Red Sox to pay $11.9 million in luxury tax, money well spent
The Red Sox will pay Major League Baseball $11,951,091 in luxury tax according to figures obtained by the Associated Press and published on Saturday.
After winning 108 games and then the World Series, it will seem like money well spent.
As calculated for luxury tax purposes, the Sox had a payroll of $239.5 million. The Washington Nationals were second at $205 million. No other team exceeded the tax threshold of $197 million.
The Yankees finished with a payroll of $192.98 million. It was the first time in 15 years they did not pay a tax.
Because the Red Sox were more than $40 million over the mark, their first selection in next June’s amateur draft will drop 10 spots, to approximately No. 43.
The luxury tax payroll included $700,000 in bonus payments to J.D. Martinez and the $50,000 bonus Steve Pearce earned for being named Most Valuable Player of the World Series.
The check is due Jan. 21. The Red Sox and Nationals will pay MLB $14,337,188 in tax. The AP reported that $13 million funds player benefits with 50 percent of the remainder going to player retirement accounts. The rest is divided among non-taxed teams.
That will leave $23,878.35 per team. For the Yankees, that won’t even pay for one plate appearance by Giancarlo Stanton.
The tax threshold for 2019 starts at $206 million, with the highest penalties triggered for exceeding $246 million. Based on their current roster and the expectation of adding at least one relief pitcher, the Red Sox are likely to exceed that mark.
The Sox will be taxed 30 percent on the first $20 million over, 42 percent on the next $20 million, and $75 percent on any amount over $246 million.
So if the Sox were to go to $250 million — which is quite possible — they would be taxed $17.4 million.
While that is a significant sum, it’s also a matter of perspective.
The Sox will pay $17.4 million of Pablo Sandoval’s salary next season while he plays for the San Francisco Giants.
The Sox released Sandoval in 2017 and remain responsible for his contract beyond the minimum salary. By the time his contract is up after next season, the Sox will have paid approximately $48 million for Sandoval not to play for them.
The Sox also paid a fine of $31.5 million to sign Cuban infielder Yoan Moncada in 2015. He has since been traded to the White Sox and has hit .234 in his career. But at least Chris Sale came back in the trade.
In all, the Sox have paid $37.1 million in the 16 seasons baseball has had a luxury tax.