While the Nationals have a history of putting some finishing touches on their roster in August (e.g. Marc Rzepczynski, Matt Thornton), a significant/expensive addition isn’t likely to be in the cards, reports Chelsea Janes of the Washington Post. Per Janes, the Nats have crossed over the luxury tax threshold for the first time in franchise history.
[Related: Washington Nationals depth chart and payroll outlook]
The Nationals opened the season with a payroll close to $170MM, though the luxury tax is calculated in terms of the average annual value of those contracts, so backloaded contracts like Stephen Strasburg ($15MM in 2017 but $25MM average annual value) count more toward the luxury tax. Additionally, the Nats took on the likes of Ryan Madson, Sean Doolittle, Howie Kendrick and Brandon Kintzler in July.
As Janes notes, the Nats will pay a 20 percent tax on their overage as a first-time offender. The exact figure of the Nats’ luxury tax payroll remains to be seen, but their overage will fall into the $0-20MM bracket, so it’s hardly dire from a purely financial standpoint. There are other factors worth noting as well, though.
Firstly, if the Nationals exceed the luxury tax for a second time in 2018 by a similar margin they’ll be taxed at a 30 percent rate instead of a 20 percent rate. Secondly, if the Nationals elect to pursue a free agent that has rejected a qualifying offer this offseason, they’ll now face a steeper penalty for signing him. The new collective bargaining agreement stipulated that luxury tax payers will forfeit their second- and fifth-highest selections in the following year’s draft and will also lost $1MM from their league-allotted international bonus pool.
The Nats are in the metaphorical “penalty box” when it comes to the international market anyhow, so the loss of pool money isn’t a significant hindrance, as they can’t sign any individual player for more than $300K anyhow. But, exceeding the luxury tax could make it a bit more costly in terms of draft compensation if the team wishes to pursue Greg Holland or Wade Davis in free agency — both of whom look like potential QO candidates.
The Nats do have the contracts of Kendrick, Kintzler, Jayson Werth, Joe Blanton, Oliver Perez, Stephen Drew, Chris Heisey, Adam Lind and Jose Lobaton coming off the books following the 2017 season. Werth alone will account for $18MM of luxury tax relief, and that group as a whole will bring more than $35MM of relief. With Anthony Rendon, Tanner Roark and Michael Taylor representing the only three players in line for arbitration raises, the Nats should be able to dip back under the threshold even with some offseason additions on the free-agent market this winter.
Good article Steve. Perhaps you may want to do similar articles on the potential ramifications being faced by other teams. We keep hearing how Boston is getting under the tax this year and the Yankees next season.
Guess that possible article wouldn’t include Cleveland. They will never come close.
Unimportant grammatical error, but you used “anyhow” twice in the same sentence (first of the second to last paragraph).
Anyhow, how does using anyhow twice in a sentence matter anyhow?
Really?! That’s what u want to do with your time?!
Said it wasn’t important, but mentioned it anyhow. Legend.
You’re a grammatical error.
Anyhow….a great Tedeschi Trucks song…anyhow
Very underrated band!
I dig them.
So do the Nationals revisit trading for Hand in the off season or do they pursue holland or davis and lose draft compensation?
Doubt they do either honestly and just roll with doolittle and madson and hope for kelley solis glover etc to bounce back.
Or they pursue cheaper options again.
Next year is going to be (possibly) their last year with Harper so why not go for both? A bullpen of Davis, Hand, Doolittle, Madison, Glover would be amazing
Davis will be getting a Melancon-type contract. Hand will still have a high asking price. Hand is cheap salary-wise so adding him at the deadline would have been smarter move. Don’t see the Nats trading Keiboom for hand in the offseason if they wouldn’t do it now.
Spend that money, mortgage the future. Hopefully the Nats end their good run in a year or two just as Braves become ready to contend for a division title
Gotta hope the phils are there too. Looking better post all star break and some market correction in one run games should occur.
Probably a good reason they won’t extend Harper or resign him
For the 2018 season only Werth won’t be back. Gio has an option that will be picked up, and Weiters has an option that may or not get picked up, but due to the lack of catchers, I think it’ll probably get picked up. Everyone else is signed through until at least next season, albeit 1 year older (Zimmerman, Scherzer, another Strasburg injury, etc). After 2018 is when it craters with Harper & Murphy hitting free agency so I’d sign Davis and trade for Herrera or Hand.
Wieters option is a $10.5M players option. I’d expect him to exercise it as this season is unlikely to improve on the offers he received last offseason.