[Jay A Zee]

Rudy Pemberton, on Dec 6 2006, 09:10 AM, said:

It does make one wonder what the state of the "$100M player developmental machine" is. All the talk about the strife between Lucchino and Theo over the future of the franchise last year...and what is the end result? The spending doesn't matter much to me, it's not my money, but the team certainly does appear to be gambling on free agents again. The Drew and Lugo moves are really no less risky than the ones made / not made in the past few years. Granted, the market has shifted...but I wonder if this was always part of the plan or if the plan has changed. If it's the latter, I think it's great. Being too rigid with a philosophy is a recipe for disaster; but it makes me wonder how realistic the "build from within" ever was, or perhaps I just misinterpreted it.
<{POST_SNAPBACK}>

This response is without a lot of knowledge about the Sox lower minors - granted.

It may be that an evaluation of position players in the system indicates that RF and SS may be lacking in AAA and AA right now and that they may not see the fruits of the recent drafts for at least 3-4 years in these positions. In the meantime, they have to use free agency as the stop gap until that can fully be realized. Obviously, they aren't going to hit on all draft picks, but perhaps they are not as anxious to sign as free agents those positions they feel like are going to be covered within a year or two by high-end minor leaguers/low end Major leaguers. i.e. Starting pitching and believe it or not - relief. This is probably why they didn't make Justin Speier a priority, and why it's likely they won't get into a long-term deal with a closer this year.

That said, Theo did a great job of forecasting the market this winter by locking up guys like Ortiz / Crisp / Wake before the evidence of this offseason clearly shows these guys as underpaid in the free agent market.

[LahoudOrBillyC]

I still believe in the "$100M development machine" model. Free agents are just about money, whereas last off-season was mainly about making trades, and trades are where you have to make the choice between building from within or not. The deals for Beckett, Crisp, and Mirabelli dramatically reduced the quality and quantity of the farm system. Whether bad luck or not, the trades have not worked out thus far.

Theo said at the end of the season that the lesson he drew from 2006 was that the club lost its way in terms of building the system and he vowed to get back to that. Ultimately I think this is wise.

No system is going to be good enough to win on its own, ideally you use free agents to augment the machine.

[bowiac]

Rudy Pemberton, on Dec 6 2006, 09:10 AM, said:

It does make one wonder what the state of the "$100M player developmental machine" is. All the talk about the strife between Lucchino and Theo over the future of the franchise last year...and what is the end result? The spending doesn't matter much to me, it's not my money, but the team certainly does appear to be gambling on free agents again. The Drew and Lugo moves are really no less risky than the ones made / not made in the past few years. Granted, the market has shifted...but I wonder if this was always part of the plan or if the plan has changed. If it's the latter, I think it's great. Being too rigid with a philosophy is a recipe for disaster; but it makes me wonder how realistic the "build from within" ever was, or perhaps I just misinterpreted it.
<{POST_SNAPBACK}>

It's worth keeping in mind that we don't have any particularly good RF or SS prospects which Drew and Lugo would be blocking, so it's really a compromise of the "build from within" concept. It's not like they signed a 2B.

[Worst Trade Evah]

Rudy Pemberton, on Dec 6 2006, 09:10 AM, said:

It does make one wonder what the state of the "$100M player developmental machine" is. All the talk about the strife between Lucchino and Theo over the future of the franchise last year...and what is the end result? The spending doesn't matter much to me, it's not my money, but the team certainly does appear to be gambling on free agents again. The Drew and Lugo moves are really no less risky than the ones made / not made in the past few years. Granted, the market has shifted...but I wonder if this was always part of the plan or if the plan has changed. If it's the latter, I think it's great. Being too rigid with a philosophy is a recipe for disaster; but it makes me wonder how realistic the "build from within" ever was, or perhaps I just misinterpreted it.
<{POST_SNAPBACK}>

I don't understand this concern. Has there been any sign the Sox are less interested in their development machine? That they aren't interested in spending in the draft? That they've cut back international scouting? Haven't the last two drafts been outstanding? They needed some pieces, the farm wasn't ready yet, so they got them.

