If the season gets to September 1, the Red Sox luxury tax resets

[soxhop411]

Per Alex Speier
“@alexspeier: Update on this: There is no automatic CBT reset if there’s no 2020 season. If there is no 2020 season and Sox spend > $210M in 2021, they’d be taxed as a team surpassing the CBT threshold for a third straight season.”
View: https://twitter.com/alexspeier/status/1244751528398856192


So unless the Sox say “screw the CBT” this offseason because of the uncertainty of the CBA, the Sox will most likely have a quiet offseason next offseason

 

[Harry Hooper]

What do we need to get 2020 to count, a 30-game season?

 

[Plympton91]

If there is no 2020 season, that means the shutdown has been even more catastrophic than it is now. Some owners personal fortunes may be wiped out. The Marlins, with all the debt that ownership took on, are probably near bankruptcy already. Unless they somehow managed to negotiate TV contracts that pay them not to play, no team will be in any financial condition to spend $210 million in 2021 anyway. So, it doesn’t actually matter if they reset in 2020 in that case. I assume they’ll have to meet their long-term contractual commitments, but everyone without a long-term contract will be playing for the major league minimum.

 

[snowmanny]

Is that what happened to the NHL?

Ed: it looks as if teams with bigger payrolls did tend to cut them during the return year.
https://en.m.wikipedia.org/wiki/List_of_team_payrolls_in_the_NHL

 

[Patek's 3 Dingers]

If there is no 2020 season, that means the shutdown has been even more catastrophic than it is now. Some owners personal fortunes may be wiped out. The Marlins, with all the debt that ownership took on, are probably near bankruptcy already. Unless they somehow managed to negotiate TV contracts that pay them not to play, no team will be in any financial condition to spend $210 million in 2021 anyway. So, it doesn’t actually matter if they reset in 2020 in that case. I assume they’ll have to meet their long-term contractual commitments, but everyone without a long-term contract will be playing for the major league minimum.

The Marlins generate a negative net operating income so if the the season is cancelled they will save some money. The negative is that their rebuilding plan will be put back a year.

 

[the1andonly3003]

better hope John Henry's quant fund is doing well this month

 

[nvalvo]

If there is no 2020 season, that means the shutdown has been even more catastrophic than it is now. Some owners personal fortunes may be wiped out. The Marlins, with all the debt that ownership took on, are probably near bankruptcy already. Unless they somehow managed to negotiate TV contracts that pay them not to play, no team will be in any financial condition to spend $210 million in 2021 anyway. So, it doesn’t actually matter if they reset in 2020 in that case. I assume they’ll have to meet their long-term contractual commitments, but everyone without a long-term contract will be playing for the major league minimum.

Given what we're hearing about the state of advertising revenue elsewhere in the ad-supported media landscape — news organizations have outstanding readership/viewership right now and trouble selling ads — even teams with favorable TV contracts should be worrying about counterparty risk — although I'm not sure how much better it would be to own your own network.

In the absence of consumer demand, the whole ferris wheel stops turning.

 

[BaseballJones]

So if there's no baseball in 2020...

- Players accrue a year of service time, so that means that Betts would not play for the Dodgers but he'd be paid by them, and he'd be a free agent in November of 2020. But it also means that the Sox lose a year of control of Verdugo.

- The luxury tax wouldn't reset, so the Sox would have to stay under it again for 2021, which means that as Mookie becomes a free agent, the Sox would be completely out on signing him.

Since the entire purpose for trading him was to get under the luxury tax for 2021, with the hopes of resigning Betts then, this all seems like pretty much a worst-case scenario for the Red Sox. Not only can't they have the luxury tax reset for 2021, they can't sign Betts, AND they lose a precious year of control of Verdugo.

Am I understanding this correctly?

 

[Hendu for Kutch]

So if there's no baseball in 2020...

- Players accrue a year of service time, so that means that Betts would not play for the Dodgers but he'd be paid by them, and he'd be a free agent in November of 2020. But it also means that the Sox lose a year of control of Verdugo.

- The luxury tax wouldn't reset, so the Sox would have to stay under it again for 2021, which means that as Mookie becomes a free agent, the Sox would be completely out on signing him.

