Red Sox Would Be Foolish to Trade Key Players to Avoid Payroll Penalties
LAS VEGAS — Boston Red Sox owner John Henry called his 2018 world championship team the greatest example of team unity he had encountered. Is it worth tearing at that unity to avoid a $4 million tax increase and 10 utterly meaningless spots in the draft? Would you send Rick Porcello or Jackie Bradley Jr. packing for the sole purpose of tax savings? Of course not.
Porcello, Chris Sale and Xander Bogaerts are eligible for free agency after next season. J.D. Martinez could join them by opting out. Bradley and Mookie Betts are eligible for free agency the following year. A roster crunch is coming. But you should not believe one is here now for Boston that “forces” it to cut payroll to get under some onerous luxury tax threshold.
Here’s the back-of-the-envelope math. Based on a payroll of $238.4 million last year, the Red Sox paid $11.3 million in luxury taxes for exceeding three thresholds. The thresholds increase this year and, for Boston, so do the penalties.
Right now Boston has about a $235 million payroll. If the Red Sox sign a reliever such as Joe Kelly, their top priority, it will approach the top tax threshold of $246 million. Let’s say the Red Sox go slightly over the last threshold, as they did last year, when it was $237 million. Their tax bill would go up to about $15.15 million.
As another penalty for breaking the third threshold, they also would have their draft pick pushed back 10 slots, as will happen this year. Boston will move from 33rd to 43rd. What is the cost of that penalty? Virtually nothing.
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I compared the career WARs of all 33rd and 43rd draft picks in a 10-year window from 2003-12. The combined WAR for the guys picked at 33 was -1.5. For the guys picked at 43 it was 16.1. Nine of the 20 players picked in those spots never made the big leagues. So it’s very random.
If Boston truly is motivated to save money, it would trade Porcello. The Red Sox would save the $21 million they owe him (assuming they took only prospects in return) and accrue about $9 million in tax savings. But you’ve also lost your most durable pitcher.
Trading Bogaerts would save the approximate $12 million he might get in arbitration and another $5.4 million in tax savings. But you have no ready-made replacement for him at shortstop.
Trading Bradley would save the approximate $8 million he might get in arbitration and another $3.7 million in taxes. But now you are without one of the team’s greatest strengths, its line-to-line superb outfield defense.
“Listening” to calls on your players is one thing; happens all the time. Looking to move core pieces because of a tax system? Red Sox president Dave Dombrowski told the AP the team is “not driven by that fact, that approach.” He and Henry must know that would be a difficult message to send to your fans: that you are motivated by the tax threshold system. It’s even a more difficult message to send to your players, who just won you a world championship and all the goodwill that comes with it.
