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Red Sox and the Luxury Tax


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#1 SoxScout


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Posted 08 December 2011 - 02:17 AM

Speier wrote this the other day.

It seems like everyone is coming up with a new calculation hourly.

I think it would be good for everyone to check this out if they missed it.

Article: http://www.weei.com/...-might-not-have

Adrian Gonzalez, one of the great bargains in the majors last year at $6.3 million, will see his seven-year, $154 million deal take effect. Jacoby Ellsbury is likely to at least triple his $2.4 million salary of a year ago. Clay Buchholz’ four-year deal, worth approximately $30 million, means that he will count for roughly $7 million more against the luxury tax threshold than he did a year ago.

Assuming that the Sox re-sign David Ortiz -- who could sign a deal with an average annual value of at least the $12.5 million he made last year, and potentially more, since he could accept arbitration and claim a raise of a couple million dollars on a one-year contract -- the Sox will already have roughly $170 million in commitments as calculated for luxury tax purposes, which is based (or at least was in the last collective bargaining agreement) on average annual salary (AAV).

The result? Without a single acquisition, the Sox already have a payroll (as calculated for luxury tax purposes) of roughly $170 million. That leaves about $8 million (give or take a couple million) to spend before hitting the luxury tax threshold.


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#2 SoxScout


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Posted 08 December 2011 - 02:18 AM

The ProJo came up with basically the same numbers: http://blogs.provide...-threshold.html

Add to that the $10 million or so in players' benefits the Red Sox have to count toward the luxury-tax threshold, and Ben Cherington already has in hand a roster being paid more than $157 million next season.

A nine-figure contract for Ortiz -- something averaging $13 million per year over the next two years, for example -- would put Cherington within putting range of the luxury-tax threshold without having filled out his starting rotation.



#3 mikeford


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Posted 08 December 2011 - 02:36 AM

Do we know for certain that ownership is unwilling to exceed the luxury tax threshold this season? I know that's always the general plan but after the way last season ended and the general sour taste left in the fanbase's mouth thanks to the past 3 months, I'd hope they might be flexible on this issue in the interest of patching some glaring holes in the team.

#4 Eric Van


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Posted 08 December 2011 - 02:40 AM

Hill will almost certainly be non-tendered and signed to an ml deal while he rehabs, and Miller signed for $0.6 less than projected, so that gives them $9M or so to play with.

Swapping out Reddick for Cuddyer, etc., is hard to defend from a strictly baseball POV; when you factor in salary, it makes no sense at all.

It's quite possible that only two more players will be added to the MLB roster -- a closer and an 8th-inning guy. They can keep Bowden for bullpen depth in ST and eschew the signing of an Albers type, and they can plan on a bench with Lowrie, Aviles, and McDonald rather than adding the LH OF/1B who would probably be a bit more useful day-to-day than Aviles would. If one of the OF has to go on the DL, they would probably call up Kalish and start him over such a bench guy, so that makes that kind of bench guy significantly less important.

#5 maufman


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Posted 08 December 2011 - 07:13 AM

Some of the best budget-conscious options to address the Sox' needs are already off the board (e.g., Capuano, Nathan).

Keith Law was speculating on ESPN's podcast yesterday that Ryan Madson would land in Boston, but I don't see the Sox spending 3/30 on a reliever if it pushes them over the tax threshold.

#6 Doctor G

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Posted 08 December 2011 - 10:23 AM

In BriMac's projo article he refers to one big if , whether they were over last year. it seems strange to me that they would not be notified of their status in advance of the Winter Meetings. If they were at 163 M according to Cot's on opening day when you add in Aviles Morales and Bedard ,I don't see how they could have been over last year even with 12 M for benefits.

#7 HangingW/ScottCooper

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Posted 08 December 2011 - 10:36 AM

I would think that dealing Iglesias is a very realistic option for the added flexibility it provides.

#8 FFCI

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Posted 08 December 2011 - 10:44 AM

I would think that dealing Iglesias is a very realistic option for the added flexibility it provides.


How much flexibility would freeing up 2.1 million (if he were traded for prospects only) create?

Having 42 million tied up in Dice-K, Lackey and Crawford creates a lack of flexibility - to which there is no quick fix.

Either they decide to accept the fact that the cost of business will include blowing by the luxury tax threshold or they "make do" with their 170 million dollar lineup.

Edit: Adding the thought...

Iglesias is a very realistic option for being a solution to the flexibility problem. Keeping him and eventually having him at shortstop secures that position at an AAV below what they currently are and have been committing to that position in the future.