Since the entire purpose for trading him was to get under the luxury tax for 2021, with the hopes of resigning Betts then, this all seems like pretty much a worst-case scenario for the Red Sox. Not only can't they have the luxury tax reset for 2021, they can't sign Betts, AND they lose a precious year of control of Verdugo.

Am I understanding this correctly?

And the Dodgers gave up that package for exactly nothing in return. It's the Covid-19 of trades for everyone involved.

 

[Pitt the Elder]

Wouldn't playing in front of empty stadiums make more sense than canceling the season entirely? If we're talking about the COVID-19 crisis extending for 12-18 months before there's a vaccine, leagues will have to find a way to adapt or face utter ruin. I wonder if, once the curve is flattened enough, they would explore ways to get skeleton crowds (e.g., 1/5 or 1/10 stadium capacities) with extreme social distancing measures to give the stadiums something of a live feel. You can imagine mandatory masks, designated seats spaced far apart, no concessions, and social-distancing queues strictly enforced for entry, bathrooms, etc.

 

[BaseballJones]

And the Dodgers gave up that package for exactly nothing in return. It's the Covid-19 of trades for everyone involved.

They still get Price!

 

[lexrageorge]

Wouldn't playing in front of empty stadiums make more sense than canceling the season entirely? If we're talking about the COVID-19 crisis extending for 12-18 months before there's a vaccine, leagues will have to find a way to adapt or face utter ruin. I wonder if, once the curve is flattened enough, they would explore ways to get skeleton crowds (e.g., 1/5 or 1/10 stadium capacities) with extreme social distancing measures to give the stadiums something of a live feel. You can imagine mandatory masks, designated seats spaced far apart, no concessions, and social-distancing queues strictly enforced for entry, bathrooms, etc.

I think a lot depends on how well we are able to control the virus via a test-and-contain strategy in the summer. We'll need some level of control regardless, or baseball games will be way at the bottom of the list of issues we are dealing with.

There are certainly options that are likely being discussed. Biggest issue with MLB is that the calendar is running against them to some extent.

 

[Patek's 3 Dingers]

Wouldn't playing in front of empty stadiums make more sense than canceling the season entirely? If we're talking about the COVID-19 crisis extending for 12-18 months before there's a vaccine, leagues will have to find a way to adapt or face utter ruin. I wonder if, once the curve is flattened enough, they would explore ways to get skeleton crowds (e.g., 1/5 or 1/10 stadium capacities) with extreme social distancing measures to give the stadiums something of a live feel. You can imagine mandatory masks, designated seats spaced far apart, no concessions, and social-distancing queues strictly enforced for entry, bathrooms, etc.

Out here in Sacramento, any nonessential gathering is not allowed. If fans are barred from attending games or are to maintain social distancing, it's likely 25 guys sharing a dugout won't be acceptable.

 

[IpswichSox]

Wouldn't playing in front of empty stadiums make more sense than canceling the season entirely? If we're talking about the COVID-19 crisis extending for 12-18 months before there's a vaccine, leagues will have to find a way to adapt or face utter ruin. I wonder if, once the curve is flattened enough, they would explore ways to get skeleton crowds (e.g., 1/5 or 1/10 stadium capacities) with extreme social distancing measures to give the stadiums something of a live feel. You can imagine mandatory masks, designated seats spaced far apart, no concessions, and social-distancing queues strictly enforced for entry, bathrooms, etc.

In theory it should be doable even with empty stadiums, but it would take just one player to get sick for an entire team to be at risk given the confines of the clubhouse, air travel, bus travel, etc. Even if no player died, player(s) being on extended IL trips could fundamentally upend a team and competitive play. What if some percentage of, or key players on, the Yankees, Red Sox and Rays get wiped out, causing the teams to be effectively non-competitive, resulting in the Orioles winning the division?

I want to see baseball as much as anyone, but like with the economy and Trump's previous "Easter" comments, we have to do this right, even if it means canceling the season.

 

[BlackJack]

Out here in Sacramento, any nonessential gathering is not allowed. If fans are barred from attending games or are to maintain social distancing, it's likely 25 guys sharing a dugout won't be acceptable.

To be fair* - they would have plenty of space to spread out in the stands...


*To be faaaaiiiir

 

[genoasalami]

I can see a 60 to 75 game season. Is that enough?

 

[Yelling At Clouds]

Not to pick on anyone as a lot of people were saying it, but “the Red Sox will sign Mookie after the season” struck me as the same kind of wishful thinking as “we’ll be up and running by Easter.”

