Rusney Castillo Conundrum

[glennhoffmania]

Can't blame Farrell for Castillo's lack of PT.  Farrell is battling for his job and the season is on the brink.  The Sox need to win...right now.

 
Wait, what?  The team sucks, isn't going anywhere this year, but the manager's main priority is to protect his job instead of doing what's best for the team and we can't blame him for this?  They don't need to win right now.  They need to figure out what they're doing starting in 2016, with or without Farrell.  Playing De Aza over Castillo to try to save his job is fucking awful, if that's in fact what he's doing.

 

[rembrat]

Wait, what?  The team sucks, isn't going anywhere this year, but the manager's main priority is to protect his job instead of doing what's best for the team and we can't blame him for this?  They don't need to win right now.  They need to figure out what they're doing starting in 2016, with or without Farrell.  Playing De Aza over Castillo to try to save his job is fucking awful, if that's in fact what he's doing.

 
I totally hear you but IMO it's still too early to publicly throw in the towel. That kind of admission would put the vets off and the dynamic of the clubhouse, a mix of young and older players, is probably a lot more fragile than we think it is. I mean we're only a week removed from our fiery gnome sized 2Bman going on tirade about the media and how the season isn't lost so you have to believe he isn't alone. Farrell isn't going to abandon his players. 
 
Now, if they're still down 10 games post ASB and suffer some kind of big injury, it's a lot easier to wave the white flag. 

 

[The X Man Cometh]

 
I totally hear you but IMO it's still too early to publicly throw in the towel. That kind of admission would put the vets off and the dynamic of the clubhouse, a mix of young and older players, is probably a lot more fragile than we think it is. I mean we're only a week removed from our fiery gnome sized 2Bman going on tirade about the media and how the season isn't lost so you have to believe he isn't alone. Farrell isn't going to abandon his players. 
 
Now, if they're still down 10 games post ASB and suffer some kind of big injury, it's a lot easier to wave the white flag. 

 
Exactly. The players aren't robots. They want to win baseball games. How do you think they'd respond to the manager sabotaging their efforts? I get that the team probably isn't "going anywhere" in 2015 but that doesn't mean you stop trying. Its bad for business, its bad for the fans who pay to watch the games, and its probably bad for morale and focus internally.
 
Rusney has made a lot of mental and unforced errors in a short span. I just don't think that's the kind of thing good teams tolerate. He's a big boy, and he'll g et called up if he's raking against IL competition and showing he can have his head in the game.
 
My problem with alarmism about this move is twofold: 1) There's more at stake than just Rusney's individual development here, and 2) the demotion to AAA isn't as bad for his individual development as people are making it out to be either. Actual games are a minority of the work these guys do. Maybe its the other 4-5 hours a day that are more important for Rusney? Its unfair to demonize Farrell when he might well not have a choice.

 

[glennhoffmania]

 
I totally hear you but IMO it's still too early to publicly throw in the towel. That kind of admission would put the vets off and the dynamic of the clubhouse, a mix of young and older players, is probably a lot more fragile than we think it is. I mean we're only a week removed from our fiery gnome sized 2Bman going on tirade about the media and how the season isn't lost so you have to believe he isn't alone. Farrell isn't going to abandon his players. 
 
Now, if they're still down 10 games post ASB and suffer some kind of big injury, it's a lot easier to wave the white flag. 

 
That's totally reasonable.  I was only really taking issue with the idea that Farrell's main priority is to secure his job.  I understand that instinct but there are bigger issues involved here obviously.  If they really think they still have a shot this year and Castillo can't help them they should've sent him down right away and get someone on the roster who would be more useful.

 

[HomeRunBaker]

 
That still means he should be in AAA, putting up numbers that might generate trade interest without eating the whole contract.
 
No logical argument exists for Castillo to be riding the bench in the major leagues.  As JtB said, arguing otherwise is simply putting your head in the sand.

The logical reason was to have a healthy 4th OF and everyday player on the bench for a couple days with Sandoval and Swihart out. He was used in this role during each of these games. Now that Sandoval is back and Holt can move around the time is right today to send Castillo down.....5 days ago wasn't the right time, we needed him on the ML team.

 

[chrisfont9]

I think that's legit too. Castillo and Moncada are huge gambles by this front office. If they bust, the team will be hurt far more than the $/WAR and age-regression purists of SOSH will ever admit.

Castillo is a gamble because his contract counts against the luxury tax limit. Moncada was a $30 mil cash dump from Henry's pocket to someone else's, and his ongoing impact to the team is no different from any other guy in the low minors. It's just buying a draft pick. Unless you're Henry's accountant I don't see what risk there is whatsoever.

 

[Harry Hooper]

 

[Plympton91]

Castillo is a gamble because his contract counts against the luxury tax limit. Moncada was a $30 mil cash dump from Henry's pocket to someone else's, and his ongoing impact to the team is no different from any other guy in the low minors. It's just buying a draft pick. Unless you're Henry's accountant I don't see what risk there is whatsoever.

