Red Sox payroll on track to be larger than ever to start season
by Brian MacPherson, Providence Journal
John Henry said firmly that he would authorize a payroll in excess of the luxury-tax threshold for one year in the right circumstance. At the time he said it, that circumstance was assumed to involve the return of Jon Lester — but even without Jon Lester, the Red Sox are poised to exceed the threshold for the first time since 2011.
Even before the addition of Craig Breslow to the roster this week on a $2-million contract, the Red Sox already appeared to have pushed past the luxury-tax threshold of $189 million. Their payroll as constituted has pushed past $193 million, which would be an all-time high for Opening Day — well beyond the $175 million with which they started the season in 2012.
(Bolstered by the signing of Carl Crawford, Boston’s payroll wound up at $189 million for luxury-tax purposes in 2011, earning them a $3.4-million bill from Major League Baseball. The blockbuster trade with the Los Angeles Dodgers the following August pushed them back below the threshold.)
Even accounting for the trade of Yoenis Cespedes, which saved the team $9 million for luxury-tax purposes, the acquisitions of starting pitchers Justin Masterson, Wade Miley and Rick Porcello add about $17 million to Boston’s payroll for this season.
Masterson signed a one-year, $9.5-million contract, while MLBTradeRumors.com projects Miley and Porcello to be paid $4.3 million and $12.2 million via arbitration next season, respectively. The acquisition of backup catcher Ryan Hanigan added another $3.5 million to the team’s commitments for luxury-tax purposes, and Breslow agreed to a $2-million deal last week.
Should the Red Sox add to their roster any further, perhaps by signing or trading for an ace like Cole Hamels or James Shields, they would pay an additional 17.5 percent in tax on any overage. Conversely, if Boston were to trade away Allen Craig or Shane Victorino, they’d have a chance to get back under $189 million.
Under the Henry ownership, Boston has never shied away from crossing the luxury-tax threshold — and even doing so several years in a row. But the penalties escalate with each successive year that a team does so, climbing from 17.5 percent the first year to 30 percent the second year and 40 percent the third, and so Henry has said he’d prefer to exceed the tax threshold strategically rather than consistently.
The good news for Henry and the Red Sox is that they will have a clear opportunity to get back under the threshold next season, avoiding the escalating penalties. As it stands now, the team has only $112.25 million in guaranteed money on its books for 2016, including the $12 million in player benefits included in the equation.
Breslow, Masterson, Porcello, Victorino, Mike Napoli ($16 million) and Edward Mujica ($4.75 million) all will be free agents after next season. The Red Sox hold a $13-million option on Buchholz but can decline it at a cost of just $250,000. Miley would remain under team control and be in line for a raise, but, as an arbitration-eligible player, his contracts are not guaranteed for more than one year.
Even if one projects Buchholz and Miley to return, Boston’s projected payroll for 2016 climbs only to a little more than $130 million.
If the Red Sox do sign Shields or trade for Hamels, they’d wind up with a payroll north of $200 million this season. For that reason, the $22.5 million Hamels is owed in 2015 actually would cost the Red Sox $26.44 million unless they made other moves to get back under the tax threshold.
A season later, however, that same $22.5 million that Hamels is owed could fit comfortably into a payroll that would fall short of the luxury-tax threshold, avoiding penalties of 30 percent on any overage. The same would apply if Boston waited a year to pursue a free-agent ace like David Price or Jordan Zimmermann.
