The Red Sox just received a $1.87 million tax bill from Major League Baseball after a payroll that weighed in at just under $200 million in 2015 (nearly $11 million over the $189 million luxury tax threshold) – which means that the team spent well over $200 million for a last-place finish.
The figure includes not only the tax, but also players like Allen Craig and Justin Masterson, who were paid handsomely after being designated for assignment.
For now, the team's owners are responding with a willingness to spend even more aggressively on 2016, as evident by the acquisitions of David Price, Craig Kimbrel, and Chris Young – all of whom are being paid at or near the top of the heap for their positions (starter, closer, fourth outfielder).
Here's my look at the 2016 payroll – which is currently positioned to barrel well beyond the 2015 expenditures – and the anticipated luxury tax penalties that the team is prepared to absorb.
While the team is spending aggressively on 2016, however, it's worth noting that the emergence of a young core, in combination with a careful staggering of the team's guaranteed long-term deals that will peel tens of millions off the books in each of the next five years, convinced the team that it could assume this sort of bold expenditure.
In each of the next four years, the Sox have at least $22 million in guaranteed salary coming off the books. Some of that paring will be offset by salary increases through arbitration and/or long-term contracts – particularly starting in 2018, when Xander Bogaerts might be reaching arbitration for a second time, or in 2019, when Bogaerts could be a third-time arbitration-eligible player, Mookie Betts could be a second-time arbitration-eligible player, and Blake Swihart and Eduardo Rodriguez could be reaching arbitration for the first time.
|$M||Off the books|
|2017||$148.3||Ortiz ($16M), Uehara ($9M), Hanigan ($3.58M; team option), Buchholz ($11.7M, team option)|
|2018||$124.4||Kimbrel ($10.5M; team option), Miley ($6.91M; team option), Young ($6.5M)|
|2019||$102.4||Ramirez ($22M; vesting option); Price ($31M) has opt-out after 2018|
|2020||$62.8||Sandoval ($19M), Porcello ($20.625M); Castillo ($10.36M) has opt-out after 2019|
|2016||Tazawa (5+), Kelly (3+), Ross (3+)|
|2017||Kelly (4+), Ross (4+), Bogaerts (3+), Holt (3+), Workman (3+), Layne (2+)|
|2018||Kelly (5+), Ross (5+), Bogaerts (4+), Holt (4+), Workman (4+), Layne (3+), Betts (3+), Vazquez (3+), Swihart (2+)|
|2019||Bogaerts (5+), Holt (5+), Workman (5+), Layne (4+), Betts (4+), Vazquez (4+), Swihart (3+), Rodriguez (3+), potentially anyone else in the system|
Still, Price's contract can fit within the Red Sox' overall vision of their long-term payroll. The emergence of a young core, with players like Bogaerts, Betts, Swihart, Rodriguez – and more beyond them, like Brian Johnson, Henry Owens, and the loaded Greenville roster that featured at different points second baseman Yoan Moncada, third baseman Rafael Devers, and righthanders Anderson Espinoza and Michael Kopech – has allowed the Red Sox to anticipate enough low-cost bang for their buck to permit them some deep dives into the free agent pool.
In some ways, the three-time champion Giants offer an illustration of the sort of risk the Red Sox believe they're 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 didn't crush the team's 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 didn't feature such a talent base.
Certainly, the team is thrilled by the idea of Price as their ace for years to come. But even if, at some point during the life of his contract, he proves subject to the fairly common forces of injury and decline, the team believes that its young talent base will help it to avoid the sort of predicament that it faced in the offseason of 2011-12.
Follow Alex Speier on Twitter at @alexspeier.