 
People do not become billionaires by playing the lottery with their extra millions.  The idea that the $30 million in luxury tax and $30 million in bonus money spent on Yoan Moncada has zero opportunity cost is divorced from reality in both theory and practice.   At the maximum major league payroll luxury tax rate, that's still $36 million of real payroll, or more than the Nationals will be paying Max Scherzer over the first 2-1/2 seasons of his deal, and the Red Sox aren't at the maximum luxury tax rate this year nor will they be next year.

 

[Rasputin]

 
People do not become billionaires by playing the lottery with their extra millions.  The idea that the $30 million in luxury tax and $30 million in bonus money spent on Yoan Moncada has zero opportunity cost is divorced from reality in both theory and practice.   At the maximum major league payroll luxury tax rate, that's still $36 million of real payroll, or more than the Nationals will be paying Max Scherzer over the first 2-1/2 seasons of his deal, and the Red Sox aren't at the maximum luxury tax rate this year nor will they be next year.

 
The evidence suggests that the Sox will be spending near the tax thresshold every season. Never too much lower, never too much higher. When this doesn't change for the next several years, are you going to admit that if this money wasn't spent on Moncada, it wasn't going to be spent on anyone else?

 

[Bob Montgomerys Helmet Hat]

 
People do not become billionaires by playing the lottery with their extra millions.  The idea that the $30 million in luxury tax and $30 million in bonus money spent on Yoan Moncada has zero opportunity cost is divorced from reality in both theory and practice.   At the maximum major league payroll luxury tax rate, that's still $36 million of real payroll, or more than the Nationals will be paying Max Scherzer over the first 2-1/2 seasons of his deal, and the Red Sox aren't at the maximum luxury tax rate this year nor will they be next year.

People do become billionaires by taking educated gambles with millions of dollars.  Moncada is very young and very raw, but has a shitload of potential.  He's going to take some years to develop in the minors.  
Making any type of judgement on the success of this investment, this soon into the first season, is indefensible and simply foolhardy. 

 

[chrisfont9]

 
People do not become billionaires by playing the lottery with their extra millions.  The idea that the $30 million in luxury tax and $30 million in bonus money spent on Yoan Moncada has zero opportunity cost is divorced from reality in both theory and practice.   At the maximum major league payroll luxury tax rate, that's still $36 million of real payroll, or more than the Nationals will be paying Max Scherzer over the first 2-1/2 seasons of his deal, and the Red Sox aren't at the maximum luxury tax rate this year nor will they be next year.

You called it a "huge gamble." Then you point out how there is some theoretical opportunity cost which, however true, is of completely unknown dimension, and may yet prove to be zero. In a game where aging veterans sometimes get nine-figure contracts, I'd hardly call this opportunity cost of yours a huge gamble.

 

[Mighty Joe Young]

People do not become billionaires by playing the lottery with their extra millions.  The idea that the $30 million in luxury tax and $30 million in bonus money spent on Yoan Moncada has zero opportunity cost is divorced from reality in both theory and practice.   At the maximum major league payroll luxury tax rate, that's still $36 million of real payroll, or more than the Nationals will be paying Max Scherzer over the first 2-1/2 seasons of his deal, and the Red Sox aren't at the maximum luxury tax rate this year nor will they be next year.

The "$30 million in luxury tax" has nothing to do with the MLB luxury tax. Moncada was not signed to a major league contract and none of what was paid counts towards that.

That's not to say a $60 million outlay doesn't have ramifications.

 

[Plympton91]

The "$30 million in luxury tax" has nothing to do with the MLB luxury tax. Moncada was not signed to a major league contract and none of what was paid counts towards that.

That's not to say a $60 million outlay doesn't have ramifications.

Exactly, the net present value of Castillo+Moncada+Porcello is greater than the net present value of Max Scherzer's contract with the Nats. Ben Cherinton chose that path. We will see if 4 to 7 years from now it looks as good as those wishcasts of Moncada's potential.

 

[soxhop411]

“@TimBritton: Rusney Castillo has seen 12 pitches in his five plate appearances tonight.”

 

[Plympton91]

“@TimBritton: Rusney Castillo has seen 12 pitches in his five plate appearances tonight.”

 
That's so 2004.   Aggressiveness is the new working the count.

 

[Lowrielicious]

“@TimBritton: Rusney Castillo has seen 12 pitches in his five plate appearances tonight.”

what a pathetic waste of electrons that tweet is without any more information. 
 
If he went 4 fo 5 with two bombs its a little different to a strikeout and 4 weak grounders isn't it?
 
edit: 2 for 5 with two singles.
JBJ 1 for 5 (single)
Vic 0 for 2.

 

[johnnywayback]

The "$30 million in luxury tax" has nothing to do with the MLB luxury tax. Moncada was not signed to a major league contract and none of what was paid counts towards that.