 

[Patek's 3 Dingers]

To be fair* - they would have plenty of space to spread out in the stands...


*To be faaaaiiiir

It will be tough for the batter to reach an outside pitch if he has to stand six feet from the catcher.

 

[Plympton91]

God, this sucks.

 

[JBJ_HOF]

There will be no season in 2020
In 2021 the Red Sox will need to sign about 5 $5 million replacement level players to fill out the roster and stay under the tax (SP, SP, DH, RP, CF/RF)
After the 2021 season the Sox will sign Lindor
After 2022 Bogaerts will opt out, Vazquez, Bennintendi, and Eovaldi all leave

Lindor, Devers, Verdugo are the long term core

 

[simplicio]

So if there's no baseball in 2020...

- Players accrue a year of service time, so that means that Betts would not play for the Dodgers but he'd be paid by them, and he'd be a free agent in November of 2020. But it also means that the Sox lose a year of control of Verdugo.

- The luxury tax wouldn't reset, so the Sox would have to stay under it again for 2021, which means that as Mookie becomes a free agent, the Sox would be completely out on signing him.

Since the entire purpose for trading him was to get under the luxury tax for 2021, with the hopes of resigning Betts then, this all seems like pretty much a worst-case scenario for the Red Sox. Not only can't they have the luxury tax reset for 2021, they can't sign Betts, AND they lose a precious year of control of Verdugo.

Am I understanding this correctly?

I'd think the worst case scenario would have been NOT making the trade, and having the rest of Price's contract, no lux reset, no chance of resigning Mookie, and not having Verdugo, Downs and Wong. Does this new development suck? Sure. But I think the Dodgers are the ones with the claim to a worst case scenario right now.

 

[BaseballJones]

I'd think the worst case scenario would have been NOT making the trade, and having the rest of Price's contract, no lux reset, no chance of resigning Mookie, and not having Verdugo, Downs and Wong. Does this new development suck? Sure. But I think the Dodgers are the ones with the claim to a worst case scenario right now.

Yeah well actually not making the trade hoping to get one more year out of Mookie, only to have this year happen with the season being canceled and getting NOTHING from Mookie, and then he becomes a free agent that you can’t afford to sign for 2021...yeah that would have been worse.

 

[Ale Xander]

There will be no season in 2020
In 2021 the Red Sox will need to sign about 5 $5 million replacement level players to fill out the roster and stay under the tax (SP, SP, DH, RP, CF/RF)
After the 2021 season the Sox will sign Lindor
After 2022 Bogaerts will opt out, Vazquez, Bennintendi, and Eovaldi all leave

Lindor, Devers, Verdugo are the long term core

Why would they spend $5 mil a player?
They can just bring up:
Groome, Darwin, Casas, Mata/Houck, Duran/Jimenez

 

[Hank Scorpio]

If teams have to play their players, which they should have to, then being under the luxury tax even if 0 games are played should count.

Such bullshit.

 

[BaseballJones]

If teams have to play their players, which they should have to, then being under the luxury tax even if 0 games are played should count.

Such bullshit.

I totally agree with that. Otherwise they're getting penalized twice basically.

 

[Mueller's Twin Grannies]

If teams have to play their players, which they should have to, then being under the luxury tax even if 0 games are played should count.

Such bullshit.

I'm guessing the MLBPA might have an issue with it, but couldn't the owners just convene under emergency protocol (via teleconference) and vote to overturn that provision effective immediately? Or will that violate some kind of law?

Basically, how locked in is this rule?

 

[JBJ_HOF]

Why would they spend $5 mil a player?
They can just bring up:
Groome, Darwin, Casas, Mata/Houck, Duran/Jimenez

Yikes.

 

[JBJ_HOF]

If teams have to play their players, which they should have to, then being under the luxury tax even if 0 games are played should count.

Such bullshit.

If they don't play they don't pay the players and the players can't sue for it, it was in the agreement last week.

 

[Captaincoop]

Wouldn't playing in front of empty stadiums make more sense than canceling the season entirely? If we're talking about the COVID-19 crisis extending for 12-18 months before there's a vaccine, leagues will have to find a way to adapt or face utter ruin. I wonder if, once the curve is flattened enough, they would explore ways to get skeleton crowds (e.g., 1/5 or 1/10 stadium capacities) with extreme social distancing measures to give the stadiums something of a live feel. You can imagine mandatory masks, designated seats spaced far apart, no concessions, and social-distancing queues strictly enforced for entry, bathrooms, etc.

