doesn't really account for luxury taxes. but it at least defends what you are all saying that reserving money under the threshold to "account" for the $22m outlay to Castillo and Craig doesn't seem to make much sense if the overall goal is a winning team and not meeting a fixed budget.

It does seem as though more thought is being put forward about long term dollar costs. It certainly doesn't make sense to go just over the threshold now if they do plan on doing it in 2 years. Those $5-10m they went over this year increases to the difference in tax they pay being a 2nd time offender, 3rd time, etc. Maybe the total dollar amount is still not Steinbrennian, but it does become an inefficient use of resources, perhaps a more important motivating factor?

 

[MikeM]

It does seem as though more thought is being put forward about long term dollar costs. It certainly doesn't make sense to go just over the threshold now if they do plan on doing it in 2 years. Those $5-10m they went over this year increases to the difference in tax they pay being a 2nd time offender, 3rd time, etc. Maybe the total dollar amount is still not Steinbrennian, but it does become an inefficient use of resources, perhaps a more important motivating factor?

Your speculation there is stopping short at a fairly critical part of the overall equation. Which is actually identifying those hypothetical money totals in question.

Is whether or not we are paying a 20%, 30%, or 50% tax rate on that $5-10m really an issue or concern for this FO there? Or more specifically, does that claimed priority to be "efficient" legitimately extend to a reality where our FO genuinely views paying $5m instead of $2m on a $10m surplus as being a potential deal breaker? I just don't see any real evidence supporting that to be true here. Everything on the decision making end is suggesting the opposite.

I agree that the primary thought is and should be put on the long term dollar costs. To me there is just a fairly big difference between the overall desire to a avoid a scenario where you are going into a future offseason already at cap while still needing to spend a lot of money, and sweating whether an extra 1 year contract is going to put you 5-10m over the cap for that particular season.

 

[trs]

Your speculation there is stopping short at a fairly critical part of the overall equation. Which is actually identifying those hypothetical money totals in question.

Is whether or not we are paying a 20%, 30%, or 50% tax rate on that $5-10m really an issue or concern for this FO there? Or more specifically, does that claimed priority to be "efficient" legitimately extend to a reality where our FO genuinely views paying $5m instead of $2m on a $10m surplus as being a potential deal breaker? I just don't see any real evidence supporting that to be true here. Everything on the decision making end is suggesting the opposite.

I agree that the primary thought is and should be put on the long term dollar costs. To me there is just a fairly big difference between the overall desire to a avoid a scenario where you are going into a future offseason already at cap while still needing to spend a lot of money, and sweating whether an extra 1 year contract is going to put you 5-10m over the cap for that particular season.

Totally agreed that an extra $2m in taxes turning a $10m contract into a $12m is hardly something to worry about. My only point was that going over the threshold by a few million for a middling asset might have a bit of a ripple effect on later contracts. The hypothetical I was thinking about was if the plan is to go over the threshold in 2018 and perhaps a bit beyond, you starting the luxury tax "clock" a year earlier. Sure the difference between 17.5% and 20% is hardly anything, but all of a sudden in year three that $15m/year contract for a DH is now taxed at 50% a year earlier than it needed to be. Given that's still not a huge money difference, but was it worth signing that player just puts you just over the threshold back in 2017?

Anyway, you're probably right that this is all academic. I suppose it's similar to the debate over starting arbitration clocks and counting days of service when deciding to bring someone up from AAA.