SCOTTSDALE, Ariz. — Plenty of decisions have brought the Red Sox to the point of uncomfortable contortions as they try to limbo under the $208 million luxury tax threshold for the 2020 season. Among them is a decision that was made by the team more than six years ago.
When Dustin Pedroia agreed with the Sox to an eight-year, $110 million extension during the 2013 season — one that (based on deferrals) represents an annual $13.3 million payroll hit for luxury tax purposes — the second baseman did so at what was widely viewed as a below-market rate. His longtime peer, Robinson Cano, was nearing a 10-year, $240 million payday on the open market. But Pedroia wanted to ensure a career spent entirely with the Red Sox, a sentiment reciprocated by the team.
As a result of the catastrophic damage to his left knee incurred while on the field, Pedroia’s contributions on the field over the last two seasons — just nine games — have been almost non-existent. While the second baseman has told the team that he has every intention of trying to return to the field in 2020, there has been plenty of curiosity as to whether Pedroia could simply retire or be given a post-playing-career personal services contract that would allow the Sox to remove his salary from the payroll for luxury tax purposes.
Simple answer: No.
First, it would be ridiculous for Pedroia to walk away from the money that is owed to him. The Red Sox knowingly entered into an agreement that would feature increasing risk at the back end of the deal, recognizing the possibility that his on-field contributions might be limited — or perhaps even wiped out completely — in its final years. In return for the security of a long-term deal, the team received the considerable benefit of a discount on his services for the early years of the deal.
No one suggests that teams should start volunteering to confer tens of millions of dollars on players in their pre-arbitration years, when their performance vastly outstrips their cost to a club. When teams make long-term investments that knowingly feature risk (particularly at the back end of the deal) because of the physical wear of the contract’s fulfillment, there can likewise be no presumption (or even possibility) in a world of guaranteed contracts of the player volunteering to walk away from the money he’s owed.
Undoubtedly, the Players Association would go to battle against any efforts by a player to walk away from his earnings simply because he was physically unable to play — something that would represent a slippery slope that would jeopardize the nature of contractual guarantees. Unlike, for instance, Ryan Dempster’s decision to retire and leave a year of his contract on the table prior to the 2014 season simply because he wanted to step away from the game and spend time with his family, a hypothetical decision by Pedroia to retire and leave money on the table would be driven by the physical inability to play — the result of what he’d done on the field.
But what if Pedroia reached a point where he saw no chance of being able to take the field again? Could he retire, then receive a personal services contract or some other payment mechanism that would ensure his compensation but remove his salary from the books for luxury tax calculations?
Again and unequivocally, no. MLB (rightly) would view such a restructuring as an effort to circumvent the luxury tax and would not permit such accounting legerdemain. The Yankees lived through a similar reality when Alex Rodriguez was released for the purposes of retirement in 2016, yet still was paid (and counted for luxury tax purposes) through 2017, the final year of his landmark 10-year, $275 million pact. David Wright, who was forced into retirement by injuries at the end of the 2018 season, still counted for luxury tax purposes on the Mets payroll in 2019 and will also do so in 2020.
In short, the Red Sox are going to pay Pedroia in 2020, and his salary will count for luxury tax purposes, whether he plays or not. Toward that end, it’s not hard to understand why the team respects and appreciates his efforts to return to the field, even if they come with anything but a guarantee of success.