As we kick off the seventh installment of this series, here are links to the previous team payroll projections:
Philadelphia Phillies
Los Angeles Dodgers
Los Angeles Angels
Atlanta Braves
New York Yankees
Chicago White Sox
If you have questions about financial information made available to the public and the assumptions used in this series, please refer to the Phillies piece linked above.
Today, we visit with the other Sox and reigning champions: the Boston Red Sox.
Team Leadership
The most recent significant ownership change for the Red Sox saw John Henry, Tom Werner, and the New York Times (yes, that New York Times) purchase the club from the JRY Trust, established following the 1992 death of team owner Jean Yawkey, the widow of Tom Yawkey. The Times sold its interest in two separate sales in 2011 and 2012, leaving Henry and Werner as the primary owners and Henry alone as the face of ownership.
The baseball operations department underwent a massive shakeup late in the 2015 season with longtime contender builder Dave Dombrowski joining the fold as President of Baseball Operations with former general manager Ben Cherington stepping aside in a corresponding move. Dombrowski had previously assembled pennant winners in Miami (1997) and Detroit (2006, 2012) before his arrival in Beantown. Over his three seasons, the Red Sox have averaged 98 wins per year, recording at least 93 victories each season.
Historical Payrolls
Before hitting the numbers, please recall that we use data from Cot’s Baseball Contracts, we’ll use average annual value (“AAV”) on historical deals but actual cash for 2019 and beyond, and deferrals will be reflected where appropriate. And, of course, the value of examining historical payrolls is twofold: they show us either what type of payroll a team’s market can support or how significantly a given ownership group is willing to spend. In the most useful cases, they show us both. We’ll focus on a 15-year span for the Red Sox, covering 2005-18 for historical data as a means to understanding year 15: 2019. We’ll also use Opening Day payrolls as those better approximate expected spending by ownership.
As a major franchise playing in a major city, it comes as no surprise that the Red Sox have spent and spent big year after year.
While Red Sox spending has always been significant, it took a notable jump following the only Yankees World Series win of the past 15 years as the 2010 Boston payroll increased a little over 38 percent from 2009. Since then, the Red Sox have remained near the top echelon of spenders.
That changed in 2018 as Boston blew away the competition financially, finishing the year as the only American League team to pay the luxury tax. The Red Sox made approximately $22 million in luxury tax payments from 2005-17, but they pushed the envelope in 2018, incurring a tax bill of at least $12.7 million and possibly more depending on the final calculation.
International spending has also been a hallmark of the franchise, as was blowing past slot recommendations for draft picks prior to the new rules that severely disincentivized the action. The Red Sox were responsible for arguably the most famous example of overspending international bonus pools under the previous system, throwing a $31.5 million bonus to Yoan Moncada, complete with a corresponding $31.5 million tax payment in February 2015.
The Red Sox also allocated a massive sum to the posting fee paid of $51,111,111.11 to the Seibu Lions in advance of the 2007 season for the rights to negotiate with starting pitcher Daisuke Matsuzaka.
Needless to say, Major League payroll has comprised only a significant portion of team spending, hardly the entirety of it.
Future Liabilities
Unlike some other teams in this series to date, the Red Sox have significant present and future guaranteed liabilities. Here are the guaranteed future dollars with club options highlighted in peach and the opt-out clause for J.D. Martinez that follows the 2019 season shown in light blue.
There is a lot to digest here.
The remaining four years and $127 million owed to David Price naturally jumps out. After a strong debut season, Price hasn’t delivered the ace-level production that the team hoped for when they signed him, but Red Sox fans enjoyed watching Price hoist the World Series trophy this fall after 26 solid postseason innings. He’s hardly an albatross, even if his contract doesn’t offer value at this point.
After a superstar offensive season, Martinez’s contract appears increasingly likely to be a two-year, $50 million deal instead of a five-year, $110 million pact as was guaranteed. If his 2019 is half as successful as his 2018, Martinez will opt out of the deal and pocket the $2.5 million buyout that comes along with the decision to do so. In the meantime, he’ll serve as an essential middle-of-the-order bat for the defending champions.
