When accounting for guaranteed contracts and raises for players under team control, the Boston Red Sox are nearing the luxury tax before free agency begins.
The Boston Red Sox made an obvious move official, picking up the 2018 team options for Chris Sale and Craig Kimbrel. Their combined salaries bring the team’s payroll for next season up to $114.5 million.
Before we get too excited about the room that leaves the Red Sox under the expected $197 million luxury tax threshold, we should note that the current payroll accounts for only six players. David Price ($30 million), Hanley Ramirez ($22 million), Rick Porcello ($21 million), Dustin Pedroia ($16 million), Kimbrel ($13 million) and Sale ($12.5 million) combine to make up that total, per Spotrac.com.
The Red Sox have 13 arbitration eligible players – Mookie Betts, Xander Bogaerts, Drew Pomeranz, Jackie Bradley, Joe Kelly, Tyler Thornburg, Brock Holt, Sandy Leon, Brandon Workman, Steven Wright, Eduardo Rodriguez, Christian Vazquez, and Carson Smith. If all of those players are brought back for next season it will add somewhere in the neighborhood of $50 million, according to the arbitration projections from MLB Trade Rumors.
Let’s conservatively say that these arbitration salaries bring the payroll to $165 million.
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Now we need to add the 13 pre-arbitration eligible players on the 40-man roster under Boston’s control – Andrew Benintendi, Matt Barnes, Heath Hembree, Marco Hernandez, Deven Marrero, Tzu-Wei Lin, Sam Travis, Blake Swihart, Noe Ramirez, Roenis Elias, Austin Maddox, Hector Velazquez, and Robby Scott. These players have very little leverage and are often paid the league minimum or slightly above. The league minimum for 2018 is $545,000.
Boston may be inclined to give a rising star like Benintendi a bit more in hopes of their generosity paying off down the line when it comes time to negotiate a more lucrative deal.
A conservative estimate of the salaries for these 13 players would combine to be about $7 million, bringing our overall total payroll to $172 million.
Wait, that’s not all. The Red Sox still owe Pablo Sandoval $18 million next year. He’s off the roster and now a problem for the San Francisco Giants to deal with, but Boston still has to pay him the remainder of his contract.
Which brings us to $190 million. That’s before factoring in insurance, travel expenses, medical bills and other expenses that also count toward the luxury tax. Add about a couple million bucks for that.
See how that payroll space disappears before you know it?
The Red Sox will enter free agency with a payroll that is already bordering the luxury tax line. The good news is that the team’s ownership has shown a willingness to exceed the threshold in the past and should be able to do so again after they ducked the tax in 2017 to reset the steep repeater penalties.
Boston can afford to make one big move in free agency or via trade. If they want one of the expensive free agent bats on the market, they can afford it without going $20 million over the tax threshold. If they want to add another lower cost move, such as re-signing Eduardo Nunez, they can do that too, so long as they are willing to pay a harsher tax penalty.
What they will not do is exceed the tax by over $40 million, which would result in the harshest penalty in terms of a tax bill and draft pick penalties.
All this is to put in perspective what we can expect the Red Sox to spend in free agency. The $114.5 million currently committed to the books for 2018 does not mean Dave Dombrowksi has free reign to chase every free agent. Boston isn’t bringing in Eric Hosmer to play first base, J.D. Martinez to DH and Yu Darvish to join the rotation. One of them, maybe. Not all of them.
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The Red Sox will explore all of those options and more. Given Dombrowski’s history of getting top targets at any cost, there’s a solid chance he comes away with someone that upgrades this team for next season.