That's not to say a $60 million outlay doesn't have ramifications.

 
I feel like complaining that we should have kept Lester or signed Scherzer instead of signing Moncada is going to be this generation's "Why did Jay Payton sign here?!?!?!"

 

[Plympton91]

 
I feel like complaining that we should have kept Lester or signed Scherzer instead of signing Moncada is going to be this generation's "Why did Jay Payton sign here?!?!?!"

 
It's not really a "should have," that I'm going for, but rather a realization that the Red Sox did make a conscious decision to eschew paying for elite veteran starting pitchers and instead chose to invest that money in wishcasts of performance from Castillo and Moncada, as well as their proprietary trading strategies that suggested Ric Porcello's 2014 was the real Ric Porcello.   Coupled with the investments in Sandoval and Ramirez, they invested about $400 million from the point that they "won" the Castillo sweepstakes to the point that they "won" the Moncada sweepstakes.  Yet, despite that $400 million outlay they have a dysfunctional position player roster and a terrible pitching staff.   To pretend that Castillo, Moncada, Porcello, Ramirez, and Sandoval was the only way to invest that money is a fallacy, and to pretend that the money to sign Moncada came from some "Cuban-prospect fairy godmother trust fund" and so will have no other cost to the organization is to not understand business.

 

[Rasputin]

 
It's not really a "should have," that I'm going for, but rather a realization that the Red Sox did make a conscious decision to eschew paying for elite veteran starting pitchers and instead chose to invest that money in wishcasts of performance from Castillo and Moncada, as well as their proprietary trading strategies that suggested Ric Porcello's 2014 was the real Ric Porcello.   Coupled with the investments in Sandoval and Ramirez, they invested about $400 million from the point that they "won" the Castillo sweepstakes to the point that they "won" the Moncada sweepstakes.  Yet, despite that $400 million outlay they have a dysfunctional position player roster and a terrible pitching staff.   To pretend that Castillo, Moncada, Porcello, Ramirez, and Sandoval was the only way to invest that money is a fallacy, and to pretend that the money to sign Moncada came from some "Cuban-prospect fairy godmother trust fund" and so will have no other cost to the organization is to not understand business.

 
To think you can come to any concrete conclusions on any of these transactions save Masterson is to not understand this game.
 
Which is to say, please stop being a pompous blowhard.

 

[Plympton91]

 
To think you can come to any concrete conclusions on any of these transactions save Masterson is to not understand this game.
 
Which is to say, please stop being a pompous blowhard.

Oh, I'm not passing judgment on them. See my previous posts in this very thread about why we might need to be patient with Castillo this season.

I'm simply pushing back on this notion that John Henry has some double secret aversion to paying luxury tax money, such that there is an unlimited budget for any transaction that doesn't affect it. They spent $60 million on Moncada because they projected at least $60 million of value from him. They didn't spend on Lester because they reached a point where they projected less value than he got elsewhere. The luxury tax played in only to the extent that it raised or lowered the cost of the signing and no more.

 

[Rasputin]

Oh, I'm not passing judgment on them. See my previous posts in this very thread about why we might need to be patient with Castillo this season.

I'm simply pushing back on this notion that John Henry has some double secret aversion to paying luxury tax money, such that there is an unlimited budget for any transaction that doesn't affect it. They spent $60 million on Moncada because they projected at least $60 million of value from him. They didn't spend on Lester because they reached a point where they projected less value than he got elsewhere. The luxury tax played in only to the extent that it raised or lowered the cost of the signing and no more.

 
So you're pushing back against an imaginary argument that nobody has ever made? Congratulations.

 

[TomRicardo]

 
They spent the same amount of money on Moncada, and he's struggling in low-A.  I know there's a difference in age and development, but paying $30 million to a player in the minors is paying $30 million to a player in the minors.  
 
It is not a black mark if Castillo couldn't acclimate immediately after 2 years off and a winter of injuries.   If he goes down and puts up a 900 OPS in AAA while re-sharpening his defense, as he appears perfectly capable of doing, and then provides $15 million of value per year for the last 5 years of his contract, that's perfectly acceptable.    If he goes down and puts up only a 750 OPS while playing persistently poor defense, that is another story.
 
We shall see how it goes; but at least those of us who said he needs to be playing everyday either in Boston or Pawtucket are vindicated by Farrell's reversal today.

 
 
A 20 year old struggling over his first 100 PAs in professional ball is far less of a concern than 27 YO who looks completely lost on a team full of players that look lost.

 

[johnnywayback]

 
It's not really a "should have," that I'm going for, but rather a realization that the Red Sox did make a conscious decision to eschew paying for elite veteran starting pitchers and instead chose to invest that money in wishcasts of performance from Castillo and Moncada, as well as their proprietary trading strategies that suggested Ric Porcello's 2014 was the real Ric Porcello.   Coupled with the investments in Sandoval and Ramirez, they invested about $400 million from the point that they "won" the Castillo sweepstakes to the point that they "won" the Moncada sweepstakes.  Yet, despite that $400 million outlay they have a dysfunctional position player roster and a terrible pitching staff.   To pretend that Castillo, Moncada, Porcello, Ramirez, and Sandoval was the only way to invest that money is a fallacy, and to pretend that the money to sign Moncada came from some "Cuban-prospect fairy godmother trust fund" and so will have no other cost to the organization is to not understand business.

