Are the Red Sox Being Penny Wise and Pound Foolish? Why?
By Bill Smith
In my previous incarnation as a lawyer, I was involved in a lawsuit against Exxon because the plaintiff was injured driving over a pothole on the premises of an Exxon service station. Case of the century, right? When the representative from Exxon was deposed, he said Exxon had not fixed the pothole because it couldn’t afford to. One of the largest and lucrative corporations in in the world, spending billions as chump change, pled poverty when asked to fix a $500.00 pothole. This was absurd of course, but the testimony of the representative tried to explain a very complicated accounting system with its regional allotments, there was no money to fix the pothole in this small Virginia town, when placed in the context of Exxon’s accounting system.
Are the Red Sox pleading poverty for the upcoming season because of it’s concern for the luxury payroll tax. This doesn’t fit with the previous, “we get what we want” attitude of years past. There is a new sheriff in town and apparent paradigm shift in upper management that the luxury tax is now an issue. From 2003 thru 2007, the Yankees, Red Sox and Angels (for 2003 only) were the only ones charged with this tax with the Yankees paying almost 10 times more than the second place Sox. The Sox paid nothing extra in 2008 and 2009, but paid about $1,500,000.00 in 2010. 2011 has yet to be determined. The rather complicated tax payment structure is set out in an excellent December 4, 201 article by Brian McPherson of the Providence Journal.
The threshold figure over which the luxury tax kicks in is $278,000,000.00 this year, as it was last. Because of prior overages, the Red Sox will have to pay 40% tax on the overage. The Sox got some relief for the coming year by dropping Jonathan Papelbon, David Ortiz, J.D. Drew, Tim Wakefield and the rest of our unsigned free agents. Ortiz will be resigned probably at around $12,000,000.00. you have Jacoby Ellsbury to factor in as well as some administrative costs and we are only $8,000,000.00 sh0rt of the luxury tax.
John Henry and Larry Lucchino have let it be known that they don’t want to pay much if any luxury tax. Quoting from Mr. McPherson in his Providence Journal article “Cherington has said on more than one occasion he expects the offseason to be more low-key than it was a year ago, that he expects to do more tinkering under the hood than buying fancy new parts.” With the palace revolution that took place during the Terry Francona replacement process, it is doubtful there will be any disagreements, at least publicly, on next year’s roster. Forget about the RoyOzwalts and and Mark Buehrles. Like Exxon, the Red Sox can’t afford them, These would require substantial loosening of purse strings which, from all indications, will not happen for the next season. It’s tough being in that 1%.
We need some new blood and it appears we won’t get it. I don’t think the lightfooted Bobby Valentine is a magician. He can’t turn Daniel Bard into Papelbon. He has to get somebody to catch the ball in right field, and a bunch more bodies. It will take more than “tinkering under the hood” to fix our mess. Is it possible Henry and Lucchino are keeping the payroll down to make the team more attractive to potential buyers? Something’s up. (Cue up Carly Simon singing Anticipation).
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