The Red Sox probably can’t afford to keep Martinez at his current salary unless they cut back elsewhere in ways that would hurt more in the long run. They might be able to squeeze him in if he weren’t quite so expensive.
Martinez isn’t opting out to take a discount but the Red Sox can get creative in ways that would satisfy him and reduce payroll. The logical path would be to tack on more years with salaries that continue to decline each season.
If Martinez doesn’t exercise any of his opt-outs, he’ll earn $62.45 million over the next three seasons. The luxury tax accounts for the average annual value of the entire contract, meaning he’ll count for about $22 million toward the tax in each of those seasons despite his salary declining in the final two years of the deal.
The Red Sox could negotiate a new five-year deal that would take Martinez through his age-36 season. The first three years would mirror his current agreement with his salary dropping to a more palatable figure around $16 million in 2023 and 2024 when there is a further risk of decline.
Let’s say his new contract would be a 5-year, $95 million deal. That’s an average annual value of just under $19 million, saving the Red Sox a few million per season for luxury tax purposes. Those savings may be enough to allow them to carve out the necessary space to stay under the tax in 2020 while affording both Martinez and Betts without giving up any essential pieces.
Would a 32-year old DH do better than $95 million on the open market? Can Martinez feel confident that anyone else would pay him $32+ million on a two-year deal when he’s 35? If he can’t be sure of the answer to either of those questions, his best bet is to take the renegotiated deal to remain in Boston.