They've traded some young talent, which is good, and they've kept some young talent, which is also good. The point is having the young talent around to give you both options, which didn't used to be the case. Their goal is consistent competitiveness. The method is an arbitrage-style of pursuit of value within that goal. A key aspect of that is the player development machine. Signing these free agents says nothing whatsoever about their committment to the player development machine. We had neither a rightfielder nor a shortstop, and none ready in the system. We used to have a shortstop, but we traded him for a stud young pitcher, which we were *also* short on.

I don't believe this front office has ever been particularly rigid, except maybe with regard to too close an adherence to estimations of "value", but even then they've probably generally been right. They are mixing old and young in an effort to stay competitive on an on-going basis, with an understanding that in a market like this, developing within is very important. And the last two drafts show they take that very seriously.

This post has been edited by Worst Trade Evah: 06 December 2006 - 11:09 AM

[LahoudOrBillyC]

Another thing, relating to "Boston doesn't really care about money". Of the contracts handed out this off-season the Red Sox two free agents seem fairly tame.

The advantage the Red Sox have is not deep pockets. Almost all these teams have deep pockets. Baltimore goes into every off-season ready to spend money and they can't get anyone to sign. Detroit a few years ago bid higher than anyone else for everyone and ended up with Ordonez because no one else wanted him. The Cubs are spending money like drunken sailors.

The advantage the Red Sox have is that a lot of players want to play for them. It wasn't too long ago that this was not true, that the Red Sox played the role of the Cubs, outbidding everyone for Kirby Puckett or Barry Bonds in the early 1990s and ending up with Ivan Calderon or Matt Young. Everything changed, of course, the day Pedro Martinez decided to sign a long-term deal after the Red Sox acquired him in 1997. The entire franchise turned its pivot foot on that day.

The question is how does this change for someone like the Orioles? There is no reason why that organization should be trailing the Red Sox--they have all the money in the world, a great new ballpark. They need their own "Pedro Moment", a franchise player that they either develop or trade for or something.

Baseball would be better off without guys like Curt Schilling saying, "OK, I'll either play for NY, Boston or Philadelphia." These other franchises need to become desirable. It is not all about money. In fact, its the second tier franchises that end up driving the market by overpaying for Gary Mathews after the big free agents turn them away.

This post has been edited by LahoudOrBillyC: 06 December 2006 - 11:42 AM

[cjust]

Click in the chart to make changes. Feel free to update it with more accurate information.

[iframe]http://www.nvaria.co...oxsalaries.aspx[/iframe]

This post has been edited by cjust: 04 January 2007 - 03:41 PM

[TheRooster]

soxfaninyankeeland, on Dec 6 2006, 05:28 AM, said:

Matt Clement's rotator cuff and labrum repair will keep him from pitching until at least the middle of '07, and possibly beyond. Clement's 9.5 million dollar salary isn't going anywhere.
<{POST_SNAPBACK}>

And if he can't pitch at all, then insurance will cover his salary (or the bulk of it), correct?

[Rudy Pemberton]

Quote

The question is how does this change for someone like the Orioles? There is no reason why that organization should be trailing the Red Sox--they have all the money in the world, a great new ballpark. They need their own "Pedro Moment", a franchise player that they either develop or trade for or something.

Didn't they get that with Tejada?

[TomRicardo]

TheRooster, on Dec 6 2006, 01:46 PM, said:

And if he can't pitch at all, then insurance will cover his salary (or the bulk of it), correct?
<{POST_SNAPBACK}>

Yes however that salary is still taxed under the luxury tax system.

[SoxFanSince57]

Rudy Pemberton, on Dec 6 2006, 02:52 PM, said:

Didn't they get that with Tejada?
<{POST_SNAPBACK}>

While I think Angelos is BAD for MLB, he is not a dumb man. In fact, he is smart and really knows how to make money.

