Debunking the 3 year window myth -- the Red Sox in 2020

[Bellhorn04]

It is because ownership did not WANT to pay the tax - which is their prerogative. But it is their CHOICE - because they want to take some profits ... which is fine. This is America, after all. By calling it a cap - you are buying into the idea that management's hands are tied by the rules, which of course is nonsense.

 

As a grownup who realizes that Sox fans pay the highest prices for just about everything (maybe behind Yankees fans in some areas - I am not looking this up), I have no problem questioning ownership's priorities if this is the case.

 

You're right that it's not a cap, but the escalating tax rates and penalties, some of which now affect the team's ability to acquire young talent, have made it extremely stupid to exceed certain thresholds.

[sk7326]

You're right that it's not a cap, but the escalating tax rates and penalties, some of which now affect the team's ability to acquire young talent, have made it extremely stupid to exceed certain thresholds.

 

I am not advocating for anything stupid baseball-wise. But for a team like Boston, it can be the cost of doing business. And - re-signing young stars is a good use of that money.

 

The draft deterrent is significant - although how significant is tricky - since if the team itself is not actually bad, the marginal impact is smallish. The main deterrent is financial ... and I am for the most part very skeptical of a high revenue team whining about this, especially when the team is an actual contender.

[moonslav59]

I am not advocating for anything stupid baseball-wise. But for a team like Boston, it can be the cost of doing business. And - re-signing young stars is a good use of that money.

 

The draft deterrent is significant - although how significant is tricky - since if the team itself is not actually bad, the marginal impact is smallish. The main deterrent is financial ... and I am for the most part very skeptical of a high revenue team whining about this, especially when the team is an actual contender.

 

The new CBA has taxes, extra surcharge taxes, and extra penalties.

 

The limit (not "cap") next year is $217M.

 

If a team goes over that limit, they pay a 12% tax plus a "luxury tax" of 20% year 1, 30% year 2 or 50% year 3 (consecutive). So, the tax is actually:

Year 1: 32%

Year 2: 42%

Year 3: 62%

That's on all money over the limit- not the whole budget.)

 

Next comes the "surcharge": if a team goes over the limit by $20M or more, there is an additional charge on that money only, of %42.5% year 1 and 45% year 2. It's possible to see a situation where a team pays over 80% or even 100% on certain moneys spent above certain limits.

 

These numbers are not something even filthy rich people shrug their shoulders at,

unless the team is just going over some of these limits by a tiny amount. A 107% tax on 2 million is not going to break a guy like Henry, of even scare him that much, but those dollars are above and beyond a massive amount of taxes already paid before reaching the maximum penalties.

 

Here's the scariest part: beginning in 2018, there will be an extra penalty for teams in that second category. A team that spends above $20M over the luxury limit, it will also have its top draft pick lowered ten spots, unless that pick is in the top six, in which case the team’s second pick will be lowered ten spots.

 

If the Sox move down from the 28th pick to the 38th, it won't kill us, but it could further affect our ability to rebuild for 2020 and beyond, which is what this thread is about.

[moonslav59]

My guess is, if we want to keep this current team mostly together and highly competitive, we will be going over the luxury tax in 2018, 2019 and 2020. We may be close to that $20M level of penalty by 2019 or 2020 due to heavy arb raises and trying to keep Kimbrel, Pom and Sale.

 

Can we sustain all these penalties? Sure, if Henry wishes to, but if we reach the secondary penalty levels, our already low draft picks could be even lower, and rebuilding becomes that much more difficult.

[sk7326]

The new CBA has taxes, extra surcharge taxes, and extra penalties.

 

The limit (not "cap") next year is $217M.

 

If a team goes over that limit, they pay a 12% tax plus a "luxury tax" of 20% year 1, 30% year 2 or 50% year 3 (consecutive). So, the tax is actually:

Year 1: 32%

Year 2: 42%

Year 3: 62%

That's on all money over the limit- not the whole budget.)

 

Next comes the "surcharge": if a team goes over the limit by $20M or more, there is an additional charge on that money only, of %42.5% year 1 and 45% year 2. It's possible to see a situation where a team pays over 80% or even 100% on certain moneys spent above certain limits.

 

These numbers are not something even filthy rich people shrug their shoulders at,

unless the team is just going over some of these limits by a tiny amount. A 107% tax on 2 million is not going to break a guy like Henry, of even scare him that much, but those dollars are above and beyond a massive amount of taxes already paid before reaching the maximum penalties.

 

Here's the scariest part: beginning in 2018, there will be an extra penalty for teams in that second category. A team that spends above $20M over the luxury limit, it will also have its top draft pick lowered ten spots, unless that pick is in the top six, in which case the team’s second pick will be lowered ten spots.

