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Tuesday, November 10, 2009

Boston.com: Are the [Red] Sox planning a spending spree?

So we’re talking to Theo Epstein Monday afternoon and he mentions that restructuring Tim Wakefield’s deal will save the Sox $1.5 million on the CBT, which is GM-speak for the payroll luxury tax….

“That’s important because there’s some things we want to do this winter and we don’t have a ton of room under the CBT,” Epstein said.

The tax threshold for 2010 will be $170 million. Are the Red Sox actually planning to approach that?

Peter Abraham (following Massarotti) puts the team at $109MM for next year, leaving them $61MM to play with, if they are actually going to approach the limit.

Armchair GMs, if your team had $61MM in this FA market, what would you do with it?

The Piehole of David Wells, Depends Salesman Posted: November 10, 2009 at 09:52 PM | 45 comment(s) Login to Bookmark
  Tags: business, red sox

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   1. Jim (jimmuscomp) Posted: November 10, 2009 at 11:34 PM (#3384369)
61 Willie Bloomquists...

Or, actually that would be 30.5 WB's.

The Royals are dumb.
   2. Marcel Posted: November 10, 2009 at 11:34 PM (#3384370)
I wonder if Theo was referring to locking up Martinez and Beckett to fairly expensive extensions rather than big free agent acquisitions.
   3. The Piehole of David Wells, Depends Salesman Posted: November 10, 2009 at 11:37 PM (#3384372)
61 Willie Bloomquists...


FTW?
   4. DKDC Posted: November 10, 2009 at 11:38 PM (#3384376)
Armchair GMs, if your team had $61MM in this FA market, what would you do with it?


That would make me the GM of the Yankees or Red Sox, so I’d do everything I could to sabotage my team for the foreseeable future.

Seriously, though, this isn’t really a fun game for most of us since it’s pretty unrealistic. The Orioles could actually put a pretty good team together with a $100 million payroll, but that ain’t gonna happen.
   5. snapper (history's 42nd greatest monster) Posted: November 10, 2009 at 11:40 PM (#3384378)
Seriously, though, this isn’t really a fun game for most of us since it’s pretty unrealistic. The Orioles could actually put a pretty good team together with a $100 million payroll, but that ain’t gonna happen.

Only because Angelos doesn't want to. I'm pretty sure they can afford it.
   6. Pasta-diving Jeter (jmac66) Posted: November 10, 2009 at 11:43 PM (#3384382)
Armchair GMs, if your team had $61MM in this FA market, what would you do with it?

I'd put on a production of "No, No Nanette"
   7. Nasty Nate Posted: November 10, 2009 at 11:44 PM (#3384384)
“That’s important because there’s some things we want to do this winter and we don’t have a ton of room under the CBT,”


what does this mean? I would think that they do have a ton of room under the CBT.
   8. Swedish Chef Posted: November 10, 2009 at 11:44 PM (#3384385)
I'd get Holliday and Halladay for assonance.

Then I'd trade the farm system for Pujols and give him a monster contract.
   9. The Piehole of David Wells, Depends Salesman Posted: November 10, 2009 at 11:47 PM (#3384389)
what does this mean?


I think it means that most of that money is already earmarked, and an extra million or two here and there will help out a lot. That's how I read it anyway.
   10. rLr Is King Of The Romans And Above Grammar Posted: November 10, 2009 at 11:47 PM (#3384391)
Armchair GMs, if your team had $61MM in this FA market, what would you do with it?

A) Solid gold house.
B) Rocket car.
   11. The Piehole of David Wells, Depends Salesman Posted: November 10, 2009 at 11:48 PM (#3384392)
A) Solid gold house.
B) Rocket car.


shoulda seen that one comin'.
   12. Shooty: Applying to be Fearless Leader Posted: November 10, 2009 at 11:49 PM (#3384393)
I'd hire myself as CEO and buy France with the salary I'd pay myself.
   13. Swedish Chef Posted: November 10, 2009 at 11:54 PM (#3384404)
I'd hire myself as CEO and buy France with the salary I'd pay myself.

