A Realistic View at 2022: Part III

[Hugh2]

I think it will be the 2024 reset.

 

I think that's easy from we want to win now fan mindset, but from the build, an organization from the bottom up, and it looks like they still might be one more year away it makes more sense to go all in after 2023. You'd have reset, and some of that minor league value should start blooming into MLB roles. You can also still make moves to be better in 2023.

 

I think they reset this upcoming year. I don't expect them to go over.

[mvp 78]

I think we can easily assume John Henry is going to mandate Bloom gets under the cap this year, and if he doesn’t he has to get under next year.

 

"You have one year to go for it all and then get under the cap again. Have at it."

[mvp 78]

I was having this discussion on another forum and my opinion was changed on the matter. The tax on the overage is only the overage. So the Sox can spend another 20 million up to the next threshold ($253 million) That's $20 million over the cap and since it's their second consecutive year over they will be taxed at 30% That's 6 million dollars. $6 million dollars isn't scaring off John Henry, what's scaring him off is losing out on the revenue sharing for staying 3 years over. If that was this year, he'd be losing out on $318 million dollars. Ok that's not coming this year but it's coming next year if they stay over.

 

$6 million is peanuts, hundreds of millions are not. So, the reality is the Sox are going to reset either this year or next, and if the reset doesn't come this season then I expect the team to be constructed in such a way that makes it easy to get back under next year. This is why they may not shy away from offering qualifying offers to both Eovaldi and Wacha, with the former possibly being more contingent on how healthy his arm looks.

 

The only deterrence aside from money is: Clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.

 

Is a 10 pick drop enough of a reason to get under the cap if you are fine with paying a penalty? I can see not wanting to lose a pick, but to just have the pick pushed back a few slots seems like not a big deal.

[Hugh2]

The only deterrence aside from money is: Clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.

 

Is a 10 pick drop enough of a reason to get under the cap if you are fine with paying a penalty? I can see not wanting to lose a pick, but to just have the pick pushed back a few slots seems like not a big deal.

 

I think it's a deterrent but not a strong one, this isn't the NFL, the difference between pick number 30 and 40 is pretty insignificant.

 

It's the revenue sharing that is going to cost the Sox. John Henry has to dish over 31% of his income to be pooled and dished back out. If he doesn't receive his portion of the revenue sharing then, for example, this year he lost $318,000,000 dollars. That's the big deterrent, there's no way the Sox stay over 3 years in a row. No way John Henry is leaving $318 million on the table. He's a businessman first. That's the real deterrent.

[moonslav59]

I think that's easy from we want to win now fan mindset, but from the build, an organization from the bottom up, and it looks like they still might be one more year away it makes more sense to go all in after 2023. You'd have reset, and some of that minor league value should start blooming into MLB roles. You can also still make moves to be better in 2023.

 

I think they reset this upcoming year. I don't expect them to go over.

 

I agree, but the native are getting restless.

 

This highlights, again, how dumb it was not to trade away enough salary at the deadline to sty under, this season.

[moonslav59]

I think it's a deterrent but not a strong one, this isn't the NFL, the difference between pick number 30 and 40 is pretty insignificant.

 

It's the revenue sharing that is going to cost the Sox. John Henry has to dish over 31% of his income to be pooled and dished back out. If he doesn't receive his portion of the revenue sharing then, for example, this year he lost $318,000,000 dollars. That's the big deterrent, there's no way the Sox stay over 3 years in a row. No way John Henry is leaving $318 million on the table. He's a businessman first. That's the real deterrent.

 

Are you sure that $318M number is right?

[Hugh2]

I agree, but the native are getting restless.

 

This highlights, again, how dumb it was not to trade away enough salary at the deadline to sty under, this season.

 

John Henry doesn't care how restless the natives are. Not when hundreds of millions of dollars are involved. If they think it's better to reset this year, they still have the resources to improve the team and that's the direction they will probably go. I could be wrong, but there's a strong chance they do here.

[moonslav59]

John Henry doesn't care how restless the natives are. Not when hundreds of millions of dollars are involved. If they think it's better to reset this year, they still have the resources to improve the team and that's the direction they will probably go. I could be wrong, but there's a strong chance they do here.

 

If it's $318M, then no way the fan unrest outweighs that, but they sure put out hints they will spend, this winter.

[Hugh2]

If it's $318M, then no way the fan unrest outweighs that, but they sure put out hints they will spend, this winter.

 

Well, that's what it would have been this year. If revenues go up next year...it will be even more money. Remember the MLB takes 31% of your revenue and divides it evenly, you don't get any of that money if you stay over the cap for three years.

 

Everything else is peanuts compared to that.

[Bellhorn04]

Well, that's what it would have been this year. If revenues go up next year...it will be even more money. Remember the MLB takes 31% of your revenue and divides it evenly, you don't get any of that money if you stay over the cap for three years.

 

Everything else is peanuts compared to that.

