FORT MYERS, Fla. — After two seasons of ducking below the luxury-tax threshold, the Red Sox are once again primed to pay a payroll surcharge in hopes of building a contending team.
Once finalized, the six-year, $140 million agreement with shortstop-turned-second baseman Trevor Story will push the Red Sox’ projected 2022 payroll to approximately $236 million — north of the $230 million mark (the so-called first threshold) at which teams incur financial penalties.
If the Red Sox continue to add — perhaps with a fourth outfielder this spring or upgrades via trade during the season — that number could increase.
Regardless of other roster moves, the Sox (barring a trade) appear set to exceed the luxury-tax threshold for the first time since a $243.5 million payroll in 2019 resulted in a $13.4 million tax hit. Before the 2020 season, the Red Sox traded Mookie Betts and David Price to the Dodgers for Alex Verdugo and prospects, a move that got their payroll below that season’s $208 million line. Last season, they spent just under the $210 million luxury-tax line.
|Position||Player||Salary (AAV) in $M|
|Subsidy to LA||Price||16|
|Category||Total (in millions)|
|Starting position players||105.8|
|Minor league 40-man||2.5|
|Pre-arb player pool||1.7|
|$M over first threshold||6|
|$M under third threshold||34|
The projection of a payroll in excess of $230 million for 2022 is not fixed. The precise structure of Story’s contract could change his average annual value from the anticipated $23.3 million average.
Moreover, the salaries of several players who are either arbitration-eligible (Rafael Devers, Nick Pivetta, Josh Taylor, and Christian Arroyo) and pre-arbitration-eligible (Bobby Dalbec, Tanner Houck, and Garrett Whitlock, among others) have yet to be determined.
There are four luxury-tax thresholds, each coming with progressively higher tax rates. Teams that spend at least $40 million beyond the first threshold — meaning a $270 million payroll in 2022 — also incur a draft pick penalty, with their top selection getting bumped down 10 spots in the 2023 draft.
For now, the Sox are nowhere near that level. But after two seasons of roster moves that involved contortions to stay below the first tax threshold, they appear ready to operate with greater freedom as they try to forge a path to the 2022 postseason.
The Red Sox have spent beyond the tax threshold in 10 of the 19 seasons since its introduction in roughly its current form for the 2003 season.
Alex Speier can be reached at email@example.com. Follow him on Twitter at @alexspeier.