 
If you want to say that they should worry less about the risk of owing an aging mid-30s pitcher $25-30 million a year for the likely unproductive back half of a long-term contract, fine.
 
If you want to say that they should make a change to how they evaluate players so that they don't make ill-advised medium-term commitments, fine (if extremely premature).
 
I'm just saying, leave Moncada out of it.  There is zero evidence that John Henry's pocketbook is the limiting factor in what he spends -- it's the luxury tax.  Which means there actually IS something of a "Cuban-prospect fairy godmother trust fund," because that you can spend that money without adding to your luxury tax total.  I'm sure nobody fails to understand that, right?  And if John Henry feels that way, well, God bless him, go find some more Cuban prospects to sprinkle that cash on.

 

[soxhop411]

“@MattHuegel: Rusney Castillo leads off with a home run off Ervin Santana just over the right field wall here at McCoy Stadium.”

 

[Plympton91]

 
So you're pushing back against an imaginary argument that nobody has ever made? Congratulations.

 
I agree that you haven't made that argument, but if you think the argument (if it doesn't count against the major league luxury tax, it won't keep the Red Sox from spending on anything else) wasn't made, you need to reread the thread.    It is also made to whitewash the disastrous acquisition of Allen Craig.
 
If John Henry cares more about spending $1 on the major league luxury tax than he cares about spending $1 on the international free agent luxury tax, then he's an economic ignoramous.  No rational reason would exist to give two shits about it.  There are a complicated set of expected marginal costs involved, which I am sure he has worked out to the nearest penny, just like he would in his hedge funds. 
 
At the end of the day, I guarantee that he's maximizing expected net present value with all of these investments, subject to the constraint of a multi-season consolidated overall budget for baseball operations.  And the condition that achieves that objective is for the marginal benefit of last dollar spent in each component of baseball operations to be equal to the marginal benefit of the last dollar spent in every other realm.  That means there's an opportunity cost of each signing, whether it be the $50,000 waiver claim for 2 days of Eric Kratz or the effective $60 million signing bonus to an international free agent.
 
And, I agree completely that we have no idea how good Moncada is going to be on the basis of his first 3 months of American professional baseball; that is also entirely unimportant.   Henry and his front office made an affirmative decision to sign Moncada, Castillo, and Porcello, and an affirmative decision not to sign Max Scherzer for less money than it cost to lock up the three of them.  We will see how that decision plays out over the next 4 to 7 years.
 
 
 

I'm just saying, leave Moncada out of it.  There is zero evidence that John Henry's pocketbook is the limiting factor in what he spends -- it's the luxury tax.  Which means there actually IS something of a "Cuban-prospect fairy godmother trust fund," because that you can spend that money without adding to your luxury tax total.  I'm sure nobody fails to understand that, right?  And if John Henry feels that way, well, God bless him, go find some more Cuban prospects to sprinkle that cash on.

 
This argument is akin to saying, "John Henry is either highly irrational or ignorant of the most fundamental principal of financial management."  I think we're all positive it is not the latter, so, give me a single, sound, rational reason for John Henry to care about whether he spends $1 on the major league luxury tax instead of $1 on the international free agent luxury tax? 

 

[Snodgrass'Muff]

 
We will see how that decision plays out over the next 4 to 7 years.

 
And the following 7 years when Max is still making 15 million a year?

 

[Plympton91]

 
And the following 7 years when Max is still making 15 million a year?

Nope. That"a just deferred salary. All that should matter is discounted net present value of the payment stream. Even if you think all that matters is the luxury tax hit, that only hits for the 7 years on the roster.

 

[Rasputin]

Why is the concept of a one off extra budgetary expense such a problem for you?

The yearly budget is near the tax threshold.

The Moncada signing was a one off expense due to some unique circumstances.

It doesn't take a misunderstanding of anything to do this, it just takes a willingness to recognize exceptional circumstances when they happen.

 

[Cesar Crespo]

The Redsox also just got a huge revenue sharing refund or something of that nature due to being under the cap. They could have used that money to reinvest in the team.

 

[Plympton91]

Why is the concept of a one off extra budgetary expense such a problem for you?

The yearly budget is near the tax threshold.

The Moncada signing was a one off expense due to some unique circumstances.

It doesn't take a misunderstanding of anything to do this, it just takes a willingness to recognize exceptional circumstances when they happen.