 

31% of "local net revenues", that is. Requires a bit of a dig to see how that's calculated, I think.

[moonslav59]

Well, that's what it would have been this year. If revenues go up next year...it will be even more money. Remember the MLB takes 31% of your revenue and divides it evenly, you don't get any of that money if you stay over the cap for three years.

 

Everything else is peanuts compared to that.

 

Okay, so that pretty much precludes a third year, IMO.

 

We should have stayed under, this year.

 

We can spend about $50M, this winter and stay under, counting ARBs. Maybe that is what they meant when they said, we'd spend on talent.

 

To me, it makes more sense to reset in '23, and then have 2 years of going over in '24 and '25, but maybe they choose to reset in 2024.

[Hugh2]

31% of "local net revenues", that is. Requires a bit of a dig to see how that's calculated, I think.

 

considering the Sox generate the 3rd largest revenue they're likely not getting back what they paid out. Still, we know the revenue per team to be $318 million. But I stand corrected, teams have to share 48% of their revenue. I highly doubt JH, or any sensible business owner would ever lose half his revenue and not get back $318 million.

[Hugh2]

Okay, so that pretty much precludes a third year, IMO.

 

We should have stayed under, this year.

 

We can spend about $50M, this winter and stay under, counting ARBs. Maybe that is what they meant when they said, we'd spend on talent.

 

To me, it makes more sense to reset in '23, and then have 2 years of going over in '24 and '25, but maybe they choose to reset in 2024.

 

That's pretty much my thoughts, I think they could reset after next year but I"m thinking they're going to reset this year.

[mvp 78]

That's pretty much my thoughts, I think they could reset after next year but I"m thinking they're going to reset this year.

 

The FA class this offseason is really bad. I can't see them going on a crazy spending spree.

[Hugh2]

The only deterrence aside from money is: Clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.

 

Is a 10 pick drop enough of a reason to get under the cap if you are fine with paying a penalty? I can see not wanting to lose a pick, but to just have the pick pushed back a few slots seems like not a big deal.

 

That would entail the Sox spending over $273, which they won’t. If they wanted to spend $272 they could easily sign Devers, Bogaerts, and go out and get Judge/Degrom.

 

 

Resetting in 2024 would be a tall task though. But the pick is nowhere near as big a deterrent as the money.

 

$318,000,000 is > moving back 10 slots.

[Hugh2]

The FA class this offseason is really bad. I can't see them going on a crazy spending spree.

 

Neither do I, which is why I see them getting creative with their cap space to bring in talent. Such as taking Payroll off Miamis books to bring in a starter, and the. They go big next year when you have to for Devers

[mvp 78]

Neither do I, which is why I see them getting creative with their cap space to bring in talent. Such as taking Payroll off Miamis books to bring in a starter, and the. They go big next year when you have to for Devers

 

I think it's a better bet to trade for young pitching than use FA money on old pitching anyway. Seems like a higher likelihood of working out.

[Hugh2]

I think it's a better bet to trade for young pitching than use FA money on old pitching anyway. Seems like a higher likelihood of working out.

 

This is true, but you could probably pry away one of Miami's arms for taking on Garcia or Soler and still end up paying 1/3 of what you would if you went out and bought a Degrome type...and you're getting a much younger commodity as well. Think of the JBJ trade where we effectively bought prospects to take on their payroll (JBJ) except here we would be taking back a MLB caliber arm instead. You might still have to still send a prospect, but if you're helping them shed payroll it's saving you someone from our top 5, maybe even top 10 from being included.

 

If someone like Soler can stay healthy, well now you have a better outfield too, which would just be a bonus. If he does bounce back he probably opts out his last year which may or may not net you a pick. (probably not).

[Hugh2]

That just seems like a Bloom type of move.

[Bellhorn04]

That would entail the Sox spending over $273, which they won’t. If they wanted to spend $272 they could easily sign Devers, Bogaerts, and go out and get Judge/Degrom.

 

 

Resetting in 2024 would be a tall task though. But the pick is nowhere near as big a deterrent as the money.

 

$318,000,000 is > moving back 10 slots.

 

That $318 million figure just doesn't seem right.

 

I remember Alex Speier had an article a few years back explaining about the revenue sharing penalty for going over the tax threshold 3 years in a row. It was a significant amount, but it was nothing like that.

[mvp 78]

That $318 million figure just doesn't seem right.

 

I remember Alex Speier had an article a few years back explaining about the revenue sharing penalty for going over the tax threshold 3 years in a row. It was a significant amount, but it was nothing like that.

 

Haven't the tax penalties changed in the new CBA tho?

[Hugh2]

That $318 million figure just doesn't seem right.

 

I remember Alex Speier had an article a few years back explaining about the revenue sharing penalty for going over the tax threshold 3 years in a row. It was a significant amount, but it was nothing like that.