 

If the Sox move down from the 28th pick to the 38th, it won't kill us, but it could further affect our ability to rebuild for 2020 and beyond, which is what this thread is about.

 

I know the deterrents. The draft pick deterrent is small if the team is good. The difference between 28 and 38 is small. That the team has to make choices on players is self evident.

 

These decisions are ultimately business case ones - can the team carry lots of tax ... sure, if there is the requisite revenue bumps to go with it. Certainly the Red Sox marginal product per win is high ... certainly paying the tax to field a 75 win team is absurd. To field a 95 win one in a very high revenue market is a different deal.

[Bellhorn04]

I don't think we can complain too much about how much the Sox spend on payroll. You could almost say they're responsible about it.

[Spudboy]

I'm a paltry substitute for old Fred aren't I?

 

[Spudboy]

You should try demeaning everyone a little more and talking up your decades of scouting high school kids.

 

But is cp176 a Wop?

[Kimmi]

I don't think we can complain too much about how much the Sox spend on payroll. You could almost say they're responsible about it.

 

There really is no reason to complain about this ownership's willingness to spend money. They are even willing to go over the luxury tax and pay some penalty, just not the extreme penalty that would be incurred by not resetting or by going over by large amounts.

 

I think that expecting them to spend without limit is unreasonable and unrealistic.

[moonslav59]

Henry's willingness to spend big has been a significant factor in our success. I'll never second guess his spending philosophy. We've been over or near the luxury tax every year he's been at the helm.

 

I do think he cares about our spending, even if it just for image sake. He probably doesn't want to be viewed as a winner just because he could out spend everyone else. It' likely more fulfilling to win as the 3rd to 6th highest paid team, but I'm just projecting my thought here.

 

The history is that we stay near the limit and have some sort of priority to avoid paying high luxury taxes. We finished in last place in 3 out of 4 years. If spending was not a factor, we'd have signed more than just Price. I'm operating under the assumption that we will stay near the limit, until I see otherwise.

 

I do think re-setting the tax this year will allow us to go over by a significant amount in 2018 and maybe even 2019, but I seriously doubt we go over the second penalty limit ($237M next year). I agree that going from the 28th to 38th pick is not a big factor, but that would be on top of a major tax once we reach the 50% level of taxation

 

I think we can field a very highly competitive team over the next two years by just going over the luxury tax limit by $19.9M and no more. Once we reach 2020, we'll likely be at the 50% tax bracket with some big financial decisions to be made. With a much more difficult system for rich teams to rebuild their farms, I'm guessing we hit some hard times by 2021. If Henry didn't go nutty after 3 last place finishes, I doubt he will after a nice 4 year stretch (2016-2019).

[mvp 78]

But is cp176 a Wop?

 

That's a deep cut!

[Nick]

I think we can field a very highly competitive team over the next two years by just going over the luxury tax limit by $19.9M and no more. Once we reach 2020, we'll likely be at the 50% tax bracket with some big financial decisions to be made. With a much more difficult system for rich teams to rebuild their farms, I'm guessing we hit some hard times by 2021. If Henry didn't go nutty after 3 last place finishes, I doubt he will after a nice 4 year stretch (2016-2019).

 

According to my numbers, we don't even have $20M, more like $15M.

[Spudboy]

That's a deep cut!

 

I am sure you understand the reference.

[Bellhorn04]

Henry's willingness to spend big has been a significant factor in our success. I'll never second guess his spending philosophy. We've been over or near the luxury tax every year he's been at the helm.

 

I do think he cares about our spending, even if it just for image sake. He probably doesn't want to be viewed as a winner just because he could out spend everyone else. It' likely more fulfilling to win as the 3rd to 6th highest paid team, but I'm just projecting my thought here.

 

I think that's a valid point. I think Henry is a little more proud and competitive as a baseball owner than he's given credit for, because he's the classic thin pale weird rich geek.

[sk7326]

There really is no reason to complain about this ownership's willingness to spend money. They are even willing to go over the luxury tax and pay some penalty, just not the extreme penalty that would be incurred by not resetting or by going over by large amounts.

 

I think that expecting them to spend without limit is unreasonable and unrealistic.