What is so exceptional about Moncada? They had a bunch of room in the budget and decided that Castillo, Porcello, Hanley, Panda, and Moncada's projected excess value exceeded what they paid them plus the expected marginal contribution to the luxury tax payments by more than Max Scherzer's excess value exceeded his contract plus the expected marginal contribution of that contract to luxury tax payments. If they're doing it any other way, We should get used to rooting for a last place team.

This is the same owner who blew off the chance to acquire anin his prime an pre-nonsense Alex Rodriguez over $2 million a season? They have a budget and they have a value, and they don't go over it. The reason they end up around the luxury tax every year is an outcome of that strategy (in a competitive market they'll get outbid by a team not over the luxury tax and the same valuation or a team with a higher valuation). It is not an input to it.

 

[Plympton91]

The Redsox also just got a huge revenue sharing refund or something of that nature due to being under the cap. They could have used that money to reinvest in the team.

Ok. They could have used that money in an infinite number of ways. They chose to use it on Castillo, Moncado, Porcello, Ramirez, and Panda.

 

[Rasputin]

What is so exceptional about Moncada?

The _situation_ was exceptional.

Moncada is just a very talented young man who for a variety of reasons is available for cash in a system that is going away soon.

 

[nvalvo]

 
So you're pushing back against an imaginary argument that nobody has ever made? Congratulations.

 
I've made this argument, more or less. 
 
I based it on things Henry and various FO types have said, and on the obvious pattern of decisions the team has made under this ownership group. When there's a way to spend money non-taxably, they do it, whether through the old-style draft, international signings/posting fees, etc. While they've paid tax about half the time, the most they've ever paid (I think) was about 6 million in 2007. 
 
I also believe Henry or one of the other owners has said (although I've been unable to lay my hands on precisely where) that they feel that paying the tax is a bad move, because it makes it hard to get a good return on investment when you're paying a percentage on top. Perhaps they no longer feel that way. 

 

[Soxfan in Fla]

 
I agree that you haven't made that argument, but if you think the argument (if it doesn't count against the major league luxury tax, it won't keep the Red Sox from spending on anything else) wasn't made, you need to reread the thread.    It is also made to whitewash the disastrous acquisition of Allen Craig.
 
If John Henry cares more about spending $1 on the major league luxury tax than he cares about spending $1 on the international free agent luxury tax, then he's an economic ignoramous.  No rational reason would exist to give two shits about it.  There are a complicated set of expected marginal costs involved, which I am sure he has worked out to the nearest penny, just like he would in his hedge funds. 
 
At the end of the day, I guarantee that he's maximizing expected net present value with all of these investments, subject to the constraint of a multi-season consolidated overall budget for baseball operations.  And the condition that achieves that objective is for the marginal benefit of last dollar spent in each component of baseball operations to be equal to the marginal benefit of the last dollar spent in every other realm.  That means there's an opportunity cost of each signing, whether it be the $50,000 waiver claim for 2 days of Eric Kratz or the effective $60 million signing bonus to an international free agent.
 
And, I agree completely that we have no idea how good Moncada is going to be on the basis of his first 3 months of American professional baseball; that is also entirely unimportant.   Henry and his front office made an affirmative decision to sign Moncada, Castillo, and Porcello, and an affirmative decision not to sign Max Scherzer for less money than it cost to lock up the three of them.  We will see how that decision plays out over the next 4 to 7 years.
 
 
 
 
This argument is akin to saying, "John Henry is either highly irrational or ignorant of the most fundamental principal of financial management."  I think we're all positive it is not the latter, so, give me a single, sound, rational reason for John Henry to care about whether he spends $1 on the major league luxury tax instead of $1 on the international free agent luxury tax? 

Did you seriously just call John Henry an economic ignoramus? I think the billions he has made over the years would disagree.

 

[Buzzkill Pauley]

Did you seriously just call John Henry an economic ignoramus? I think the billions he has made over the years would disagree.

 
He did not. He was asking for a rational reason why John Henry would prefer to pay the MLB luxury tax rather than the MiLB international signing luxury tax.
 
My expectation, based on being a baseball luxury tax ignoramus, is that 1.) there is such a reason of which the Sox FO was aware, likely pertaining to how the taxes collected are then distributed to his competitors through revenue sharing (a practice which historically we know Henry hates), and 2.) the opportunity to acquire Moncada, who may well turn out to be a star, provides the additional incentive that the money spent also keeps him from turning into a star for any of the Red Sox' competitors.

 

[In my lifetime]

Isn't the luxury tax avoidance model of the RS vs international tax explained in the following simple fashion:
1. Only a few teams pay the luxury tax, so as a team close to luxury tax threshold the RS are paying a significant premium vs. 90% of the teams for free agents that would put them over the threshold for >1 yr.
2. International tax is now at such a low level that any team signing a player will pay the tax.
Therefore it is harder to get a positive return vs most of the competition in the 1st scenario than the 2nd.