Edited by FFCI, 08 December 2011 - 10:46 AM.


#9 HangingW/ScottCooper

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Posted 08 December 2011 - 12:05 PM

How much flexibility would freeing up 2.1 million (if he were traded for prospects only) create?

Having 42 million tied up in Dice-K, Lackey and Crawford creates a lack of flexibility - to which there is no quick fix.

Either they decide to accept the fact that the cost of business will include blowing by the luxury tax threshold or they "make do" with their 170 million dollar lineup.

Edit: Adding the thought...

Iglesias is a very realistic option for being a solution to the flexibility problem. Keeping him and eventually having him at shortstop secures that position at an AAV below what they currently are and have been committing to that position in the future.


Considering that they may only be talking about $8-9 million in space, $2 million would be rather significant. Certainly not as significant as moving Scutaro, but still it's substantial. Iglesias is not a major league ready player, and he is being paid $2 million against the cap. He has value, and can be used to acquire a piece that will be able to help the major league team. He's not a face of the franchise prospect. He's Rey Ordonez.

Edit: I posted the AAV's in another thread, but I'll quote it here
http://sonsofsamhorn...73#entry3878673

Per Cots we have $131,435,119 tied into the following players:

Adrian Gonzalez ($21,857,143, AAV $22,000,000)
Carl Crawford ($20,357,143, AAV $20,285,714)
Josh Beckett ($17,000,000, AAV $17,000,000)
John Lackey ($15,950,000, AAV $17,000,000 or $13,833,333 with $500K 2015 option)
Kevin Youkilis ($12,250,000, AAV $10,281,250)
Daisuke Matsuzaka ($10,333,333, AAV $9,000,000)
Dustin Pedroia ($8,250,000, AAV $6,750,000)
Jon Lester ($7,625,000, AAV $6,000,000)
Bobby Jenks ($6,000,000 AAV $6,000,000)
Marco Scutaro ($6,000,000 AAV $4,500,000 - I believe that's how this is handled as the buyout was $1.5 million)
Clay Buchholz ($3,750,000, AAV $7,486,250)
Jose Iglesias ($2,062,500, AAV $2,062,500)

With Lackey's AAV at $13.833 and Scutaro's at $4.5 this puts the AAV at $125,199,047. If I'm wrong on any of this, I apologize. I would guess that the concern here is the luxury tax - they have played around with the luxury tax #s before (Bill Hall is one that comes to mind). I have no idea what Jacoby will get in Arbitration, but with him and Ortiz + Darvish and/or Kuroda and a closer/bullpen arms it's very easy to see how they would exceed $178 million.


Considering that Lackey's $500K option doesn't kick in until he actually misses the time, I would think that the AAV wouldn't be bumped down to $13.833 and that it would effect the AAV for 2013 and beyond. I don't know why this would be any different than the logic behind extending Gonzalez after opening day

Edited by HangingW/ScottCooper, 08 December 2011 - 12:08 PM.


#10 SoxScout


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Posted 08 December 2011 - 01:57 PM

Do we know for certain that ownership is unwilling to exceed the luxury tax threshold this season?



"John Henry has made it clear in front office meetings he doesn't want to pay a luxury tax." - Olney on EEI this morning

#11 gammoseditor


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Posted 08 December 2011 - 02:00 PM

Considering that Lackey's $500K option doesn't kick in until he actually misses the time, I would think that the AAV wouldn't be bumped down to $13.833 and that it would effect the AAV for 2013 and beyond. I don't know why this would be any different than the logic behind extending Gonzalez after opening day


AAV isn't calculated for luxury tax purposes until year end. I don't know how the Lackey thing will work but the luxury tax is a snap shot after the season, not before. This is important because of things like bonuses and trades.

#12 Bowlerman9


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Posted 08 December 2011 - 02:04 PM

AAV isn't calculated for luxury tax purposes until year end. I don't know how the Lackey thing will work but the luxury tax is a snap shot after the season, not before. This is important because of things like bonuses and trades.


Even so, Lackey missing the season gives the Sox the option to pick up .... why would they exercise it now (or at season's end) and not wait until after 2014? Guaranteeing the guy an additional $500K (and thus pushing $13M+ of cap hit into 2016) isnt necessarily a wise idea.

#13 dcmissle


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Posted 08 December 2011 - 02:25 PM

"John Henry has made it clear in front office meetings he doesn't want to pay a luxury tax." - Olney on EEI this morning


It could be a head fake, but I'm really inclined to accept this at face value.