I would not be surprised in the slightest if he bought the O's for two reasons; first ego gratification and second to strip-mine the franchise and sell it. The O's were a money machine and now they are having problems drawing fans. He bought the franchise, got his money out of operating income; got money from mlb for the okay for the DC franchise when there was no rule saying that he was due compensation since the Nats are in the NL (no territorial infringement) and he got part ownership in the regional sports network.

I would not be surprised at all if he sells the franchise for big bucks to a group led by Cal Ripken in the next few years. Angelos is ALL about making money for himself period. He has made fortunes on asbestos and cigarette lawsuits where his law firm kept a huge part of the awards.

IMO, this is a classic “milking strategy” in business terms.

[Worst Trade Evah]

Just curious if anyone knows the answer, but is the gap between marginal win/$ for pre-arb and post-arb players growing? By how much? Any way to see what that relationship looks like over time?

[TomRicardo]

Why are people adding the money owed to Renteria and Arroyo under luxury tax? The teams that received them must pay their full luxury tax value. That money that was given in the trade is not taxed. Remember it is the AAV that is taxed not the actual amount the team is paying the player. ARod's full contract is taxed on the Yankees.

[Crazy Puppy]

TomRicardo, on Dec 6 2006, 02:46 PM, said:

Why are people adding the money owed to Renteria and Arroyo under luxury tax?  The teams that received them must pay their full luxury tax value.  That money that was given in the trade is not taxed.  Remember it is the AAV that is taxed not the actual amount the team is paying the player.  ARod's full contract is taxed on the Yankees.
<{POST_SNAPBACK}>

Incorrect.

From the CBA's section on determining "Actual Club Payroll" for purposes of the luxury tax (Article XXIII, Section C):

Quote

...an assignor Club that pays cash consideration to defray all or part of the salary obligation of the assignee Club for an assigned Player shall include such cash consideration in its Actual Club Payroll in the Contract Year in which the cash consideration is paid;

[Bowlerman9]

TomRicardo, on Dec 6 2006, 02:46 PM, said:

Why are people adding the money owed to Renteria and Arroyo under luxury tax?  The teams that received them must pay their full luxury tax value.  That money that was given in the trade is not taxed.  Remember it is the AAV that is taxed not the actual amount the team is paying the player.  ARod's full contract is taxed on the Yankees.
<{POST_SNAPBACK}>

Thats wrong in so many ways. The team sending the money is taxed on it. Thats why we only pay 137K for Hinske under the rules.

I disagree about Arroyo though. I am 99% certain that that 1.5M was sent in 2006 to even out the WMP/Arroyo salaries, thus it was all taxed last year. Renteria's number is also a bit lower, since I think 3M of the 11M we sent them is going to year 5, the option year.

[philly sox fan]

Bowlerman9, on Dec 6 2006, 03:12 PM, said:

Thats wrong in so many ways. The team sending the money is taxed on it. Thats why we only pay 137K for Hinske under the rules.
<{POST_SNAPBACK}>

That's the second time you've said that for Hinke, but I don't think it's true.

Hinske signed a multiyear deal - 5yrs/14.75M. The AAV of that deal is 2.95M.

His 2007 salary is 5.625M of which the Blue Jays are paying 2.8125M. The Sox are paying the other half - 2.8125M.

If he was a Jay, his tax number would be 2.95M. As a Sox it can't be any less than 2.8125, which is ~137K less than the Jays number. Is that why you think the Sox are only paying 137k? That doesn't seem correct.

cjust

Schilling's 2007 season is a club option. I beleive the option salary of 13M replaces the AAV of 12.5M.

[Bowlerman9]

philly sox fan, on Dec 6 2006, 06:05 PM, said:

That's the second time you've said that for Hinke, but I don't think it's true.

Hinske signed a multiyear deal - 5yrs/14.75M.  The AAV of that deal is 2.95M.

