Thursday, 3 December 2015

Red Sox payroll forecast helped grease wheels for Price deal

The Red Sox just received a $1.87 million tax bill from Major League Baseball after a payroll that weighed in at just under $200 million in 2015 (nearly $11 million over the $189 million luxury tax threshold) – which means that the team spent well over $200 million for a last-place finish.

The figure includes not only the tax, but also players like Allen Craig and Justin Masterson, who were paid handsomely after being designated for assignment.

For now, the team’s owners are responding with a willingness to spend even more aggressively on 2016, as evident by the acquisitions of David Price, Craig Kimbrel, and Chris Young – all of whom are being paid at or near the top of the heap for their positions (starter, closer, fourth outfielder).

Here’s my look at the 2016 payroll – which is currently positioned to barrel well beyond the 2015 expenditures – and the anticipated luxury tax penalties that the team is prepared to absorb.

While the team is spending aggressively on 2016, however, it’s worth noting that the emergence of a young core, in combination with a careful staggering of the team’s guaranteed long-term deals that will peel tens of millions off the books in each of the next five years, convinced the team that it could assume this sort of bold expenditure.

In each of the next four years, the Sox have at least $22 million in guaranteed salary coming off the books. Some of that paring will be offset by salary increases through arbitration and/or long-term contracts – particularly starting in 2018, when Xander Bogaerts might be reaching arbitration for a second time, or in 2019, when Bogaerts could be a third-time arbitration-eligible player, Mookie Betts could be a second-time arbitration-eligible player, and Blake Swihart and Eduardo Rodriguez could be reaching arbitration for the first time.

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