The remaining multi-year commitments go to players unlikely to help the next championship team in Boston. Pedroia has been a mainstay, but knee injuries may very well render him unable to return to form especially at 35. 2017 indicated that Vazquez had emerged as a defensive force with a palatable, if below average, offensive game at 27. 2018 indicated that 2017 was a mirage. It remains to be seen what value, if any, Boston will milk out of the remainder of Vazquez’s deal.
The remaining current players are all on one-year deals and they all figure to play a starting-level role for the team in 2018. Sale is a perennial Cy Young contender heading toward a record-breaking contract, Porcello won the award himself in 2016, and Moreland, Pearce, and Nunez all figure to get north of 400 plate appearances next year. The club features a ton of walk-year talent.
Of course, the future commitments to players aren’t limited to current Red Sox players by a long stretch. The team owes a staggering $47.5 million to released free agent flop Sandoval and Triple-A 30-year-old Castillo. Perhaps the club will find a taker for Castillo if he comes along with approximately $22 million, though it’s worth noting that he does not count against the Red Sox luxury tax payroll as long as he remains off of the team’s 40-man roster.
Finally, former stars Ramirez and Pedroia will receive just over $34 million between them into the middle of the next decade, a sum that is not insignificant but also doesn’t figure to move the needle much for the deep pockets in Boston. Those amounts have already been accounted for in regards to the luxury tax, so they won’t hurt Boston when making that calculation.
While the guarantees feature plenty of star power, there is no shortage of elite talent to be found among the arbitration eligible Red Sox. Here are their arbitration projections (salary projections by MLBTR and Matt Swartz):
Betts, Bogaerts, and Bradley have long formed a young core for the club. Bradley’s bat has been below average the last two seasons, but Betts and Bogaerts have both regularly combined strong offense and defense to be impact players. With two years of control remaining on Betts and Bradley and one on Bogaerts, the team will likely continue extension talks. Obviously they have not found common ground to date, and it’s not known whether the Red Sox will succeed in locking down any of the three.
Rodriguez has grown into an above-average starting pitcher, albeit one who routinely misses time with injury issues. He figures to hold a rotation job through the coming years.
The remaining arbitration eligible Red Sox primarily serve to complement the bevy of ultra-talented players listed above.
What Does Team Leadership Have to Say?
Perhaps unsurprisingly, not much to date. They’ve been busy winning the World Series and celebrating their newest championship. The most noteworthy disclosure came from Henry following the season when he noted that the team won’t push their payroll to the top luxury tax penalties every season, calling out 2018 as an exception where adding the missing piece was worth the extra expenditure.
Are the Red Sox a Player for Bryce Harper or Manny Machado?
Well this is a tricky one. The Red Sox are obviously massive spenders who routinely find themselves with one of the top five payrolls in the game. Generally speaking, that is expected to be a prerequisite for entering the fray for Harper and/or Machado.
However, Boston has already committed major dollars to its championship core — a core that will only get more expensive in the next two years — and it would seemingly require major roster reconstruction to fit either young star into their group. In the case of Machado, there would also have to be a resolution of the conflict dating back to his April 2017 takeout slide of Pedroia.
Then again, it’s the Boston Red Sox. They shouldn’t be fully counted out for any big-time talent.
In the end, I’ll say that they’re not players for Harper or Machado. It’s too tough to see the math work from my vantage point.
What Will the 2019 Payroll Be?
More than for any other team that we have examined to date, the luxury tax is going to be a major factor for the Red Sox this winter. If the team makes no additional moves, they’ll have a cash payroll of $214.2 million and a luxury tax payroll of $216.0 million, assuming that Castillo remains off of the 40-man roster and, thus, doesn’t count against their tax payroll. With the luxury tax line sitting at $206 million, it’s awfully difficult to see how Boston gets under the line without sacrificing a key contributor or two. That’s no way to defend a title.
Instead, I suspect that the Red Sox will try to minimize their tax bill and ensure that they avoid hitting the $246 million threshold at which point their top draft pick is dropped 10 spots. It seems overwhelmingly likely that they will incur the 12 percent surtax for exceeding $226 million in luxury tax payroll, but, again, I expect that they will avoid the 42.5 percent surtax for exceeding $246 million in luxury tax payroll.
Provided that they plan to leave a little space for in-season acquisitions, let’s peg them at a spending level that enables the club to replace Craig Kimbrel at the back of the bullpen without breaking the bank.