His 2007 salary is 5.625M of which the Blue Jays are paying 2.8125M.  The Sox are paying the other half - 2.8125M.

If he was a Jay, his tax number would be 2.95M.  As a Sox it can't be any less than 2.8125, which is ~137K less than the Jays number.  Is that why you think the Sox are only paying 137k?  That doesn't seem correct.

cjust

Schilling's 2007 season is a club option.  I beleive the option salary of 13M replaces the AAV of 12.5M.
<{POST_SNAPBACK}>

Hinske's tax number is 2.95M, as you stated. Ultimately, thats the amount of money in his contract that hasnt been taxed over the last 5 years. The Blue Jays are paying 2.81M in cash to the Sox, which is 100% taxable to the BJ's. Since his total tax number is 2.95M, the Sox are left to pay .140.

This is the exact same situation which left us paying ~100K on Jay Payton's salary.

[philly sox fan]

Bowlerman9, on Dec 6 2006, 06:13 PM, said:

Hinske's tax number is 2.95M, as you stated. Ultimately, thats the amount of money in his contract that hasnt been taxed over the last 5 years. The Blue Jays are paying 2.81M in cash to the Sox, which is 100% taxable to the BJ's. Since his total tax number is 2.95M, the Sox are left to pay .140.

This is the exact same situation which left us paying ~100K on Jay Payton's salary.
<{POST_SNAPBACK}>

Do you have a CBA citation for that interpretation of the rules because it's a pretty clumsy loophole? I don't think it's correct.

[Bowlerman9]

philly sox fan, on Dec 6 2006, 07:31 PM, said:

Do you have a CBA citation for that interpretation of the rules because it's a pretty clumsy loophole?  I don't think it's correct.
<{POST_SNAPBACK}>

This is under the luxury tax section:

"If a Uniform Player’s Contract is assigned by any means to
another Major League Club, the assignor Club shall be allocated
Salary through the date of the assignment and Salary shall begin
being allocated to the assignee Club on the following day, regardless
of the Player’s reporting date. Beginning with Player assignments
after September 30, 2002, an assignor Club that pays cash
consideration to defray all or part of the salary obligation of the
assignee Club for an assigned Player shall include such cash consideration
in its Actual Club Payroll in the Contract Year in which
the cash consideration is paid; provided, however, that any such
cash consideration included as part of a Player assignment made
during the 2006 Contract Year but not payable until the 2007
Contract Year shall be included in the assignor Club’s 2006 Actual
Club Payroll to the extent that the assignee Club does not have
equivalent salary obligations under Player contracts obtained in
the assignment in the 2007 championship season or beyond. Any
cash consideration that is, pursuant to the preceding sentence,
included in the Actual Club Payroll of the payor Club shall be
subtracted from the Actual Club Payroll of the payee Club in the
same Contract Year in which it is added to the payor Club’s Actual
Club Payroll."

I'm not a lawyer, but thats how I understand it. I remember it being written about in the globe when we traded Roberts for Payton and cash. Payton only counted (i think) 100K against the cap for that year.

This post has been edited by Bowlerman9: 06 December 2006 - 07:42 PM

[cjust]

philly sox fan, on Dec 6 2006, 04:05 PM, said:

cjust

Schilling's 2007 season is a club option.  I beleive the option salary of 13M replaces the AAV of 12.5M.

philly, you're right about that. I just imported my chart from last season to make this one. I did it quickly and didn't spend a lot of time getting all the numbers right.

I've created the chart in a manner that anybody here can update it. Just click into one of the cells and change the dollar amounts or description. If you hit 'save', it will change the way everybody sees the chart. So, if anybody sees things that are wrong on the chart, they can feel to update it it with the correct numbers.