This FO crew has never had difficulty playing the press, and we have Speier and Olney conveying the message, and Lucky deftly reinforcing it on D&C -- "We told Ben to be bold ... you can never rule out a big trade."

If this is the case, I don't blame ownership. There has been a lot of improvident spending. It is natural to insist, *get more out of what we do have.*

This obviously doesn't rule out management stepping up if, for example, the club performs well and needs an injection of this or that at the trading deadline.

#14 maufman


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Posted 08 December 2011 - 02:29 PM

I agree with DC. I think the FO would go through the threshold if it was a difference-maker for, say, extending Ellsbury, but not for a 4th starter or Papelbon replacement.

#15 doc

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Posted 08 December 2011 - 02:39 PM

Even so, Lackey missing the season gives the Sox the option to pick up .... why would they exercise it now (or at season's end) and not wait until after 2014? Guaranteeing the guy an additional $500K (and thus pushing $13M+ of cap hit into 2016) isnt necessarily a wise idea.

I think the Lackey clause is bases on missed time and he hasn't missed it yet.

#16 HangingW/ScottCooper

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Posted 08 December 2011 - 02:44 PM

I think the Lackey clause is bases on missed time and he hasn't missed it yet.


Yeah that was my understanding as well. And how does it work, does it create a $500K club option, or does it create and vest the $500K option?

I understand that Luxury Tax #s are calculated at the end of the year but how would the picking up of a $500K option after opening day be any different to that calculation than extending Gonzalez for 7 years? The whole reason for waiting to extend Gonzalez was to avoid the Luxury Tax hit in 2011.

#17 E5 Yaz


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Posted 08 December 2011 - 03:25 PM

This FO crew has never had difficulty playing the press, and we have Speier and Olney conveying the message, and Lucky deftly reinforcing it on D&C -- "We told Ben to be bold ... you can never rule out a big trade."



That was an fascinating quote.


"One of the things we talked to Ben about when we gave him the job was the 'Be bold' admonition," said Lucchino. "That doesn't necessarily mean a gigantic free agent signing. You can't go out and spend $250 to $300 million every offseason. That runs into real money, as the saying goes. But there are various ways to do things that are big and important. But having said that, you also have to look at the context. We have a solid team. We have a core of returning veterans, and this team was an excellent, excellent baseball team with the best record in baseball through much of last year, at least going into September. You have to pick your places, pick your times to do big things. But our general admonition to Ben is to be bold. … Major free agent splash? I'm skeptical about that, but a major trade? Always a possibility."


http://www.weei.com/...ays-possibility


Although a "big trade" could bring to Boston a big contract

#18 Marbleheader


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Posted 08 December 2011 - 03:48 PM

While the Angels are throwing around monopoly money, would Arte bite on Carl Crawford?

#19 Red(s)HawksFan


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Posted 08 December 2011 - 03:54 PM

While the Angels are throwing around monopoly money, would Arte bite on Carl Crawford?

With roughly $52M invested in three OFs (Wells, Hunter, Abreu) plus Bourjos and Trout in reserve, I don't see where he'd fit.

We need to face facts...Carl Crawford isn't going anywhere. No amount of wishcasting is going to move him out of Fenway anytime soon.

#20 rembrat


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Posted 08 December 2011 - 03:56 PM

While the Angels are throwing around monopoly money, would Arte bite on Carl Crawford?

I'd say it is doubtful. They have to make big time decisions on Haren and Santana who both have 1 year remaining on their contracts with a club option 2013. At least one of those guys will be getting extended.

Plus Kendrick and Aybar, 2 of their staple guys, are also free agents in 2013.

#21 Doctor G

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Posted 08 December 2011 - 07:31 PM

The only way they can get flexibility is to move Beckett. After failing to obtain Wilson, Buehrle or Garza, Texas might be willing to package some prospects for Beckett.

The Sox could combine Rangers prospects with their own to make a deal for Garza.

This would give them 8-9 M salary relief.

Edited by Doctor G, 08 December 2011 - 07:31 PM.


#22 Rudy Pemberton


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Posted 08 December 2011 - 07:34 PM

The only way they can get flexibility is to move Beckett. After failing to obtain Wilson, Buehrle or Garza, Texas might be willing to package some prospects for Beckett.

The Sox could combine Rangers prospects with their own to make a deal for Garza.

This would give them 8-9 M salary relief.


How would this make any sense? They need more pitching, not less. The Red Sox problem is that they don't have anyone ready to step in and replace their high salaried players, so they can't move any of them.