 

$318 is the per team amount of total MLB revenue, which now that I think of it I'm not sure if that's total revenue or revenue sharing. I think it may be the former which should be easy to derive since MLB takes 48% of each team's revenue and divides it evenly. So the actual figure may be closer to $150 million. That still likely blows any chance of the Sox every staying over the cap for three consecutive seasons out of the water.

[moonslav59]

Neither do I, which is why I see them getting creative with their cap space to bring in talent. Such as taking Payroll off Miamis books to bring in a starter, and the. They go big next year when you have to for Devers

 

Maybe they make some trades and stay close, but under, the tax line in 2023. Get competitive, but also better set-up for a splurge sending winter before the 2024 season.

[Bellhorn04]

$318 is the per team amount of total MLB revenue, which now that I think of it I'm not sure if that's total revenue or revenue sharing. I think it may be the former which should be easy to derive since MLB takes 48% of each team's revenue and divides it evenly. So the actual figure may be closer to $150 million. That still likely blows any chance of the Sox every staying over the cap for three consecutive seasons out of the water.

 

I just read the article by Speier from back in Dec/19.

 

In the last CBA, and I suspect it's the same in the new one, teams that go over the tax threshold repeatedly do not forfeit their share of the revenue sharing pool.

 

What they might forfeit is their share of the “market disqualification refund”, which is a much smaller amount. Here is an excerpt from Speier's column:

 

■ REDUCED REVENUE SHARING REBATES: This is perhaps one of the most significant and least discussed or understood aspects of team decision-making.

 

Larger-market teams that repeatedly spend past the threshold would forfeit a “market disqualification refund” on potentially sizable revenue sharing rebates – something that is significant in the decision-making of teams that traditionally rank among the biggest spenders and drivers of free agent contracts.

 

The 2012-16 CBA first introduced the possibility of a revenue-sharing rebate for large-market teams that stayed below the threshold – but that was viewed as somewhat disappointing by the Yankees and Red Sox, the biggest revenue-sharing contributors.

 

For years, the A’s – despite residing in what MLB and the MLBPA characterize as one of the bigger markets in the game – had received massive revenue-sharing subsidies of tens of millions of dollars annually due to a dismal, revenue-starved stadium. But the 2017-21 CBA decided that after years of such subsidies, Oakland needed to start standing on its own financial feet, resulting in a phase-out of its eight-figure annual payout. In 2017, Oakland’s revenue-sharing allowance was reduced by 25 percent; in 2018, by 50 percent; in 2019, by 75 percent; next year, it will be phased out completely.

 

The money that had been earmarked for the A’s will go back to the other 12 teams located in above-average market sizes, with payouts proportionate to revenue-sharing contributions. The Red Sox are believed to be a top-three contributor to revenue sharing, and thus would be entitled to one of the biggest payouts.

 

But teams that spend past the threshold – even by $1 – for at least two straight years will forfeit some to all of that refund. A team that goes past the threshold two straight years (such as the 2018-19 Red Sox) loses 25 percent of its refund in the second year; that penalty increases to 50 percent when paying the luxury tax a third straight year, 75 percent in a fourth straight year, and 100 percent when going over the threshold in five straight seasons.

 

How big is the penalty? According to multiple major league sources, the Sox’s forfeiture of 25 percent of their 2019 revenue-sharing rebate will be in the low seven figures. If they reset their penalties by staying below the threshold in 2020, they’d ensure their full rebate next year and in 2021.

Consider two scenarios: In one, the Red Sox maintain a $243.5 million payroll in 2020, 2021, and 2022. In the other, the team spends $205 million in 2020 then returns to $243.5 million in 2021 and 2022.

 

Using a speculative low-seven figures rebate loss of $2.25 million for 2019, the Sox would lose $27 million in revenue sharing rebates over the next three years if they stay over the threshold. By getting under the threshold this year, they’d reduce that figure to $3 million.

[Hugh2]

Hold on so you’re saying you suspect what was in the old CBA is in the new? You may be right but that’s a horrible assumption to make. I think we need some clarification on this.

[Bellhorn04]

Hold on so you’re saying you suspect what was in the old CBA is in the new? You may be right but that’s a horrible assumption to make. I think we need some clarification on this.

 

I think it would have been publicized if a big change was made.

[Hugh2]

Is that the old CBA?

 

Is one of us going to have to read the whole damn new one lol? Wouldn’t mind doing it but I probably won’t get around to it for a while.

 

It could very well be true that they both still get a partial rebate and it’s an amount high enough to make Henry and most owners want to reset before 3 years.

[Hugh2]

I think it would have been publicized if a big change was made.

 

That’s a pretty big assumption, I’m unclear here but I know in other areas of revenues sharing changes were made. So I think we should get some accurately sourced information here to be certain

[harmony]

I think it would have been publicized if a big change was made.

https://theathletic.com/3187914/2022/03/16/mlbs-collective-bargaining-agreement-guide-to-the-changes-in-the-2022-26-labor-deal/?amp=1

[Hugh2]

So far I can’t find anything that even says the new CBA excludes repeat offenders from not receiving revenue sharing