[philly sox fan]

Bowlerman9, on Dec 6 2006, 07:41 PM, said:

This is under the luxury tax section:

"If a Uniform Player’s Contract is assigned by any means to
another Major League Club, the assignor Club shall be allocated
Salary through the date of the assignment and Salary shall begin
being allocated to the assignee Club on the following day, regardless
of the Player’s reporting date. Beginning with Player assignments
after September 30, 2002, an assignor Club that pays cash
consideration to defray all or part of the salary obligation of the
assignee Club for an assigned Player shall include such cash consideration
in its Actual Club Payroll in the Contract Year in which
the cash consideration is paid; provided, however, that any such
cash consideration included as part of a Player assignment made
during the 2006 Contract Year but not payable until the 2007
Contract Year shall be included in the assignor Club’s 2006 Actual
Club Payroll to the extent that the assignee Club does not have
equivalent salary obligations under Player contracts obtained in
the assignment in the 2007 championship season or beyond. Any
cash consideration that is, pursuant to the preceding sentence,
included in the Actual Club Payroll of the payor Club shall be
subtracted from the Actual Club Payroll of the payee Club in the
same Contract Year in which it is added to the payor Club’s Actual
Club Payroll."

I'm not a lawyer, but thats how I understand it. I remember it being written about in the globe when we traded Roberts for Payton and cash. Payton only counted (i think) 100K against the cap for that year.
<{POST_SNAPBACK}>

That addresses the obligation of the team paying money to have that cash count towards their final payroll figure despite the fact that there isn't an player contract and his AAV on their roster anymore.

It doesn't address - at least I don't think, it was confusing in the middle - what the obligation is for the team that receives money. The way you're looking at the team with the contract - the Sox in the Hinske example - starts with the total contract AAV (2.95M for Hinske) and then gets to subtract the money that they recieve (2.8125M) from the AAV. Therefore the Sox are on the hook for 137,500 in potential payroll cost.

That might be true, but that excerpt doesn't make it clear and it certainly would not be equitable to both teams. That lack of fairness doesn't mean it's not a true loophole in the CBA, but this one seems so obvious and clumsy.

Let's look at 2 Sox related transactions.

1. Hinske - a case where the Sox get money

His AAV is 2.95M. The Sox and Jays will both pay him 2.8125M. Let's assume both teams are over the luxury tax threshold and therefore would actually have to pay the tax. By your interpretation the Jays would have to pay the tax on 2.8125M and the Sox just 137,500 even though both teams are actually paying the same amount. In that case the Jays ought to be pretty pissed.

2. Edgar Renteria - a case where the Sox send money

Renteria's AAV is 10M. After the trade the Braves will pay him 6M/yr for 2006-08 and the Sox will pay 2M, 3M, 3M. The AAV of the Sox contribution is 2.67M. Everybody agrees - and that excerpt makes clear - the Sox are on the hook for 2.67M for payroll considerations.

What's the Braves obligation? By your Hinske interpretation it would be the AAV (10M) minus the cash recieved (2.67M) or 7.33M. If they were over the tax threshold, they would have to pay taxes on 7.33M for a player that they're actually paying 6M per year. Again, in that case the Braves ought to be pretty pissed.

Although in both case the Sox seem to make out pretty well.

The rule should be written so that both sides are taxed in an equitable manner and the easiest way to accomplish that is for both teams to be taxed based on their actual cash outlay. So effectively, the AAV is the determinant factor for when a single team pays a player, but once a contract is split between teams it becomes irrelevent and that taxes are based on actual cash outlay only. When the CBA explicitly says that the team that sends money has to pay tax on that cash, it is also implicitly saying that the recieving team has to pay tax on the cash it spends regardless of the AAV.

Now that excerpt - and perhaps nowhere in the CBA - does it say that, but it makes much more sense. In the two above examples:

1. The Sox and Jays pay 2.8125M and have to pay tax on 2.8125M.

2. The Sox pay 2.67M and pay tax on 2.67M while the Braves pay 6M and pay taxes on 6M.

That's arguably less complicated and certainly much more fair.