Projected 2019 Payroll: $230 million cash ($232 million luxury tax)
Projected 2019 Payroll Space: $15.8 million
Sale, Porcello, Bogaerts expire 2019 and potentially JDM. Kimbrel, Kelley, Eovaldi contracts already expired, and Mookie is in his second-to-last year. Payroll almost 246M.
DD has to be creative.
I’d take the over, signing Eovaldi for something like $15M/year for 3 or 4 years and one reliever not named Kimbrel who could compete with Barnes and Brasier for the 8th and 9th innings. That would leave them in the high $230s and some room for a late July pickup or two without going over the $246M mark.
Yep, DD will have to be creative…….
Yep, they have to bump up against the Tax…..
Yep, they’ll get it done. They have a commitment to winning that strips other teams. Doesn’t mean they WILL win; the game’s too accidental. But they’ll be trying.
Does Pablo’s salary count against the cap seeing how he is not on the Red Sox 40-man roster like Castillo?
The loophole of outrighting players to circumvent the tax was closed in the new CBA. But even if the loophole was still open, it wouldn’t have applied to Sandoval. But yes it counts is the answer.
1. The Castillo signing might in my opinion be one of the worst in major league history. Maybe not in total dollars, but just the sheer fact that is was a full $72.5M wasted (was it slightly more actually – wasn’t there a fee in addition?). Not even from day 1 did it make sense. The guy never played baseball in his life (he didn’t although he pretended too). The Sandoval signing does rival for worst ever. Most of these awful signing were limited to a window of between 2010 and 2015. The Red Sox had something very weird going in their FO during that time period and one day, I would love to read a full article about the dysfunction over those years. I mean come on, Bobby Valentine?
It is peculiar that the Red Sox hold maybe the top 5 worst signings ever. And I’m not just spitballing that either. But that’s a conversation for another day.
2. I predicted early on that Machado would wind up with the Red Sox and I’m still convinced that could happen. We’ll see, but it makes a lot sense for a variety of reasons.
1) That’s why they fired Cherington.
2) no way the Red Sox Machado. 0% chance. Sox go for high-quality character guys most of the time. They have a good Clubhouse. Don’t talk about Manny Ramirez they signed him in 2001. I’m speaking about this regime.
I don’t think the Yankees sign Machado either. He’s more like a Phillies Orioles Mets Cardinals Giants guy…. maybe Dodgers.
1) Cherrington was the fall-guy for Lucchino’s shenanigans during that period. Cherrington was let go even though he did manage to hold onto a lot of top Sox prospects and Luchinno got a golden parachute and was banished to Pawtucket.
2) Agree. Don’t see the Red Sox signing Machado because that would require Dombrowski to get more creative than just opening an owner’s checkbook. However, I do see Cashman getting creative once again and swooping in at the last min to sign Machado.
Lucchino was always made out to be some kind of boogeyman who took the blame for everything that went wrong. Let’s be honest here: Cherington was absolutely awful. He got it all right in 2013 and then his luck ran out immediately after that. Hanley, Panda and Castillo were all horrendous moves that bloated the payroll for years to come. I’m not blaming Luchhino for any of those failures. The one where we probably CAN blame Luchhino a bit is the lowball offer to Lester. That was another huge failure and Cherinton’s hands were basically tied on that one.
Don’t get me wrong…loved Lester. But the chicken/beer escapades with Lackey too reminiscent of the Bonilla/Henderson card game DURING game 6 of the ’99 NLCS.
Send people packing even if you low ball them.
Luchhino has always had strong ties to the Marketing/PR depts in all the FO’s he worked, so when the ratings at NESN we’re down and surveys were circulated around the FO, he was the one who wanted to bring in the gimmicky Panda to get more women and kids to watch the Sox.
Rusney Castillo has been very good two years in a row in AAA. He’s old for the level, obviously, but he would be on a major-league team were it not for the contract.
Did you forget about Pavano? Scaled to today’s standards he was pretty bad. Kei Igawa was awful. Even Alex Rodriguez’s last contract can go in that bunch considering he missed a ton of time between injuries and such. Then there’s Ryan Howard. Mike Hampton. Vernon Wells. David Wright. There’s a lot of bad contracts all around baseball. The biggest spenders tend to have the worst contracts. That’s just common sense.