#23 SoxScout


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Posted 08 December 2011 - 07:51 PM

How would this make any sense? They need more pitching, not less. The Red Sox problem is that they don't have anyone ready to step in and replace their high salaried players, so they can't move any of them.


Because Garza would replace Beckett and you'd have money to give to someone like Kuroda or Maholm or Madson?

Shockingly, it's actually a thrown out there 3-way deal that fits for 3 teams.

#24 Rudy Pemberton


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Posted 08 December 2011 - 08:26 PM

I guess that makes sense if the Sox are down on Beckett and have dramatically changed their evaluation of him in the past year. You'd have to kick in prospects to get Garza, who'd you have under contract for one year, right, and then who'd probably cost more to lock up than Beckett's deal? It seems like Texas would be better off just signing Kuroda or Darvish and holding on to their prospects. Seems reactionary to want to give up on Beckett just as his extension kicks in but I guess the Sox don't have many options if they want to clear some payroll to do other things.

#25 SoxScout


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Posted 08 December 2011 - 08:33 PM

Maybe, but how can you not be down on Beckett, Bradford was just on EEI saying Beckett ripped Valentine on their phone call about his slow pitching comment.

He ballooned, he tanked, and now he is acting like an epic bitch over the wrong things. Plus Francona basically called him a drama queen the other night on ESPN. All that being said, he is good when he wants to be, I can see both sides.

#26 Rudy Pemberton


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Posted 08 December 2011 - 08:40 PM

Sure, all these guys are pricks especially when things don't go well. It's not as if Garza is known as being a great guy. At least we know Beckett can pitch in this market, division, etc. Giving up on guys like Beckett, Youks, etc. In the aftermath of last season seems too reactionary to me. I don't really have an issue with Beckett bitching Valentine out once, as long as he's working hard now and ready to go in February. It would be healthy if everyone just forgot about what happened last year, it happened, it's done. Trading Beckett to an AL rival, a potential competitor, seems like a bad idea. They need Beckett AND Garza (or Kuroda, Darvish, Gio, etc.)

#27 gammoseditor


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Posted 08 December 2011 - 08:45 PM

Maybe, but how can you not be down on Beckett, Bradford was just on EEI saying Beckett ripped Valentine on their phone call about his slow pitching comment.

He ballooned, he tanked, and now he is acting like an epic bitch over the wrong things. Plus Francona basically called him a drama queen the other night on ESPN. All that being said, he is good when he wants to be, I can see both sides.


And Valentine said after Beckett got everything off his chest they had a good conversation. It sounds like everyone moved on. Not sure why it would be an issue.

#28 OCD SS


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Posted 08 December 2011 - 08:55 PM

"John Henry has made it clear in front office meetings he doesn't want to pay a luxury tax." - Olney on EEI this morning


It has been tangentially mentioned, but I think it bears being directly stated, that the Sox acceptance of the CBT threshold as a cap for the team's salary is (or at least appears to be) a self-imposed limit that doesn't appear to have any real link to the team's revenues or profitability. JWH's comment at least sounds like someone who is objecting on a moral, as opposed to practical level.

I'm actually a little surprised. The new CBA has made the penalties against overspending in free agency a lot more palatable when compared to the penalties for overspending on amateur players. It makes more sense to me to take a modest CBT hit than it does to have to trade away young talent (that won't be as easy to replace) to fill needs. Furthermore, the central issue has been brought on by injury, and I'd expect there to be allowances in the budget to address a short term (seasonal) problem, rather than deviating too far from the long term plan. LL saying that "We just have to get more out of what we have" seems to me like a way to have his cake and avoid having to refer to 2012 as a bridge year. The Sox are not looking to make any major upgrades, and the players he's (possibly inadvertently) referring to are back of the rotation guys like Tazawa, Dubront, Bowden, or maybe Raunado. I don't think it really follows that if Carl Crawford performed better the Sox wouldn't need to replace DiceK's or Lackey's innings on the Staff.

#29 Pumpsie


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Posted 09 December 2011 - 12:44 PM

It has been tangentially mentioned, but I think it bears being directly stated, that the Sox acceptance of the CBT threshold as a cap for the team's salary is (or at least appears to be) a self-imposed limit that doesn't appear to have any real link to the team's revenues or profitability. JWH's comment at least sounds like someone who is objecting on a moral, as opposed to practical level.

