They’re on to 2017.
The conclusion of the World Series immediately sets in motion the start of offseason player movement, beginning with the onset of free agency for all eligible players and a host of decisions about player options. The Red Sox, as expected, exercised the $13.5 million option on Clay Buchholz and declined the $3.75 million option on Ryan Hanigan.
Those moves help to define the Sox’ commitments for 2017 which, in turn, gives some sense of what kind of resources they might have for the forthcoming season, while painting a picture of a bit less financial freedom than one might anticipate.
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Start with this: According to a major league source, the Red Sox spent roughly $215 million to $220 million on actual team payroll in 2016. For Major League Baseball’s luxury tax calculations, that number will come in under that figure (it doesn’t include, for instance, most of the roughly $20 million paid to Allen Craig or Rusney Castillo, both of whom spent most to all of the season off of the 40-man roster), but the Red Sox will end up paying the luxury tax for the second straight year, having gone well past the $189 million threshold.
Meanwhile, even with the retirement of David Ortiz and the free agency of Koji Uehara, Junichi Tazawa, and Brad Ziegler, the Sox’ salary commitments for 2017 already appear to be close to what they spent last year, based on the expectation that they’ll want to preserve roughly $10 million for in-season roster moves.
Right now, the Red Sox have roughly $136 million in guaranteed commitments to players as calculated for luxury tax purposes (which use average annual values of the life of a contract, rather than a single year). However, Craig and Castillo are not part of that calculation so long as they are not on the 40-man roster. They’ll nonetheless cost the team an additional $24 million in paychecks.
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On top of that, the Sox have eight players who, as of right now, appear likely to open the year on the big league roster who are arbitration-eligible. Based on the projections of MLBTradeRumors.com, that group will account for roughly another $23 million.
Add to those projections pre-arbitration-eligible players like Mookie Betts, Travis Shaw, and Eduardo Rodriguez, and then tack on another $10 million or so for in-season moves and an additional $13.5 million for the contribution that every team must make to MLB’s medical benefits pool, and the present commitments start to near what the Sox spent in 2016.
Already, the team’s payroll as calculated for luxury tax purposes is close to the $189 million mark that served as the threshold for the start of penalties in 2016. Meanwhile, the actual cash projected payroll – thanks to Castillo ($10.5 million in 2017) and Craig ($11 million) – is already close to $210 million.
| Commitment | Players | 2017 $ M | |
|---|---|---|---|
| Guaranteed (AAV) | 10 | 136.425 | |
| Arbitration | 8 | 23.1 | |
| Major league pre-arb | 6 | 3.44 | |
| Depth call-ups** | 4 | ||
| Trades/midyear** | 5 | ||
| Minor league 40-man** | 1.2 | ||
| Benefits** | 13.5 | ||
| TOTAL LIKELY COMMITMENTS ($M) | 186.665 |
So what does that mean? That remains to be determined.
“I think, very consistent with years past, there’s no hard-and-fast payroll number,” said Red Sox president Sam Kennedy. “We’re going to see what happens in the market, see what develops. We do need to make some moves for the obvious holes that are there. I think what we’ll do is see how the marketplace develops, and then [president of baseball operations Dave Dombrowski] will come to ownership with his recommendation and we’ll kind of adjust as needed, but I think we’ll be very, very committed to giving Dave the resources that he thinks he needs and that the front office, on the baseball side, needs to be competitive.
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“That’s really been consistent going back to 2002, when we arrived. There’s never been a hard-and-fast, ‘This is the budget. You must stick to this number.’ I think that we can be a little more agile and react to what we’re seeing out there in the marketplace.
“Some years we’re more aggressive than others. We were obviously very aggressive last year with the signing of David Price, spending a lot of cash, and in the case of Craig Kimbrel, giving up a lot of prospects. I don’t think you’ll see a retrenching. I think we’ll continue to be aggressive but I think we’ll also try to balance that with being long-term focused as well.”
That balance, however, is interesting to ponder. The Red Sox’ commitments outlined above, after all, don’t include whatever the team spends to add a bat following Ortiz’s retirement, or to add a bullpen arm or two.
What if, for instance, the Red Sox want to make a run at Edwin Encarnacion, a long-term deal in excess of $20 million a year? Unless they want to push their 2017 payroll well beyond its 2016 levels, they’d likely need to trade a contract as something of an offset. There would certainly be a market for Buchholz at a relatively affordable one-year, $13.5 million salary. The team could also get more creative and examine whether a team would take on the remaining two years (with a vesting option for a third) of Hanley Ramirez’s salary or if, in a poor market for third basemen beyond Justin Turner, a team might take on half of the remaining obligation to Pablo Sandoval to create payroll space.
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But unlike a year ago, when the Red Sox took on significant payroll (more than $45 million to Price, Kimbrel, and Chris Young, with a modest offset from trading Wade Miley), Sox additions to address their holes this winter may come with a requirement for some subtraction – even assuming that the team plans to maintain something close to, or even beyond, their team-record expenditures on major league payroll in 2016.
In other words, as MLB’s GM Meetings next week help to set up the offseason dominos, the fascination surrounding the Sox will be as much related to the players whom they might trade as the ones whom they target as additions.
| SETTLED SALARIES | ||
|---|---|---|
| Player | 2017 Salary | 2017 AAV |
| David Price | 30 | 31 |
| Hanley Ramirez | 22.75 | 22 |
| Rick Porcello | 20.125 | 20.625 |
| Pablo Sandoval | 17.6 | 19 |
| Dustin Pedroia | 15.125 | 13.3 |
| Craig Kimbrel | 13.25 | 10.5 |
| Rusney Castillo | 10.5 | 0 |
| Chris Young | 6.5 | 6.5 |
| Allen Craig | 11 | 0 |
| Clay Buchholz | 13.5 | 13.5 |
| 10 players | 160.35 | 136.425 |
| ARBITRATION ELIGIBLE* | ||
| Joe Kelly | 2.6 | 2.6 |
| Robbie Ross Jr. | 1.8 | 1.8 |
| Fernando Abad | 2 | 2 |
| Drew Pomeranz | 4.7 | 4.7 |
| Xander Bogaerts | 5.7 | 5.7 |
| Jackie Bradley Jr. | 3.3 | 3.3 |
| Brock Holt | 1.7 | 1.7 |
| Sandy Leon | 1.3 | 1.3 |
| 8 players | 23.1 | 23.1 |
| TEAM CONTROL PRE-ARBITRATION ELIGIBLE | ||
| Player | 2017 projected** | |
| Mookie Betts | 0.7 | |
| Steven Wright | 0.6 | |
| Carson Smith | 0.53 | |
| Christian Vazquez | 0.53 | |
| Eduardo Rodriguez | 0.54 | |
| Travis Shaw | 0.54 | |
| 6 players | 3.44 |
Follow Alex Speier on Twitter at @alexspeier.