Such an unfair advantage for the Rays. They've been meeting those social distancing standards for years.

 

[JimD]

Any discussion of the CBT needs to start with the acknowledgement that we have no idea what MLB's finances are going to look like in two months, never mind the next offseason. The 2021 free agent market for sure is going to be a complete unknown - whether that puts the Sox in a better position for a possible Mookie reunion remains to be seen (I do think that his hopes of a Trout-like megadeal are gone, though).

 

[Marceline]

I'm guessing the MLBPA might have an issue with it, but couldn't the owners just convene under emergency protocol (via teleconference) and vote to overturn that provision effective immediately? Or will that violate some kind of law?

Basically, how locked in is this rule?

Why would the owners vote for something that would mainly benefit the Red Sox?

 

[Mueller's Twin Grannies]

Why would the owners vote for something that would mainly benefit the Red Sox?

Are the Red Sox the only team in jeopardy of such a thing? I imagine some other big market teams would be interested as well.

 

[JBJ_HOF]

Are the Red Sox the only team in jeopardy of such a thing? I imagine some other big market teams would be interested as well.

The Cubs were the only other team interested in resetting this year, but they weren't for sure doing it like the Sox.

 

[Mueller's Twin Grannies]

The Cubs were the only other team interested in resetting this year, but they weren't for sure doing it like the Sox.

This year, sure, but now that this has (potentially) happened once, it means it could happen again and I can't imagine every big market team, comfortable or not at press time, is looking forward to it being their turn in the barrel if it does in a year where that team (or multiple teams) are trying to avoid the penalty. Teams like NYY, LAA, LAD, CHC, and a few others come to mind as habitual line-steppers big spenders who may not want to be the ones without a chair to sit in when the music stops next time.

 

[Plympton91]

Any discussion of the CBT needs to start with the acknowledgement that we have no idea what MLB's finances are going to look like in two months, never mind the next offseason. The 2021 free agent market for sure is going to be a complete unknown - whether that puts the Sox in a better position for a possible Mookie reunion remains to be seen (I do think that his hopes of a Trout-like megadeal are gone, though).

This is actually a good point. If the dislocations from the shutdowns and lingering fear of the virus lead to a sustained depression and a semi-permanent loss in GDP, Mookie Betts’ decision to “bet on himself” rather than take the Red Sox best offer this offseason may cost him $100 million+ in future income without even having taken the field in 2020.

the lessons of “SuperForecasting” strike again. The sum of all possible future states of the world you’re considering have to equal 100%. While no one could have predicted this virus (hell, as recently as January 14th the WHO, relying on the word of the CCP, said it wasn’t spreading human-to-human) Mookie didn’t put enough weight on “Severe Recession in 2020” when computing the expected value of his potential future free agent contract.

 

[jon abbey]

Bumping...

The update on this via Alex Speier is that the season needs to get past the trading deadline of August 31 for the penalty to reset, so the first pitch thrown in September would do it.

View: https://twitter.com/alexspeier/status/1284284006570352641?s=21

 

[jon abbey]

Posted on March 30:

What do we need to get 2020 to count, a 30-game season?

Very close!!

 

[snowmanny]

We didn't get the seventh place team in the playoffs but in addition to having Herb Washington III (or, possibly, Steven Wright) on second base every tenth inning we do have this exciting element added to the 2020 season. I will be following the test results closely every day hoping we make it! Odda are against it but I think the Sox have a chance!

 

[greek_gawd_of_walks]

I knew just rooting for the season to start in order for the luxury tax to reset was foolhardy.

Now what's more likely: a) the Sox finish with a record .500 or better; or b) the season even sees August 31st?

I'll take the Sox, simply because they could be at 7-7 when the bottom completely falls out of this thing we're calling the 2020 MLB season.

 

[DeadlySplitter]

also, I believe the Yanks, etc. get one year of over luxury tax if September 1 hits.

So the best-case scenario for the Sox is the season is cancelled in early September, and the Yanks etc. waste a year of over luxury tax while they reset.