I'm actually a little surprised. The new CBA has made the penalties against overspending in free agency a lot more palatable when compared to the penalties for overspending on amateur players. It makes more sense to me to take a modest CBT hit than it does to have to trade away young talent (that won't be as easy to replace) to fill needs. Furthermore, the central issue has been brought on by injury, and I'd expect there to be allowances in the budget to address a short term (seasonal) problem, rather than deviating too far from the long term plan. LL saying that "We just have to get more out of what we have" seems to me like a way to have his cake and avoid having to refer to 2012 as a bridge year. The Sox are not looking to make any major upgrades, and the players he's (possibly inadvertently) referring to are back of the rotation guys like Tazawa, Dubront, Bowden, or maybe Raunado. I don't think it really follows that if Carl Crawford performed better the Sox wouldn't need to replace DiceK's or Lackey's innings on the Staff.


Good points all. The Sox have also shown, in the past, the willingness to go above the cap once in a while, but NEVER two years in a row when the bigger penalties kick in. I think Henry might see that as "shameful," and too much like the Yankees, and, hence, a moral stance on his part.

#30 Manramsclan

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Posted 09 December 2011 - 12:57 PM

Good points all. The Sox have also shown, in the past, the willingness to go above the cap once in a while, but NEVER two years in a row when the bigger penalties kick in. I think Henry might see that as "shameful," and too much like the Yankees, and, hence, a moral stance on his part.



Agreed. I also think there is something to be said for having a limit with regards to baseball operations and putting together a team. It provides a framework and restraint from going that extra mile in the free agent market, which often comes back to bite you. Throughout the last ten years, in addition to the success of the Yankees and the Red Sox, there have been big-budget teams like the Cubs and Mets who have spent money only to be terrible. If the Sox decided to go over the luxury tax to sign pitchers like Buerhle or Wilson, they would only find themselves in the same spot on the back end of those deals: with little flexibility and holes in the roster. At this point, waiting out some of the long terms deals currently on the books and focusing on trades is likely the best option this team has to get better.

I don't think the Red Sox are currently missing out on much with regards to the 2011 free agent class, especially when next year's class looks more intriguing. That said, it is hard to see them with their hands tied trying to fill the same holes that a lot of money was already spent to fill.(ie spots #4 & #5 in the rotation)

#31 Red(s)HawksFan


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Posted 09 December 2011 - 01:47 PM

Agreed. I also think there is something to be said for having a limit with regards to baseball operations and putting together a team. It provides a framework and restraint from going that extra mile in the free agent market, which often comes back to bite you. Throughout the last ten years, in addition to the success of the Yankees and the Red Sox, there have been big-budget teams like the Cubs and Mets who have spent money only to be terrible. If the Sox decided to go over the luxury tax to sign pitchers like Buerhle or Wilson, they would only find themselves in the same spot on the back end of those deals: with little flexibility and holes in the roster. At this point, waiting out some of the long terms deals currently on the books and focusing on trades is likely the best option this team has to get better.

I don't think the Red Sox are currently missing out on much with regards to the 2011 free agent class, especially when next year's class looks more intriguing. That said, it is hard to see them with their hands tied trying to fill the same holes that a lot of money was already spent to fill.(ie spots #4 & #5 in the rotation)

I agree with the bolded, and I think how the Red Sox operated last winter was also with that thought in mind. They were proactive in trading for Gonzalez and locking him up rather than wait for him to get to free agency along with Pujols and Fielder. As much as we don't like it at the moment, the Crawford deal was signed with an eye toward limiting the open OF spots this off-season to one (rather than both LF and RF) and in doing so, increase the odds that one or the other of their young prospects (Reddick/Kalish) would emerge and take it. And the rotation was locked up through 2012, meaning they wouldn't have to wade into the shallow pool of free agents. Without the injuries, all they'd really be shopping for this off-season is a closer (or a reliever for Bard's spot with Bard moving to the 9th).

Rather than solve the problems created by injury by throwing good money after bad, they may just have to ride it out with short-term, low-dollar solutions for 2012 and attack the deeper talent pool next winter with more financial flexibility.

#32 Rudy Pemberton


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Posted 09 December 2011 - 01:54 PM

Good points all. The Sox have also shown, in the past, the willingness to go above the cap once in a while, but NEVER two years in a row when the bigger penalties kick in. I think Henry might see that as "shameful," and too much like the Yankees, and, hence, a moral stance on his part.


I doubt it's shame that's causing Henry to not want to exceed the cap. It's "we dramatically increased payroll two years ago, and have 0 playoff games to show for it, so why should I give you even more"?

#33 Alcohol&Overcalls

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Posted 09 December 2011 - 02:45 PM

I doubt it's shame that's causing Henry to not want to exceed the cap. It's "we dramatically increased payroll two years ago, and have 0 playoff games to show for it, so why should I give you even more"?