 

[Red(s)HawksFan]

Isn't the luxury tax avoidance model of the RS vs international tax explained in the following simple fashion:
1. Only a few teams pay the luxury tax, so as a team close to luxury tax threshold the RS are paying a significant premium vs. 90% of the teams for free agents that would put them over the threshold for >1 yr.
2. International tax is now at such a low level that any team signing a player will pay the tax.
Therefore it is harder to get a positive return vs most of the competition in the 1st scenario than the 2nd.

 
Isn't it simpler than even that?  The international tax hasn't really accomplished anything in terms of curbing spending given how many teams have exceeded it (by a little or a lot).  The expectation seems to be that there will be an international draft implemented, perhaps as soon as the next CBA negotiations in 2016.  With the draft implemented, there is no more tax and likely no more need to offer a player a $30M bonus just to get him to sign.  So Henry sees no problem with spending the money now since he won't need to spend it in the future.  On the other hand, the luxury tax isn't going anywhere anytime soon.  And gets progressively more penal the more often you exceed the threshold.

 

[Plympton91]

 
Isn't it simpler than even that?  The international tax hasn't really accomplished anything in terms of curbing spending given how many teams have exceeded it (by a little or a lot).  The expectation seems to be that there will be an international draft implemented, perhaps as soon as the next CBA negotiations in 2016.  With the draft implemented, there is no more tax and likely no more need to offer a player a $30M bonus just to get him to sign.  So Henry sees no problem with spending the money now since he won't need to spend it in the future.  On the other hand, the luxury tax isn't going anywhere anytime soon.  And gets progressively more penal the more often you exceed the threshold.

 
That seems reasonable, as does the argument that signings that contribute to a marginal increase in luxury tax payments are less likely to pass a cost benefit test if the competitors for those players are not subject to the tax.   None of that is equivalent to saying that costs that don't count against the major league luxury tax come out of some limitless pool of resources.  If they really did, then the Red Sox would not have ever failed to sign a draft pick, and would win the bidding on a lot more international free agents.   The money for Moncada could have been used to bid up the price of any international free agent last year, lots of whom signed with competitors.   They're matching marginal cost to expected marginal benefit.

 

[glennhoffmania]

P91 is absolutely correct. I really don't see why this has become a debate. Henry is going to evaluate investments based on their return, and paying a premium by going over the luxury tax threshold significantly lowers the ROI. Every investment has a trade-off, whether it's not signing Scherzer or having one less concessions vendor. P91 is explaining how rational investors behave and those arguing with him are basically saying that Henry doesn't behave rationally and to do so would be stupid. That makes no sense.

 

[wade boggs chicken dinner]

P91 is absolutely correct. I really don't see why this has become a debate. Henry is going to evaluate investments based on their return, and paying a premium by going over the luxury tax threshold significantly lowers the ROI. Every investment has a trade-off, whether it's not signing Scherzer or having one less concessions vendor. P91 is explaining how rational investors behave and those arguing with him are basically saying that Henry doesn't behave rationally and to do so would be stupid. That makes no sense.

 
That's not his argument.  His argument - which stemmed from JWB's statement to leave Moncada out of the payroll discussion - is that every dollar spent on the international penalty affects the club the same as a dollar spent on the luxury tax, which is probably (at least as far as I can tell) untrue.
 
Here are two other reasons why Moncada should be left out.  First, the club might see the $30M in tax payments as being spread out over three years, since the Red Sox are barred from signing anyone over $400K for the next two years.  Also, if you recall, when the Sox went over the international cap, they had no idea that Moncada was going to be available in this year - many clubs thought that the OFAC process would kick him into the next calendar year.
 
Second, Moncada in all ilkelihood is a one-off signing because people are pretty sure that an international draft is going to be instituted.  Once the international draft is going to be instituted, the only way to get premium talent is to suck - have high draft picks - or pay a huge premium on the FA (or soon to be FA) market.
 
Whether or not Moncada is a bust, I think it was a reasonable expectation when Moncada signed that the Red Sox will not have access to top-5 talent for a while.  Which is why I think the Moncada signing is so important.  And even if they do suck for a while, that probably just means that they are building a better base for the future.
 
If P91 wants to argue about whether it would have been better to sign Scherzer or Castillo/Porcello/Hanley, have at it*.  But I agree with JWB - leave Moncada out of it.
 
* While I'm sure there's a universe where the Sox signed Scherzer, kept Cespedes, and signed Torres, and currently have the best record in baseball, I'm also sure that there's another universe where the Sox did the same thing and remain at the bottom of the division.

 

[glennhoffmania]

Wade, couldn't Henry have chosen to allocate that 30m to 2015 luxury tax payments instead of international penalties, knowing they'd get under the cap next year anyway, and then treat the 30m as spread over the next X years, the same way you're describing how he may view Moncada? At the end of the day it's still his money and he's choosing how to allocate it, and there isn't an infinite supply. Or at least he's decided how much of his cash he's willing to put into the team.

