The Red Sox’ offseason to-do list has gotten longer. Tuesday’s revelation that Trevor Story underwent internal brace surgery to repair his right ulnar collateral ligament — a procedure with a six- to nine-month recovery — leaves them in need of multiple up-the-middle players to complement Kiké Hernández.
Even before Story’s surgery, the Sox clearly recognized that their winter shopping had not concluded, and they’d taken pains to preserve spending power for the coming year with the way they structured the contracts of Justin Turner and Rafael Devers.
Turner is guaranteed $15 million for the 2023 season, while Devers is going to be paid $331 million over the next 11 years. In theory, the Sox could have reached a one-year, $15 million accord with Turner while doing a straightforward 11-year deal with Devers, which would have resulted in the two counting for roughly $45.1 million for luxury-tax purposes this year.
Had the Sox done that, their commitments (as calculated for luxury-tax purposes) would be at roughly $220 million-$225 million for 2023. That would leave little room left to maneuver while staying under the $233 million tax threshold set for 2023 in the collective bargaining agreement between Major League Baseball and the MLB Players Association.
(Disclaimer: The threshold is not a cap, and it’s up to the team to set its budget, but it looks like the Sox are likely to avoid paying the competitive-balance tax in the coming season. That could change if they take on significant salary via trades either before or during the year, but the Sox appear likely to enter the season a bit under the line, after they opened — and stayed — just above it in 2022.
The Sox have spent past the tax threshold in 11 of the last 20 years. In that time, they have exceeded it two years in a row but not three, given the escalating penalties. They were one of six teams to spend past it in 2022, carrying a payroll of about $234.5 million, with the threshold at $230 million. According to Fangraphs, six teams — the Mets, Yankees, Padres, Phillies, Blue Jays, and Braves — project to exceed the threshold in 2023.)
The Sox worked out the Turner and Devers deals so that they will represent a combined tax payroll hit of $28.35 million — keeping roughly $15 million-$20 million available to spend on additional players.
Turner is guaranteed $15 million for 2023, but the Sox structured his deal so that it will count for only $10.85 million for tax purposes. He will make an $8.3 million salary, with a $13.4 million player option. However, if he declines the option, the Sox will be on the hook for a $6.7 million buyout — half of his 2024 salary.
That figure is no accident. If a player has a buyout of no more than 50 percent of his salary, then his player option year is treated as guaranteed, which changes how it’s calculated for luxury-tax purposes. Even though he is assured of earning at least $15 million, Turner’s contract is treated by MLB as a two-year, $21.7 million deal, with an average annual value of $10.85 million.
If he exercises his player option, Turner again will count for an AAV of $10.85 million in 2024. If the designated hitter/corner infielder declines, then the $4.15 million difference between what he earns ($15 million between his 2023 salary and the buyout of his 2024 season) and his 2023 luxury-tax figure ($10.85 million) will get tacked onto the Sox’ 2024 payroll.
As for Devers, the fact that the Sox announced a one-year agreement for the 2023 season at $17.5 million last Monday (a day before news broke of his long-term agreement) was not coincidental.
The Sox then signed the third baseman to a 10-year, $313.5 million deal that takes effect in 2024, allowing them to keep his luxury-tax figure at $17.5 million in 2023 before it jumps from 2024-33. (Because the 10-year deal includes deferrals, its AAV is calculated at just over $29 million per season.)
Had the Sox simply signed Devers for 11 years, his salary would have been calculated at $30.1 million each year starting in 2023 — wiping out most of the team’s spending flexibility.
The Sox have taken considerable care in structuring their recent deals in to preserve financial flexibility. Their priority now is adding at least two players to complement Hernández (who can playcenter field, shortstop, or second base) and Christian Arroyo (who can contribute at second and short).
They also can remain opportunistic while looking for upgrades elsewhere on the roster, with chief baseball officer Chaim Bloom saying Tuesday that they would be interested in adding a controllable impact starter.
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