... or maybe it's a guy with a solid pedigree of understanding business and value saying that paying $1.42 on the dollar (particularly for fungible resources like relievers) sets him up for an atrocious return on the investment?

#34 Rasputin


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Posted 09 December 2011 - 03:15 PM

... or maybe it's a guy with a solid pedigree of understanding business and value saying that paying $1.42 on the dollar (particularly for fungible resources like relievers) sets him up for an atrocious return on the investment?


Nah, that's silly, reality based nonsense.

#35 Rudy Pemberton


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Posted 09 December 2011 - 03:21 PM

... or maybe it's a guy with a solid pedigree of understanding business and value saying that paying $1.42 on the dollar (particularly for fungible resources like relievers) sets him up for an atrocious return on the investment?



Yeah, that's kind of the same thing, though. He's not going to pay the luxury tax b/c he doesn't think increased spending, from this point, equals increased chance of winning, esp. since it hasn't in the past two years.

Don't think it has anything to do with morality or shame, as some have suggested.

#36 OCD SS


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Posted 09 December 2011 - 10:11 PM

I doubt it's shame that's causing Henry to not want to exceed the cap. It's "we dramatically increased payroll two years ago, and have 0 playoff games to show for it, so why should I give you even more"?


In this scenario does the front office (Ben) get to ask exactly how much blame he (JWH) was willing to lay at the feet of the medical staff, and how much they cost?

... or maybe it's a guy with a solid pedigree of understanding business and value saying that paying $1.42 on the dollar (particularly for fungible resources like relievers) sets him up for an atrocious return on the investment?


It could be that, but do we get to question the guy's understanding of business and value for not paying ~$4M in CBT against a $178M payroll when compared to the increased expectations of gaining extra revenues from making the playoffs? (Using figures of 142% of ~$5 - $10M (as my own guess of the extra salary) in additional expenditure which turns into an actual ~$7M - $14M in payroll + CBT payment.) Is it reasonable to just say that 2 of the last 3 big signings had bad years, therefore we're going to completely back away from those expenditures and the analysis that lead to those signings, and we'll take our chances with the current competitiveness of the team and risk the potential profits from short term ticket sales, or making the post season? To me holding to the CBT threshold number as a hard cap seems like cutting off the team's nose to spite its face when you're dealing with injuries to 2/5th of the starting rotation.

Yeah, that's kind of the same thing, though. He's not going to pay the luxury tax b/c he doesn't think increased spending, from this point, equals increased chance of winning, esp. since it hasn't in the past two years.

Don't think it has anything to do with morality or shame, as some have suggested.


Maybe my referring to it as a moral point is not the right description, but I do stand by the judgment (in lieu of seeing the team's financial records) that the issue isn't that JWH can't afford to pay over the CBT, it's that he doesn't want to.

If baseball ops were to also weigh in on the side of any signings not actually improving the team's chances to win (read as "make the post-season") I could also accept that, but I have seen absolutely zero analysis to that effect. We are looking at a team that has lost one of it's top 2 relievers and 2 members of the starting rotation. Those are innings that at this point are going to be filled by Bard and Aceves converting to starting roles and Tazawa, Dubront, and Bowden going to the 'pen. Is there really an argument to be made that Madson doesn't help the 'pen and Darvish doesn't help the rotation, even at a 142% premium?

Edited by OCD SS, 09 December 2011 - 10:14 PM.


#37 maufman


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Posted 09 December 2011 - 10:29 PM

Unless something unexpected happens (e.g., Ellsbury being willing to sign a team-friendly extension), there's no investment that would justify paying luxury tax.

The new playoff system puts a premium on winning your division. The Sox are a longshot to overtake the MFY in 2012. Signing a 2-win player like Ryan Madson or Mark Buehrle wouldn't change that.

Edited by maufman, 09 December 2011 - 10:30 PM.


#38 Eric Van


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Posted 09 December 2011 - 10:38 PM

If baseball ops were to also weigh in on the side of any signings not actually improving the team's chances to win (read as "make the post-season") I could also accept that, but I have seen absolutely zero analysis to that effect. We are looking at a team that has lost one of it's top 2 relievers and 2 members of the starting rotation. Those are innings that at this point are going to be filled by Bard and Aceves converting to starting roles and Tazawa, Dubront, and Bowden going to the 'pen. Is there really an argument to be made that Madson doesn't help the 'pen and Darvish doesn't help the rotation, even at a 142% premium?

