View Full Version : Payroll Impact of 2016 Offseason Transactions

12-02-2015, 01:11 PM
In the Price signing thread, -Lav- asked the question, "Can we afford to do anything else?". From a luxury tax perspective the answer seems to be an emphatic "No!" It will take a pretty dramatic shift in direction from an ownership team that made very public pronouncements about their commitment to playing by the luxury tax rules for them to sustain the current state of the roster.

2015-16 Offseason Transactions
Craig Kimbrel for prospects
Chris Young, $13M/2yr
David Price, $217M/7yr
Junichi Tazawa, $3.3M/1yr (projected)
Joe Kelly, $3.2M/1yr (projected)
Robbie Ross, $1.1M/1yr (projected)

Luxury Tax Payroll: $214.3M

2016-17 Offseason
Expiring Contracts: $28M (Ortiz, Tazawa, Uehara)
Contract Options: $16M (Buchholz, Hannigan)
Arbitration eligible: Bogaerts, Bradley, Holt, Kelly, Ross, Workman
Luxury Tax Payroll (includes options, excludes arb): $177.9M

2017-18 Offseason
Expiring Contracts: $6.5M (Young)
Contract Options: $25M (Kimbrel, Miley)
Arbitration eligible: Betts, Bogaerts, Bradley, Holt, Kelly, Ross, Workman
Luxury Tax Payroll (includes options, excludes arb): $162.2M

Potential Impact:

Ryan Hanigan does not stay with the team beyond the ASG. He gets dealt whenever the Sox are comfortable with Vazquez's recovery, quite possibly as soon as ST.
Wade Miley looks like a stronger trade candidate. His salary is not exorbitant but the potential to shave $10M off the payroll this year and next (when combined with Vazquez) makes a lot of sense. Kelly can fit as either a SP or RP depending on what they want to do with Owens/Johnson.
Castillo finds a new home by Opening Day 2017. His uninspiring results will make it more difficult but moving some or all of his $10M/yr deal makes sense with Benintendi flying up the system.
Buchholz has his option picked up next year but gets traded during the offseason. This is the move that many wanted this year but there is too much uncertainty in the rotation. In a year's time E-Rod takes a step forward and makes it clear that he can adequately replace Clay. The peak might not be as high but he'll make all his starts.
Xander does not get his payday this offseason. Or next. Without a significant move it seems very unlikely that the Sox will be able to pull together a package that Boras would advise him to sign AND allows them to make future moves. (FWIW, Boras pointed to Andrus' $120M/8yr deal as a starting point).
Mookie Betts, however, could get an offer next year. Just a hunch that they'll work hard to get at least one of the guys signed and Betts looks to be the more amenable of the pair.

I also think that it makes more sense to deal Hanley now, even if we pay 50-60% of his contract. Yes, they'd be selling low. Yes, he could come back to hurt us (since he needs to go to a team in the AL). Yes, they need to do it anyway. There is simply too much money locked up in his deal for it to ever work out for the Sox. Even if he begins to hit, his likely transition to DH after Ortiz leaves would make him extraordinarily overpaid as a bat-only guy.

That would represent quite a bloodletting from the prior regime. The return would be a tremendous amount of financial flexibility for the roster. Assuming the Sox paid $12M/yr for Hanley and $5M/yr for Castillo, they would shed an additional $28M bringing their future payroll projections for 2017 and 2018 down to $150M and $135M respectively.

12-03-2015, 04:40 PM
Crazy. Alex Speier published a very similar breakdown of salaries. The main difference was that he assumed that options would not be picked up while pointing out that the Sox have $22M in guaranteed contracts coming off the books each year over the next several years. He then offers this comparison:

In some ways, the three-time champion Giants offer an illustration of the sort of risk the Red Sox believe theyíre capable of assuming. San Francisco signed Barry Zito to a then-record seven-year, $126 million deal after the 2006 season. Though the lefthander stayed relatively healthy for almost the entirety of the deal, his production proved disappointing (he never posted a sub-4.00 ERA, and delivered a below-average 4.62 ERA through the life of the deal) and he was a marginal contributor to the championship teams.

Yet the fact remains: Zito was part of championship teams in 2010 and 2012. His contract didnít crush the teamís roster because San Francisco received incredible, and cost-effective, production from homegrown players like Buster Posey and Madison Bumgarner and Tim Lincecum and Matt Cain and Brandon Crawford and Joe Panik.

Those same homegrown players permitted San Francisco to win another title in 2014 while withstanding the poor health and limited production of Cain after 2012, amidst a six-year, $127.5 million extension.

In other words, big-dollar busts need not decimate rosters if they occur on teams that feature a loaded homegrown talent base. That prospect, in turn, left the Red Sox emboldened to assume greater risk with a contract like Price than would have been the case if their organization didnít feature such a talent base.