 

[Earthbound64]

So the best-case scenario for the Sox is the season is cancelled in early September

Nah, best-case for the Sox is that they win the World Series.

 

[allmanbro]

How does this date get decided? It seems completely arbitrary.

 

[Red(s)HawksFan]

How does this date get decided? It seems completely arbitrary.

Day after the trade deadline?

15 outs out of 27 (55.5%) is what is needed for an official game. I guess 60% of games played (36 of 60) is what is needed for an official season.

 

[Yelling At Clouds]

Not to be Captain Killjoy, but what do people think happens if/when they reset the tax? I know it’s nice to get out from under some of the penalties, but I don’t think the plan is to suddenly resume their Dombrowskian spending habits. Why not just keep Dombrowski in that case? I think we’re looking at moves that are more Martin Perez than Gerrit Cole for a bit of a while at least.

 

[Manuel Aristides]

Not to be Captain Killjoy, but what do people think happens if/when they reset the tax? I know it’s nice to get out from under some of the penalties, but I don’t think the plan is to suddenly resume their Dombrowskian spending habits. Why not just keep Dombrowski in that case? I think we’re looking at moves that are more Martin Perez than Gerrit Cole for a bit of a while at least.

It isn't either/ or. With an untaxed bankroll, Bloom can pick and choose his investments. While I agree you're unlikely to see Pablo Sandoval and Hanley Ramirez try to squeeze through that door, I'm pretty sure Bloom is aware that elite talent is, in some circumstances, worth overpaying for. We still haven't seen how he operates without serious financial constraint; for all we know he's dying to throw half a billion dollars at someone and just needs the chance!

 

[jon abbey]

I'm pretty sure Bloom is aware that elite talent is, in some circumstances, worth overpaying for.

I would say this is almost never the case, but also we have no idea what the next CBA will look like after the 2021 season, so really anything is possible.

 

[Red(s)HawksFan]

Not to be Captain Killjoy, but what do people think happens if/when they reset the tax? I know it’s nice to get out from under some of the penalties, but I don’t think the plan is to suddenly resume their Dombrowskian spending habits. Why not just keep Dombrowski in that case? I think we’re looking at moves that are more Martin Perez than Gerrit Cole for a bit of a while at least.

They don't have to resume Dombrowskian spending habits, but they'll again have the flexibility to do so if it's justified. They're currently looking at being nearly $70M under the luxury tax next season before re-signing any free agents. That's enough room to be competitive for free agents like Mookie, but also be in a position to take on someone else's about-to-be-too-expensive star (maybe with some prospects tacked on).

But the thing is, they'd don't have to spend to the cap, and I don't think most here want or expect them to. The key is they don't have to hold back if they see an opportunity they don't want to pass up. That definitely hasn't been the case the last couple years.

 

[cannonball 1729]

Why not just keep Dombrowski in that case?

Because the Sox had run out of prospects for him to trade.

 

[Manuel Aristides]

I would say this is almost never the case, but also we have no idea what the next CBA will look like after the 2021 season, so really anything is possible.

I mean, I guess it depends what we mean when we say "overpay" and "worth it" but I'll take a swing at a defensive clarification. My handle's namesake is an example of paying tip top dollar for a FA that pretty much worked out. You don't even have to get the WAR/$ calculator out; do they win in '04 or '07 without him? Almost certainly not. Similar situation is brewing for your Yankees. The Cole contract was (at least in the context that I initially meant "overpay", which is to say a contract that will likely be an eventual albatross), an overpay. But if NYY wins the title because he carries them through October, it's arguably already "worth it". If they win two, it'll be hard to say that overpaying Cole was a mistake, even if he becomes even a 37 year old making $36m a year for negative WAR.

My overall point was that we have little reason to believe they won't be players for major free agents again whenever the tax has reset. There are situations where teams in title windows are IMO arguably wise to overpay for a piece that launches them into title territory, but sure, YRMV.

 

[jon abbey]

That's why I said 'almost never', there are definitely exceptions. Keep in mind that BOS put Manny on waivers in the middle of that deal and no one else claimed it, and the economics of the current game make huge deals even less likely to be wise investments. For every example like the ones you gave, there are probably five on the other side of the ledger. I think this post states it well:

The key is they don't have to hold back if they see an opportunity they don't want to pass up. That definitely hasn't been the case the last couple years.