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Alex Speier

Red Sox’ payroll follows spread-the-wealth formula

The Red Sox management team (from left) — Larry Lucchino, Tom Werner, John Henry, Ben Cherington, and John Farrell — conducted a town hall meeting with fans at Foxwoods Resort and Casino in Connecticut Friday.Billie Weiss/Boston Red Sox/Boston Red Sox

Outraged accusations of thrift swirled around the Red Sox’ unwillingness to pay market value for Jon Lester. The team, according to an industry source, never made an offer to righthander Max Scherzer. The three starters the team acquired to round out its rotation will make about $26 million combined — roughly what Lester ended up getting per year from the Cubs, and considerably less than Scherzer’s annual salary with the Nationals.

Yet according to principal owner John Henry, who also owns the Globe, the Red Sox are on track to fly past the $189 million luxury tax threshold in 2015 (for the first time since 2011) and indeed appear likely to clear $200 million for the first time in team history.


The math supports his claim. How?

Much as they did in the wreckage of the 2012 season, the Sox placed several bets across the board rather than stacking their chips on the signature free agents of that offseason. They started with the $72.5 million deal for Rusney Castillo, continued with the re-signing of Koji Uehara for $9 million a year, then made the signature signings of Hanley Ramirez ($22 million a year) and Pablo Sandoval ($19 million a year), plus the additions of Rick Porcello ($12.5 million) and Justin Masterson ($9.5 million), giving them 10 players who will make $9 million a year or more in 2015.

The result of that spending is a payroll that features 14 guaranteed contracts totaling $150.25 million in salaries for next year — with an average annual value (the key figure in calculating luxury tax) of those deals coming in at $152.9 million.

On top of that, the team’s four arbitration-eligible players — Porcello, Wade Miley, Junichi Tazawa, and Daniel Nava — will make something in the vicinity of $20 million, pending the resolution of the salaries of Nava and Miley. As things currently stand, the 25-man roster will be rounded out by seven players who will make approximately $4 million.


The current projected 25-man roster thus represents a payroll commitment of about $177 million. But that’s not the end of the team’s payroll projections.

The team is on the hook for its third and final $3.9 million thank-you subsidy to the Dodgers as part of the 2012 blockbuster trade involving Josh Beckett and Adrian Gonzalez. That sum is included by Major League Baseball when calculating the payroll for luxury tax purposes, taking it to about $181 million.

The medical benefits contribution that all 30 teams must make (an industry source estimates that figure at $12.5 million for 2015) also counts against the tax threshold, boosting the Sox up to something like $194 million.

Also included in the payroll calculation are the salaries conferred upon players who are in the minor leagues but on the 40-man roster; figure something like $1 million, which brings the payroll up to $195 million.

But the 25-man big league roster will shift over the course of the year (quite likely before the season even starts) and the Sox need to earmark money accordingly to add players — whether call-ups or signings for those who are injured or underperform, or midyear trades or signings (the next Castillo?).

It’s possible that the Sox will shed payroll (if, for instance, Shane Victorino or Allen Craig were dealt) but they must prepare for the possibility of adding on, with something like a $9 million contingency fund representing a relatively conservative budget chunk.


Put all of that together and the result is a payroll that will indeed get stretched by the Sox in record fashion, to an estimated $204 million or so — roughly $15 million over the 2015 luxury tax threshold of $189 million and well beyond the team’s record-high payroll of $189.4 million in 2011.

Because they didn’t exceed the $189 million luxury tax threshold of 2014, the Sox would be penalized for their overage (everything spent beyond $189 million) at 17.5 percent, resulting in an approximate bill from MLB of a bit more than $2.5 million, the fourth-largest tax payment in team history and the first since the team footed a $3.4 million bill following the 2011 season.

Of course, that 2011 predecessor is a fairly compelling reminder that spending big is no guarantee of winning — far from it, particularly at a time when (as Brian MacPherson of the Providence Journal demonstrated) the relationship between spending and winning is more tenuous than at any time in recent years.

Moreover, the team’s willingness to spend liberally while steering clear of the ace market is likely to represent the ultimate fault line for how this blueprint will be assessed, the true test of whether the team is just spending money or spending it well.

Nonetheless, the level of commitment suggests that the team believes a spread-the-wealth formula makes sense in the quest to rebound from the last-place finish in 2014.


“We are significantly over the competitive balance tax, which this year is $189 [million],” Henry told reporters Friday. “The reason we’re over $200 [million] is we’re building the team we wanted to build.”

Follow Alex Speier on Twitter at @alexspeier.