Miguel Cabrera probably has the worst contract in MLB at this point. The Tigers owe him 5 more years at $162m and he’s already washed-up!
Pujols’s contract is awful, too, of course. That one was doomed from the beginning.
Rusney and Panda are uniquely awful contracts, though. Rusney because they have to keep him in AAA no matter what he does and Panda because he was cut after 1 season. It’s hard to do much worse than those 2 moves.
That’s not a conversation for another day. If you think Boston has “maybe the top 5 worst signings ever”, your bias is showing, period, end of story.
These articles are interesting but it doesn’t mean much unless you understand what the teams gross revenue is for the prior-year and projected for upcoming years. I would estimate that team payrolls (including front office) are about 50% of the clubs gross revenue…give or taken some percentage points.
The Yankees had a gross of 692M in 2017
…and a final payroll of $224M..so, roughly 32% …but they are generally the exception, not the rule and that’s also why they pay millions in revenue sharing. I’m guessing most teams in markets like Boston, Chicago, LA, Houston, and others probably have team payrolls around 50% of gross revenue. That said, a teams decision to sign a high dollar free agent may have more to do with overall gross revenue than with team payrolls. That aspect is not covered in this article.
If you’re using actual cash instead of AAV to estimate the 2019 payroll, then that’s not the “luxury tax payroll”.
Cot’s baseball uses AAV (which is correct), and puts their 2019 CBT payroll at $224.5M. They also estimate $4.5M higher arbitration costs than you. That part is debatable, but even if we use your arb estimates instead of theirs, the CBT payroll is $220M right now.
$10M is not enough to do anything impactful with this winter. If they intend to cap themselves at $320M, then their best bet is to take that $10M, and place it under the biggest matress they own, until the summer. In the summer, $10M goes a long way, because you only have to pay 2 months’ salary. You can get the best closer on the market, plus a decent position player, to cover a potential injury.
To your point, yes and many on here have discussed this already. The Red Sox are at a major crossroads having just won a great WS. They have zero roster flexibility, a tremendous amount of financial obligations and I don’t think they even have $10M to spend. I mean they can spend whatever they want, but it wouldn’t be prudent. Like I said a couple weeks ago, they would be justified retooling a bit themselves. Might be a hard sell following a WS win, but it is what would be best for the team long-term.
Retool? Are you kidding me? They just won the World Series and have practically everyone back.
That’s not how you play with the big boys.
Yes you manager payroll but you let a guy like Kimbrel walk. Retool LOL.
The Giants should retool. The Mets should retool.
Any team Dombrowski is attached to it is gonna have a super high payroll.
Any team Dombrowski is attached to it is gonna have a super high winning percentage.
Not going to repeat, it’s the Yankees beginning of yet another dynasty in the making.
The Yankees are admittedly always very very good.
You don’t see them ever finishing last place two of the last 6 years.
I hate it there always awesome. I respected Joe Girardi quite a bit, but I understand 10 years run or whatever he did as a manager is all you can ask for. Then you got to change.
Fortunately my Sox have been pretty good the last couple years and I hope they stay that way. Three straight division titles not too shabby .
But yeah the Yankees are right there every time. Every time.
For me as I’ve commented previously I like the competition between the Yanks and Sox.
I am holding out hope that the Phillies can do the same things vs the Bravos and Mets.
Matt Klentak does not inspire confidence in the phans.
They have all those accomplishments the last 2 years of this dynasty. Division titles, pennants and World Series. Amazing run.
Did you copy and paste that comment from last winter when Boston wouldn’t repeat as AL East champs?
Sadly, there is little chance of repeat, and less chance of retaining the core in the near future. We were a long ball away from going to a decisive gm 5 against the Yankees and a possible disappointing fall…..just so close. But we won, so savor it. Mookie should be offered a long-term deal, JBJ is awesome defensively but his bat has been disappointing. I’d like to see improvement behind the plate instead of rotating the 3-headed monster, get a stable, steady catcher. 2nd is a long-term concern, even if Pedroia does return…how much longer? Is he a bad slide at 2nd away from his career ending? We need to look at the rebuilding the farm too, we could overtax our resources if we lose too many players. This is a huge year for Devers, sink or swim! Brasier has the stuff to be a closer if Kimbrel is too costly.