There will definitely be room under the cap to sign Madson, and that will happen, as per the closer thread there's no one bidding against us except the Orioles*. And the cost / benefit argument for converting both Bard and Aceves is compelling, which is why all signs point that they are heading in that direction.

So the question then becomes whether you go over the cap to shore up the set-up relief. I'll continue that thought in the bullpen thread.

*And the final "trade" -- three years of Papelbon for three of Madson, two first round draft picks, $12-$15M, plus no commitment of another $12.5M in 2015 -- should end up being a huge win. Papelbon's better than Madson, but he's not that much better.

#39 EvilEmpire

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Posted 09 December 2011 - 10:42 PM

I think Henry might see that as "shameful," and too much like the Yankees, and, hence, a moral stance on his part.


I appreciate Yankees ownership in doing their best to fulfill their moral contract with fans to put a competitive team on the field even at the expense of generating additional profits from all the money spent on the luxury tax.

#40 soxfan121


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Posted 09 December 2011 - 11:12 PM

1. The only way I'm OK with a sub-luxury tax season is if it's to reset the penalty % and to pursue John Danks or Matt Cain or another of the much better FA class next off-season.

2. A trade of the weirdly-in-demand Jed Lowrie and the savings on Miller's deal (vs. projected in the first post) save more AAV than trading Iglesias.

3. Madson @ 9M+ is a waste of resources unless the Sox plan to revisit the notion of multiple relief aces/CbC and give him 100+ IP/season. With Jenks (possibly) around to eat 3-run leads in the 9th, the Sox could employ Madson/Bard/Aceves as multi-inning rally killers. ~300 innings from those three pitchers and 45 from Jenks would be more than enough, if they were all up to career averages. Pay-per-inning closers drive me insane with the waste.

4. There will almost certainly be some RH bat left seeking a job in February; the ST invite list for this team is gonna be insane this season. Limited budget means more familiar names, seeking one last chance in the sun.

#41 Doctor G

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Posted 10 December 2011 - 01:07 AM

The reason I advocated moving Beckett is that next winter he will be a year older and less tradeable given the free agent competition. The Sox are going to have to find dollars to spend on Ellsbury somewhere. If they go smack up against the cap in April they can't do anything inJuly when some of these future free agents might be available in trades.

We will know a lot more about the SP market after the Darvish posting result next week. The losers will still be looking for a starter.

As Joel Sherman demonstrated in his column about the Yankees and the cap it is of paramount importance to be under 189 M in 2014. That is only 11m from 178M now.

Edited by Doctor G, 10 December 2011 - 01:09 AM.


#42 Papelbon's Poutine


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Posted 10 December 2011 - 04:02 AM

In this scenario does the front office (Ben) get to ask exactly how much blame he (JWH) was willing to lay at the feet of the medical staff, and how much they cost?



It could be that, but do we get to question the guy's understanding of business and value for not paying ~$4M in CBT against a $178M payroll when compared to the increased expectations of gaining extra revenues from making the playoffs? (Using figures of 142% of ~$5 - $10M (as my own guess of the extra salary) in additional expenditure which turns into an actual ~$7M - $14M in payroll + CBT payment.) Is it reasonable to just say that 2 of the last 3 big signings had bad years, therefore we're going to completely back away from those expenditures and the analysis that lead to those signings, and we'll take our chances with the current competitiveness of the team and risk the potential profits from short term ticket sales, or making the post season? To me holding to the CBT threshold number as a hard cap seems like cutting off the team's nose to spite its face when you're dealing with injuries to 2/5th of the starting rotation.



Maybe my referring to it as a moral point is not the right description, but I do stand by the judgment (in lieu of seeing the team's financial records) that the issue isn't that JWH can't afford to pay over the CBT, it's that he doesn't want to.

If baseball ops were to also weigh in on the side of any signings not actually improving the team's chances to win (read as "make the post-season") I could also accept that, but I have seen absolutely zero analysis to that effect. We are looking at a team that has lost one of it's top 2 relievers and 2 members of the starting rotation. Those are innings that at this point are going to be filled by Bard and Aceves converting to starting roles and Tazawa, Dubront, and Bowden going to the 'pen. Is there really an argument to be made that Madson doesn't help the 'pen and Darvish doesn't help the rotation, even at a 142% premium?


Amen.

Only thing I can add is that the quote from olney, I read more as "Henry would prefer not to pay luxury tax", not " Henry refuses to pay luxury tax". Which I can understand.

