In 2018, the Red Sox were rewarded handsomely for spending lavishly. The team carried its highest payroll in franchise history, committing to absorb the highest penalties that came with spending more than $237 million (as calculated for luxury tax purposes).
To field a roster that they viewed as championship-caliber, the Red Sox committed to additions both large (a five-year, $110 million deal for J.D. Martinez) and modest (in-season pickups of Steve Pearce, Nathan Eovaldi, and Ian Kinsler). The Red Sox outspent the other 29 teams by a healthy margin, but they were rewarded for doing so with a title.
“You can’t do it all the time,” Red Sox principal owner (and Globe owner) John Henry said on the field at Dodger Stadium. “But we were missing one piece this year, it was over our budget, and we went out and did that.”
Now, as the Red Sox plan for their title defense, it makes sense to examine their resources. How heavily might they spend in an effort to become the first team this century to win back-to-back World Series?
They do have players coming off the books: Hanley Ramirez ($22 million), Craig Kimbrel ($12 million as calculated for luxury tax purposes), Drew Pomeranz ($8.5 million), and Joe Kelly ($3.825 million). But that money will be offset in no small part by arbitration-based raises for Mookie Betts, Xander Bogaerts, Jackie Bradley Jr., and Eduardo Rodriguez, along with the contract structures of the deals for Chris Sale and Christian Vazquez.
The combined salaries of David Price, J.D. Martinez, Rick Porcello, Pablo Sandoval (yes, the final year of the released third baseman’s five-year, $95 million deal counts against the payroll as calculated for luxury tax purposes), Dustin Pedroia, Sale, Mitch Moreland, Eduardo Nunez, and Vazquez will account for roughly $136 million.
On top of that, they have 12 players eligible for arbitration. Betts, whom MLBTradeRumors.com projects at $18.7 millions, Bogaerts ($11.9 million), and Bradley ($7.9 million) top a group that the website projects at a cumulative $57.9 million.
The Red Sox also will have a few inexpensive players on the roster who have not yet reached arbitration eligibility. Andrew Benintendi and Rafael Devers are critical players, given their potential to offer high production for salaries in the mid six figures, while Brian Johnson (out of options) and Hector Velazquez proved their value in 2018.
Those salaries, in combination with a couple million dollars for salaries for players who are on the 40-man roster but in the minor leagues and nearly $15 million in benefits (a standardized chunk that all teams must contribute), suggest that the Sox’ current commitments for 2019 already sit north of $212 million. Assuming that they want to keep a nugget of roughly $10 million for in-season additions, that number bumps up to roughly $222 million.
With the luxury tax threshold at $206 million for 2019, the question is not whether the Red Sox will spend to the point of getting hit with penalties. They’re already into that red zone. The only uncertainty is how far beyond the threshold they will spend, with a need to add (at a minimum) a couple of arms in the bullpen and perhaps a righthanded bat capable of filling the Pearce role (with Pearce himself representing an option).
For any spending between $206 million and $226 million, the Sox will get hit with a 30 percent tax; for spending of $226 million to $246 million, they will get taxed at 42 percent; and for any spending beyond $246 million, they will absorb an 87 percent tax rate, as well as a draft-pick penalty (their top pick in the 2020 draft would move down by 10 spots).
Unless the Red Sox trade players who are currently under team control, it will be almost impossible for them to avoid the second tax tier that takes effect at $226 million. Moreover, it’s hard to see them bringing back, say, both Kimbrel and Eovaldi while staying below the third tier.
That said, the draft-pick hit may be something the Red Sox consider absorbing for a second straight year — particularly if they want to extend one of their key contributors such as Betts, Sale, Bogaerts, or Bradley, while also moving to address multiple positions of need. Certainly, the Red Sox can use Blake Swihart or one of the other catchers as a chip to try to address one of those spots, but there just isn’t a lot of financial laxity available with the current roster.
Does that matter? The Sox made the decision to spend big in 2018, and they don’t regret it. Their efforts to make another run in 2019 are unlikely to come at any sort of discount compared with this championship run.