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Owners aim to get Red Sox under luxury tax, and are looking outside for a baseball ops leader

John Henry (left) and Tom Werner give Dustin Pedroia his 2018 World Series ring in April.John Tlumacki/The Boston Globe/Globe Staff

In their first public comments since firing Dave Dombrowski on Sept. 8, Red Sox principal owner John Henry and chairman Tom Werner outlined the reasoning behind their decision to part with their former president of baseball operations while acknowledging their hope to get payroll under the $208 million luxury tax threshold in 2020.

The comments were made during a 26-minute media session in a suite at Fenway Park. Among the topics addressed by Henry (who also owns the Globe) and Werner:

■  Both owners said that Dombrowski had been “the right choice at the right time” when brought to the Sox as president of baseball operations in August 2015, and Henry — who’d also worked with Dombrowski with the Florida Marlins from 1998–2001 — described him as a “great general manager.” In fact, Henry said that immediately after the 2018 World Series, he anticipated hammering out a long-term deal with Dombrowski.

However, as the Red Sox began their offseason planning last winter, Henry said it quickly became clear he and Dombrowski did not share the same long-term outlook. While Henry said that he hoped that view would alter and the two would come more into alignment over the season, that never happened. Thus came what Henry characterized as the “painful” decision to let Dombrowski go earlier this month.


“What changed quickly was right after the World Series, we had preliminary talks about our way forward and it was clear to me we weren’t on the same page at that point,” said Henry. “There was a difference, I think, in how we thought we should move forward.”

■  While the owners did not directly outline that difference, they did offer clues in their view of the team’s future direction. Most notably, Henry said that in 2020, the Red Sox “need to be under the [luxury-tax threshold of $208 million] and that was something we’ve known for more than a year now.” Werner later clarified that it was a strong preference rather than an absolute.


There are three luxury tax penalty tiers: An initial one that incurs one tax rate, a second one that results in even higher taxes for any overage, and a final tier that produces both a whopping tax rate as well as a draft-pick penalty. The tax rates go up when exceeding the luxury tax threshold in consecutive seasons. By going under the threshold, a team resets its penalty structure.

In 2018, when the threshold was $197 million (with tax rates at the three thresholds of 20 percent, 32 percent, and 62.5 percent), the team spent past the third and highest threshold in a championship season. In 2019, which had a luxury tax threshold of $206 million (with tax rates of 30 percent, 42 percent, and 75 percent), the team will spend over $240 million, incurring roughly $12 million in taxes, but staying below the highest tier of $246 million.

In 2020, the team wants to get below the first luxury tax threshold of $208 million (when the tax rates would be 50 percent, 62 percent, and 95 percent), a move that will require parting with players on the roster, and almost certainly guaranteeing that at least one of J.D. Martinez or Mookie Betts will not be back.

“We’ve known for some time now we needed to reset [the penalties by staying under the threshold], as other clubs have done,” said Henry.


■  Even with a plan to lower payroll, the team still hopes it can find common ground on a long-term deal to keep Betts — a homegrown superstar — in Boston. Werner and team president/CEO Sam Kennedy recently talked with Betts’s agents, and Werner said the team has no reason to think that the 2018 A.L. MVP doesn’t want to remain in Boston.

“I think he loves the Boston Red Sox,” said Werner. “We’ve stated publicly that we would hope he would stay with us the rest of his career. We have made proposals to him in the past and he did want to test free agency, which is his right. And we’ll have some conversations with him going forward. But obviously, there’ll be a point where hopefully we can make a deal or we’ll decide at that point what is plan B or plan C [if he doesn’t sign], but we haven’t gotten to that point and we’re very open to continuing discussions with him.”

■  Despite the strong desire to lower payroll, the Red Sox still expect to be contenders in 2020. “There are teams that make the postseason with half the payroll the Red Sox have,” said Werner. “Our real intention is to be competitive every year and we’ll do whatever we have to to do that. The solution to that isn’t always having the highest payroll in baseball.”

■  Werner noted that the team “[needs] to have more depth in our minor league system and more people coming up through the system that can be every day baseball players.”


While the Sox fielded a standout homegrown core under Dombrowski, the team dealt a number of well-regarded young players. Most notably Yoan Moncada, but also players who might have been positioned to contribute in 2020, such as pitchers Michael Kopech, Jalen Beeks, Logan Allen, and infielder Mauricio Dubon, who might have been positioned to sustain depth.

Meanwhile, the team under Dombrowski never contemplated the kinds of trades of veterans for prospects (or young big leaguers) that would backfill some of that lost depth. That will have to change moving forward for the Sox to achieve their goal of getting under the luxury tax threshold, at a time when their own homegrown core has become increasingly expensive.

■  With enormous questions looming over the organization, Henry said the Red Sox will begin their search for a new head of baseball operations by looking for an experienced general manager, which means looking outside the organization rather than to internal candidates.

■  That said, the search does not come with a timetable, given both the owners’ comfort with the current Gang of Four — assistant GMs Brian O’Halloran, Eddie Romero, and Zack Scott, along with senior VP Raquel Ferreira — in charge of baseball operations, and the difficulty of getting permission to talk to someone who is already running another club.

■  Asked why Dombrowski was fired mid-game on Sept. 8, the owners said that the former president of baseball operations had expressed a desire to know his contractual future, in Henry’s words, “sooner rather than later.” Henry said that evening’s Yankees game marked the first time that he had encountered Dombrowski in some time, and the first opportunity to let him know face-to-face of the decision to fire him. “We had made the decision in the previous few days,” said Henry. “Did not want to wait.”


■  Werner, in a subsequent round of on-camera interviews, characterized as “ridiculous” the suggestion that the job of heading Red Sox baseball operations might be unappealing in light of the firing of Dombrowski less than one year after he won the World Series, as well as the displacement of Ben Cherington less than two years after the 2013 championship. “I consider this position to be the most coveted, or one of the most coveted in all of sports,” said Werner.

Henry also countered the notion that the position is unstable, noting that in 22 seasons as an owner, he’s only had three heads of baseball operations: Dombrowski in Florida from 1998–2001; Theo Epstein — after one year from interim GM Mike Port in 2002 — from 2003–11; Cherington from 2011–15; and Dombrowski again from 2015–19.

“We don’t look to make changes willy nilly,” said Henry. “I think in this case, we were unanimous that we needed to make a change. But I don’t feel like we’re going through general managers.”

Context: There are executives in Major League Baseball who were shocked by the decision to part with Dombrowski and who have suggested that, if approached to interview for the Red Sox job, they’d absolutely have misgivings about the stability of the position given Dombrowski and Cherington. That said, there are others who have said unequivocally that they’d want to explore the position if given the opportunity to do so.

■  The owners confirmed that Alex Cora will remain as manager, regardless of who is brought in to work with him.

Alex Speier can be reached at alex.speier@globe.com. Follow him on twitter at @alexspeier.