#43 Eric Van


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Posted 10 December 2011 - 01:14 PM

3. Madson @ 9M+

He's not seeing 9M of anything except some recently devalued foreign currency. He looked to us like the second best reliever on the market, but I'm not sure his failure to sign so far is entirely because his asking price has been too high. I've been looking at what teams are paying for on the closer's market, and it's largely WPA and leverage. I think the Marlins (who had money to burn) just plain preferred Bell to him. Everyone else went for bang-for-bucks. And now we and maybe the Orioles are the only bidders. People may be shocked at what he signs for.

#44 Bigpupp

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Posted 13 December 2011 - 01:06 AM

This might be off by a little here and there but here's a total that I've been keeping. All Arbitration cases (minus Ortiz, which I simply guess on) were from Matt Swartz' work (http://www.mlbtrader...salaries.html). If you see any mistakes please let me know.

Posted Image

#45 Lose Remerswaal


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Posted 13 December 2011 - 07:33 AM

This might be off by a little here and there but here's a total that I've been keeping. All Arbitration cases (minus Ortiz, which I simply guess on) were from Matt Swartz' work (http://www.mlbtrader...salaries.html). If you see any mistakes please let me know.

Posted Image

What is "Medical 10.5"?

#46 Bigpupp

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Posted 13 December 2011 - 07:46 AM

What is "Medical 10.5"?


Medical that will cost 10.5 this year. I wish i could tell you exactly was it is, from what i understand it's really organizational expenses that fall under the cap.

Either way it is an estimate and it is also cited in the first post of this thread as Medical so I kept it listed that way.

#47 Kevin Jewkilis

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Posted 13 December 2011 - 09:16 AM

Medical that will cost 10.5 this year. I wish i could tell you exactly was it is, from what i understand it's really organizational expenses that fall under the cap.

Either way it is an estimate and it is also cited in the first post of this thread as Medical so I kept it listed that way.


Benefits are included in the CBT total so that teams don't try to circumvent it by offering a low salary and writing "large briefcases full of cash during every road trip" into the.contract. I think calling it medical is just metonymy.

#48 rembrat


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Posted 13 December 2011 - 01:29 PM

According to a major league source, the Red Sox expect to exceed the $178 million payroll threshold that would trigger luxury tax payments for the 2012 season.

Now, with the Shoppach signing, the Sox have 13 players under contract for 2012 for approximately $130 million. Additionally, the team will retain David Ortiz (likely to receive in the vicinity of $14 million) and the 23 players who were tendered contracts for 2012 on Monday will likely add approximately $20 million in additional payroll. Combined with the benefits payments, that would push the team’s 2012 payroll between $170 million and $175 million, with the team still looking to add multiple pitchers to round out both the rotation and the bullpen.


Link

Still not sure of what they'll do.

#49 EvilEmpire

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Posted 22 December 2011 - 10:38 PM

Small update. Luxury tax bills are out and the Yankees and Red Sox are the only ones paying this year. The Yankees continue to pay at the 40% rate while the Sox are now up to 30% since they've missed the target two years in a row.

ESPN Article


The New York Yankees were hit with a $13.9 million luxury tax bill Thursday, their lowest since 2003.

The fee, assessed by Major League Baseball under its labor contract, is down from $18 million last year and $25.7 million in 2009, when the Yankees won the World Series.


Boston, which missed the playoffs for the second straight season, is the only other team that will have to pay a tax. The Red Sox received a bill for $3.4 million, up from last year's $1.5 million.

Season-ending payroll information and the tax was sent to teams and obtained by The Associated Press.

According to the collective bargaining agreement, checks to pay the tax must be sent to the commissioner's office by Jan. 31.

New York has paid the tax in all nine years since it began, $206 million of the $227 million raised under the penalty for high payrolls. The only other teams to pay have been the Red Sox (a total of $18.8 million), Detroit ($1.3 million) and the Los Angeles Angels ($927,000).

The Yankees pay at a 40 percent rate on the amount of their payroll over $178 million, a figure that includes the average annual values of contracts plus benefits. Boston, which exceeded the threshold for the second straight year, pays at a 30 percent rate. For purposes of the tax, New York's final payroll was $212.7 million and Boston's was $189.4 million.



#50 Rasputin


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Posted 23 December 2011 - 12:08 AM

The new playoff system puts a premium on winning your division. The Sox are a longshot to overtake the MFY in 2012. Signing a 2-win player like Ryan Madson or Mark Buehrle wouldn't change that.


I don't buy that for a second. Give me a mediocre starter and we're a coin flip with the Yankees as far as I can see.

It's Tampa that you have to worry about.