 

[wade boggs chicken dinner]

Wade, couldn't Henry have chosen to allocate that 30m to 2015 luxury tax payments instead of international penalties, knowing they'd get under the cap next year anyway, and then treat the 30m as spread over the next X years, the same way you're describing how he may view Moncada? At the end of the day it's still his money and he's choosing how to allocate it, and there isn't an infinite supply. Or at least he's decided how much of his cash he's willing to put into the team.

 
So I don't think the Red Sox are going to have $30M in luxury tax payments this year.  And if the Red Sox did construct a payroll to have $30M in luxury tax penalties, they wouldn't be getting under the threshold next year.
 
Which is precisely why Moncada doesn't count.
 
While Henry is okay going over the threshold every so often, I think he's made it clear that he's not building a "structural" tax into payroll - so that basically, the payroll is going to be capped by the need to stay under the threshold once every two or three or four years. 
 
A dollar spent on Moncada and the international tax is not equivalent to a dollar spent at the major league level. 

 

[Plympton91]

 
So I don't think the Red Sox are going to have $30M in luxury tax payments this year.  And if the Red Sox did construct a payroll to have $30M in luxury tax penalties, they wouldn't be getting under the threshold next year.
 
Which is precisely why Moncada doesn't count.
 
While Henry is okay going over the threshold every so often, I think he's made it clear that he's not building a "structural" tax into payroll - so that basically, the payroll is going to be capped by the need to stay under the threshold once every two or three or four years. 
 
A dollar spent on Moncada and the international tax is not equivalent to a dollar spent at the major league level. 

 
But that's not the point.  The point is to equalize the expected marginal benefit of the last dollar spent across all player acquisition platforms.  Moncada had a high expected marginal benefit over acquisition cost, which meant they were willing to pay a 100 percent tax to acquire him.   Their assessment of Scherzer's value just didn't have the same excess over acquisition cost, perhaps because of the implications that his contract had on the expected luxury tax payments over its duration.
 
Again, what looks like a refusal to go over the major league luxury tax is a consequence of their evaluation of marginal benefits and marginal costs within their budget constraint, not an irrational opposition to paying luxury tax money in one realm rather than the other.   If they see a player who looks like a bargain after accounting for the luxury tax, they'll sign that player and pay the tax, just like they did with Moncada and the other players they signed last year over the international cap.

 

[smastroyin]

Yes, the money for Joan came out of the magic bean rainy day fund that John Henry doesn't care about, but other investments are made more rationally.
 
I mean, that seems like the most straightforward explanation to me.
 
Whether you consider something an annuity or pay for it once, there is an NPV.  John Henry understands this and trusted his baseball folks to make the right decisions.  I can't believe how many people (even at the time of signing) don't understand that that 100%(!!!!) penalty actually makes it harder to break even than you would with going over the luxo tax.  And that's fine.  What do I care, really, other than I can't take reading these same arguments that only certain money counts.  It all comes from somewhere, it all fucking counts.  The calculations of the true cost and the expected returns and everything else can be subject to different variables, but there is no denying that the money has to come from somewhere, and presumably all money put toward talent acquisition for the Boston Red Sox comes from essentially the same place.
 
Let me put it this way, say you are in the market for a new car.  It costs $50K, but you can finance it for 10% down and 0% interest for 5 years ($750/month).  Is the latter deal "worse" because there is ongoing cost?  In fact, if you have any way to invest the money, the latter deal is better, all things being equal.  Now, you can say "but if I finance I have to insure extra to meet the bank's requirements and that costs me an extra $50/month" or whatever.  OK, now you can start doing a calculation of which method pays you back and how much risk you are willing to take on, etc.  But at the end of the day, your money is still being spent, either way.

 

[wade boggs chicken dinner]

Yes, the money for Joan came out of the magic bean rainy day fund that John Henry doesn't care about, but other investments are made more rationally.
 
I mean, that seems like the most straightforward explanation to me.
 
Whether you consider something an annuity or pay for it once, there is an NPV.  John Henry understands this and trusted his baseball folks to make the right decisions.  I can't believe how many people (even at the time of signing) don't understand that that 100%(!!!!) penalty actually makes it harder to break even than you would with going over the luxo tax.  And that's fine.  What do I care, really, other than I can't take reading these same arguments that only certain money counts.  It all comes from somewhere, it all fucking counts.  The calculations of the true cost and the expected returns and everything else can be subject to different variables, but there is no denying that the money has to come from somewhere, and presumably all money put toward talent acquisition for the Boston Red Sox comes from essentially the same place.
 
Let me put it this way, say you are in the market for a new car.  It costs $50K, but you can finance it for 10% down and 0% interest for 5 years ($750/month).  Is the latter deal "worse" because there is ongoing cost?  In fact, if you have any way to invest the money, the latter deal is better, all things being equal.  Now, you can say "but if I finance I have to insure extra to meet the bank's requirements and that costs me an extra $50/month" or whatever.  OK, now you can start doing a calculation of which method pays you back and how much risk you are willing to take on, etc.  But at the end of the day, your money is still being spent, either way.