 

the strawman is strong in this one - so let me rephrase

 

The Red Sox have carried a large payroll - as they should. They have largely managed it well. Letting Betts walk at the age of 27 would not be a good use of payroll - and if you cite the tax as a reason not to make THAT decision, it is bad management. It is fair game for lots of other decisions. (8 figure closers, cough cough)

[Bellhorn04]

the strawman is strong in this one - so let me rephrase

 

The Red Sox have carried a large payroll - as they should. They have largely managed it well. Letting Betts walk at the age of 27 would not be a good use of payroll - and if you cite the tax as a reason not to make THAT decision, it is bad management. It is fair game for lots of other decisions. (8 figure closers, cough cough)

 

You make a good argument. Don't take away my Kimbrel though.

[cp176]

 

I liked that stuff back in the day. Even that one.

[cp176]

But is cp176 a Wop?

 

nope - all Scott

[moonslav59]

I think we can field a very highly competitive team over the next two years by just going over the luxury tax limit by $19.9M and no more. Once we reach 2020, we'll likely be at the 50% tax bracket with some big financial decisions to be made. With a much more difficult system for rich teams to rebuild their farms, I'm guessing we hit some hard times by 2021. If Henry didn't go nutty after 3 last place finishes, I doubt he will after a nice 4 year stretch (2016-2019).

 

According to my numbers, we don't even have $20M, more like $15M.

 

The new limit is $197M (up 8M), so add $19.9M and we're at just under $216M.

 

We lose

$6.5M Young

$5.5M Moreland

$2M Abad

$14M Total

 

That's about $30M from 2017 to 2018 before counting raises.

 

I know the arb raises and option upticks will eat a lot of space, but I think we'll have enough for one big signing. The problem is, I don't think we'll want to sign anyone for more than a year or two, so we may not get who we want or need.

Edited August 10, 2017 by moonslav59

[Fan_since_Boggs]

While I like the idea of signing Hosmer, I'm starting to think the organization might move in a different direction. (1) How will Pedroia's knee hold up long term and will he need to move to the DH spot in the near future? (2) Can Chavis play 1b or 2b full time or is he only a DH?

 

I could see Pedroia taking over the DH spot in 2019, with Chavis at 1b, but then who plays 2b? In this scenario, there is no room for Hosmer but there is a need for a full time starter at 2b.

 

If the Red Sox can develop Chavis into a second baseman, Pedroia takes over DH in 2019 and there is room for Hosmer. But can he play 2b?

 

I haven't paid attention to where Chavis is playing in the field--will need to look it up. But second base is a tough position to play well. If the Red Sox see Chavis as a future 1b, signing Hosmer wouldn't make sense especially if Pedroia's knee is going to be a problem moving forward.

 

The 2b free agent class (after the 2017 season) isn't overly impressive. The Red Sox should resign Nunez as he could get some work at 2b while Pedroia gets some work at the DH spot (to ease up on the knee). This would be a good scenario for the Red Sox as it would reduce Hanley's playing time and keep his option from vesting.

 

The other interesting question: could Chavis be ready to start at 1b as early as 2018 or will he need more time in the minors? The Red Sox could resign Moreland to a one year contract if they don't believe Chavis will be ready in 2018.

Edited August 10, 2017 by Fan_since_Boggs

[Nick]

The new limit is $197M (up 8M), so add $19.9M and we're at just under $216M.

 

We lose

$6.5M Young

$5.5M Moreland

$2M Abad

$14M Total

 

That's about $30M from 2017 to 2018 before counting raises.

 

I know the arb raises and option upticks will eat a lot of space, but I think we'll have enough for one big signing. The problem is, I don't think we'll want to sign anyone for more than a year or two, so we may not get who we want or need.

 

Our raises are going to be significant, starting with picking up Sale's option. Look at our arbitration eligible guys. This is right up your alley.

[moonslav59]

While I like the idea of signing Hosmer, I'm starting to think the organization might move in a different direction. (1) How will Pedroia's knee hold up long term and will he need to move to the DH spot in the near future? (2) Can Chavis play 1b or 2b full time or is he only a DH?

 

I could see Pedroia taking over the DH spot in 2019, with Chavis at 1b, but then who plays 2b? In this scenario, there is no room for Hosmer but there is a need for a full time starter at 2b.

 

If the Red Sox can develop Chavis into a second baseman, Pedroia takes over DH in 2019 and there is room for Hosmer. But can he play 2b?

 

I haven't paid attention to where Chavis is playing in the field--will need to look it up. But second base is a tough position to play well. If the Red Sox see Chavis as a future 1b, signing Hosmer wouldn't make sense especially if Pedroia's knee is going to be a problem moving forward.

 

The 2b free agent class (after the 2017 season) isn't overly impressive. The Red Sox should resign Nunez as he could get some work at 2b while Pedroia gets some work at the DH spot (to ease up on the knee). This would be a good scenario for the Red Sox as it would reduce Hanley's playing time and keep his option from vesting.