“The remaining current players are all on one-year deals and they all figure to play a starting-level role for the team in 2018.”
2019
Very thorough Rob. If the Sox find a taker for Castillo but have to pay down some of the cost, will that cost then count assuming he’s on the 40 man roster of that team? My biggest gripe with the story is Vasquez whose cost is not that substantial and he provided key ABs during the WS. The defense he and Leon have provided splitting time is worth the cost to me given the rest of the lineup. This would be a bigger issue if there was no DH.
Agree. I think 2019 will be closer to 2017 for Vazquez and thatll be fine with me. Hitting .250+ with enough bat control to hit and run and play plus defense seems like a better than average catcher in today’s game. Hope they do keep all 3 catchers. Swiharts flexibility makes it work and if he got more regular at bats i think he could break out offensively.
The Red Sox have a lot of resources but they are limited. One of the problems that the Red Sox have is so many really good young core players hitting free agency within a year or two of each other. They will not be able to keep them all.
DD lives and breathes this stuff and I trust he will figure it out and the Red Sox will remain competitive even after this year. DD got a bad rap in Detroit for burying the team in bad contracts but that was due to an aging owner that wanted to win the World Series before dying. He also was forced to trade his entire World Series team due to an owner in Florida.
He won’t have that problem in Boston as long current ownership is there. Now we will see what he does when he isn’t constrained by an owner to the extent he was before. I may be wrong but I like the Red Sox chances with DD at the helm with current ownership for years to come.
Manny Ramirez defered payments yrs 2019-2026 $2,008,397 19 $2,013,418 20 $2,018,452 21 $2,023,498 22 $2,028,557 23 $2,033,628 24 $2,038,712 25 $2,043,809 26
We probably should not sign anyone at the start of the season and see how we are at the trade deadline, but also we could go and try to trade with the mets or reds and get creative…Syndegaard or Votto could be obtainable…
When you have Moreland, Pearce and JD, there is no place for Votto. Besides, he’s a head case anyway.
with so many sources of revenue it’s crazy mngt doesn’t even blink at its dead money liabilities, equalling more than some small market payrolls
Everyone is worried about Betts. He’s a great player who lives on bat speed. Once he loses that he’ll just be a fast guy, which there are plenty of. His pop is solely on his ability to drive the bat through the zone at a high velocity. I love the guy, but I don’t see him as being a long time great. He’ll fade in like 5 years.
DD needs to figure out who will be our ‘core group’ going forward. Bogaerts, Benintendi, Betts, Martinez and Bradley will vary significantly in cost but should make up the core on the hitting side. Get the extensions done asap if possible.if not, determine who is expendable/replaceable for the amount you are willing to pay at the position. On the pitching side, Sale is the only guy that belongs in the core group. Eovaldi is interesting because another year of what he did this year and he would qualify to be a core guy too if we can get him back. That means set aside / plan for Betts at 35 to 40, JD at 30 or so, Bogey at 20 to 25, Benintendi at 20 to 25, and Bradley at 10 to 12. That totals $115 to $132. Plus Sale at $30 (if he really wants to stay). He’s not a greedy guy. So 145 to 162 plus Devers if he proves he can field, then add a 1B, 2B and catcher. Pearce and Moreland, an aging 2B who can still play like Peddy or Kinsler, EROD, and a bunch of hard throwing cheap relievers. That just leaves a closer and a 4/5 starter. Maybe by then some of our young guys in A ball will be ready to fill out the back half of the staff.
The future isn’t going to be cut short by all the Bs getting big paydays. It just means our chances of going under the luxury tax are slim to none.
I agree. Give the money to #1 Betts, #2 Benintendi, #3 Bogaerts (if Boras doesnt screw things up), #4 Bradley who shouldnt ever top $10M/yr unless he gets a consistent bat. Devers should step up and be the next big extension. Chavis or Dalbec beyond that. Starting pitching is overpaid today for what they give. Better off with 5 guys who can give you 6 solid innings at decent value since aces are almost nonexistent today. I wouldnt overpay for a starter or closer today. Skipping those contracts but signing the core they should means payroll drops and they are good for years.
Just out of curiosity, are these being done in a certain order? Seems like it has only been the big market clubs so far……