Red Sox have more financial flexibility with Devers than they did with Betts
The Sox could’ve shelled out for Betts, kept exceeding the luxury tax, and really, done whatever they wanted to do. They’re one of baseball’s richest teams; Fenway Sports Group is approaching $10 billion in valuation. They could’ve done it. They probably should’ve.
But it would’ve cost them in several ways. Each consecutive year that a team exceeds the luxury tax threshold (CBT), the penalties become steeper. The first year, it’s a 20% tax on the amount of money spent over the threshold. In the second year, the charge rises to 30%, and 50% each year after. Teams that exceed the threshold also lose draft picks and international bonus pool money, and it affects Qualifying Offers.
With how decimated the farm system was at the time, paying Betts while being unable to rely on internal options would’ve ensured the Sox had to keep spending every year in order to plug the leaks in their roster. In trading him and David Price, they were able to unload some of Price’s record-breaking contract, affording them some breathing room. After paying overages in 2018 and 2019, they reset the tax in 2020.
Of course, the front office put the team in that tight financial situation with some reckless spending. When Betts turned down their initial extension offer following the 2018 season, former GM Dave Dombrowski gave out enormous extensions to Chris Sale and Nathan Eovaldi, instead. Sale’s extension has already proven to be one of the biggest mistakes in franchise history.
This year, the Sox are one of six franchises that have to pay the luxury tax. They’re a last-place team with the fifth-highest payroll in the game and the only one of the six with no shot at the postseason. However, at the moment, they have less than $50M in guaranteed money (excluding any club or player options) towards next year’s luxury tax payroll. They can easily ink Devers (and Xander Bogaerts) while building a better pitching staff, and they can do it all while resetting their luxury tax.