 
Yes the money is spent and yes it counts and yes it's going to show up somewhere on the bottom line. 
 
But that's not the question to which I was responding - that question is whether the signing of Moncada had any effect on how the major league team was built.  I don't think it does.  I don't see any evidence it does, and I don't expect to see any evidence of it in the future.
 
Also, I have to think the Red Sox have to be aware that there is a good chance that Moncada doesn't deliver full value.  However, because his ceiling is (basically) as high as anyone else in the minor leagues right now, the Red Sox pulled the trigger, and I'm rooting for him to become a superstar.

 

[Plympton91]

 
Also, I have to think the Red Sox have to be aware that there is a good chance that Moncada doesn't deliver full value.  However, because his ceiling is (basically) as high as anyone else in the minor leagues right now, the Red Sox pulled the trigger, and I'm rooting for him to become a superstar.

 
Holy hype machine, Batman.
 
Didn't most articles say that Moncada would be "somewhere in the top 10" of the draft if he were available that way?  There were none that I saw indicating he'd be the consensus #1 pick, which you'd think would be a prerequisite to having "a ceiling as high as anyone else in the minor leagues right now."  Especially, considering this year's draft was widely considered to be somewhat weak overall, and his success at such a young age in the Cuban major leagues means there's a better than average floor value on him as well.
 
But back to Rusnay.  4 for 9 with a HR in his first 2 games back.   As long as he can play to a AAA all-star level, his going concern value won't be impacted to badly.   With JBJ in the majors, I hope they also play him in CF, because it is as a CF that he'd have the highest value to a major league team.  But the Red Sox already have Betts and Bradley as CF options.  After this year, he moves to a 5 year $50 million player, and if he can play above average defense in CF and put up a 310 / 350 / 500 line in AAA, that price tag may make him as valuable to the Red Sox as a trade chip as he would be to their major league team.

 

[KillerBs]

I suppose there is always an option to trade someone, but we need some decent OFers here.If Runsey is putting up those numbers at AAA he should be playing every day at Fenway. 
 
There are 2 spots to be claimed in the 2016 OF, with the only real internal candidates being Bradley, Castillo, Holt and Hanley. Ideally Hanley finds a home at 1b/dh by then. You could make Holt a starting OFer but I would like to aim higher as I am still dubious he can keep this up. His role should remain as the best reserve in baseball. 
That leaves Bradley and Castillo.
 
hence, this team is remarkably close to being set for April 2016 as follows. 
 
2- Swihart
3- Hanley
4 - Pedroia
5- Sandoval
6- Bogaerts
7- Betts
8- Bradley
9- Castillo
dh- Ortiz/Hanley
b1- Vazquez/Hanigan?
b2- Holt
b3 - Craig? bs LHPers
b4 - Nava? Marrero?
 
That team has a chance to compete in 2016-17 and should be fun to watch.
 
The key is having a decent idea before April 2016 whether Rusney and/or Bradley are up to the task. If not, the Sox need to go out and get an OFer or 2. Also need to  sort out Hanley and Big Papi at first and DH. Obviously if David is done, we need a 1b. Chris Davis is free agent but little else. 

 

[johnnywayback]

Didn't most articles say that Moncada would be "somewhere in the top 10" of the draft if he were available that way?  There were none that I saw indicating he'd be the consensus #1 pick, which you'd think would be a prerequisite to having "a ceiling as high as anyone else in the minor leagues right now."  Especially, considering this year's draft was widely considered to be somewhat weak overall, and his success at such a young age in the Cuban major leagues means there's a better than average floor value on him as well.
 

 
Scouts have said the 19-year-old Moncada would have been no worse than the second selection were he eligible.
 
https://www.bostonglobe.com/sports/2015/02/25/yoan-moncada-red-sox-essentially-paid-for-pick/A93UgoWd80BqWHdveMBAjJ/story.html

 

[wade boggs chicken dinner]

Holy hype machine, Batman.
 
Didn't most articles say that Moncada would be "somewhere in the top 10" of the draft if he were available that way?  There were none that I saw indicating he'd be the consensus #1 pick, which you'd think would be a prerequisite to having "a ceiling as high as anyone else in the minor leagues right now."  Especially, considering this year's draft was widely considered to be somewhat weak overall, and his success at such a young age in the Cuban major leagues means there's a better than average floor value on him as well.

taking literally five minutes on google, I found this link - http://www.baseballamerica.com/international/yoan-moncada-cuban-baseball-star/ - "If Moncada were eligible for the 2015 draft, he would be in the mix to be the No. 1 overall pick."

I'll let you google "Moncada and potential" to see what others are saying about him.

 

[Plympton91]

Neither of those articles contradicts my point.

I'm not down on Moncada at all, but he's not the most talented player in all the minor leagues and the decision faced by John Henry was not to spend $)0 million on Moncada or stuff the money in his mattress.

Now back to Rusney.