 

The other interesting question: could Chavis be ready to start at 1b as early as 2018 or will he need more time in the minors? The Red Sox could resign Moreland to a one year contract if they don't believe Chavis will be ready in 2018.

 

I doubt we count on Chavis to be the starting 1Bman in 2018.

 

Marco Hernandez might be an option for 2B. I doubt Chavis will be.

 

I see Chavis ending up at 1B, LF or DH.

[moonslav59]

Our raises are going to be significant, starting with picking up Sale's option. Look at our arbitration eligible guys. This is right up your alley.

 

We don't need to keep all of our arb players. We might sign Nunez and trade Holt. We might trade a RP'er.

 

I think there's a way to add a significant FA and stay below the $20M over limit.

[notin]

While I like the idea of signing Hosmer, I'm starting to think the organization might move in a different direction. (1) How will Pedroia's knee hold up long term and will he need to move to the DH spot in the near future? (2) Can Chavis play 1b or 2b full time or is he only a DH?

 

I could see Pedroia taking over the DH spot in 2019, with Chavis at 1b, but then who plays 2b? In this scenario, there is no room for Hosmer but there is a need for a full time starter at 2b.

 

If the Red Sox can develop Chavis into a second baseman, Pedroia takes over DH in 2019 and there is room for Hosmer. But can he play 2b?

 

I haven't paid attention to where Chavis is playing in the field--will need to look it up. But second base is a tough position to play well. If the Red Sox see Chavis as a future 1b, signing Hosmer wouldn't make sense especially if Pedroia's knee is going to be a problem moving forward.

 

The 2b free agent class (after the 2017 season) isn't overly impressive. The Red Sox should resign Nunez as he could get some work at 2b while Pedroia gets some work at the DH spot (to ease up on the knee). This would be a good scenario for the Red Sox as it would reduce Hanley's playing time and keep his option from vesting.

 

The other interesting question: could Chavis be ready to start at 1b as early as 2018 or will he need more time in the minors? The Red Sox could resign Moreland to a one year contract if they don't believe Chavis will be ready in 2018.

 

 

Chavis is probably trade bait at some point. He's good enough to net a useful piece but not good enough to replace the guy holding his position. ...

[mvp 78]

Chavis is probably trade bait at some point. He's good enough to net a useful piece but not good enough to replace the guy holding his position. ...

 

Hanley has a lengthy injury history. I bet Travis and Chavis both get a good opportunity next year.

[Nick]

We don't need to keep all of our arb players. We might sign Nunez and trade Holt. We might trade a RP'er.

 

I think there's a way to add a significant FA and stay below the $20M over limit.

 

I don't even have Holt in my calculation.

 

Big raises for Pomeranz, Xander, JBJ and Betts. Throw in Leon (arb 2), Vazquez (1st year arb), Kelly (3rd year arb)....they are beginning to add up.

 

I don't care that we go WAY OVER Tax plus $20M, I'm just being REALISTIC and playing the what if that's the magical number for Henry game.

 

HELL IF IT WAS UP TO ME, I'D TRADE FOR BOTH VOTTO AND STANTON, RESIGN NUNEZ AND EXTEND BETTS, JBJ AND XANDER.

 

I would love for Henry to say f*** IT, we're the Sox, our budget is $300M. If I had his money, that's what I would do.

Edited August 10, 2017 by Nick

[Spudboy]

Hanley has a lengthy injury history. I bet Travis and Chavis both get a good opportunity next year.

 

 

Or they could keep Moreland for cheap.

[Spudboy]

I don't even have Holt in my calculation.

 

Big raises for Pomeranz, Xander, JBJ and Betts. Throw in Leon (arb 2), Vazquez (1st year arb), Kelly (3rd year arb)....they are beginning to add up.

 

I don't care that we go WAY OVER Tax plus $20M, I'm just being REALISTIC and playing the what if that's the magical number for Henry game.

 

HELL IF IT WAS UP TO ME, I'D TRADE FOR BOTH VOTTO AND STANTON, RESIGN NUNEZ AND EXTEND BETTS, JBJ AND XANDER.

 

I would love for Henry to say f*** IT, we're the Sox, our budget is $300M. If I had his money, that's what I would do.

 

That would be fun.

[sk7326]

You make a good argument. Don't take away my Kimbrel though.

 

A forward looking idea could be to look into the trade market for Bogaerts THIS offseason ... he is a good player, possibly very good. I am bullish - but with his FA being a year before Betts and Bradley ... if you think you can staff SS adequately, and get a large haul back, I can understand that.

[mvp 78]

Or they could keep Moreland for cheap.

 

Ewwwwwww...