Pujols is a far better investment than France. Not as cheap though.
   14. APNY Posted: November 10, 2009 at 11:58 PM (#3384409)
170M is actually ~160M since the CBT includes ~10M in "benefits" for each team. Also, the CBT uses AAV and not actual salary, so that 109 may be low.

In fact, Cots has them at 109M using actual salary and not including any of the arb players.

There CBT number right now is probably ~130.
   15. The Piehole of David Wells, Depends Salesman Posted: November 10, 2009 at 11:59 PM (#3384412)
that 109 may be low.


Actually, Massarotti went over this a few weeks ago, and I believe the $109MM already includes benefits and AAV.
   16. Shooty: Applying to be Fearless Leader Posted: November 11, 2009 at 12:01 AM (#3384414)
Pujols is a far better investment than France.

Can Pujols make 350 kinds of cheese? Other than that, yeah, Pujols is worth more.
   17. Marcel Posted: November 11, 2009 at 12:06 AM (#3384420)
Can Pujols make 350 kinds of cheese? Other than that, yeah, Pujols is worth more.

Italian cheeses are better anyway.
   18. Adam M Posted: November 11, 2009 at 12:08 AM (#3384423)
Can Pujols make 350 kinds of cheese?


No, but he can make Teh Fear, which allows him to take pretty much whatever cheese he wants.
   19. Shooty: Applying to be Fearless Leader Posted: November 11, 2009 at 12:10 AM (#3384425)
No, but he can make Teh Fear, which allows him to take pretty much whatever cheese he wants

That's not really the kind of cheese I'd want to eat...
   20. cercopithecus aethiops Posted: November 11, 2009 at 12:12 AM (#3384428)
Also, CBT is calculated on the 40 man roster. Cot's gives opening day active roster payrolls.
   21. The Piehole of David Wells, Depends Salesman Posted: November 11, 2009 at 12:17 AM (#3384432)
Here's the link to Massarotti's article. I was partially incorrect. He did not include the $10MM, but he does calculate on the 40-man roster, and the figure is $109MM without ARB. So APNY is correct above. It figures to be less than $61MM.
   22. TVerik Posted: November 11, 2009 at 12:17 AM (#3384434)
Sign Varitek (free agent, right?) to a one year, $61 million deal.
   23. APNY Posted: November 11, 2009 at 12:18 AM (#3384435)
and I believe the $109MM already includes benefits and AAV.

Based on Cot's numbers, I've got them at 83.1M not including benefits, Papelbon, VMart (not sure if there is a trade adjustment, 3.1M AAV otherwise), Hermida, Okajima, Ramirez, Cotchman, Delcarmen, or what they are paying Lugo.

109 seems a little low, but probably closer than I originally thought.

edit - forget the VMart Comment, didn't realize 2010 was an option, and the second article answered my question about any trade adjustment and also showed that I left off Iglesias (2.1M)
   24. NaOH Posted: November 11, 2009 at 12:28 AM (#3384444)
I've posted this elsewhere, and I'll post it here, too.

Let’s be clear about the Competitive Balance Tax since most people are not clear about it.

1. It applies to the 40-man roster.

2. There is a set amount added to every team for pensions, etc. This is roughly $10MM, though I haven’t seen an exact figure in a few years since it was $8MM.

3. A team’s actual payroll is not used to determine where the team stands in terms of the tax threshold. What is used is the average annual value of contracts. So, while a guy like Alex Rodriguez may have been paid $33MM this year by NY — $32MM salary plus $1MM signing bonus — for CBT purposes Rodriguez’s contract is worth $27.5MM ($275MM over 10 years).

Based on the numbers we know from Cot's, Boston has $98.2MM in AAV tied up in 13 players for 2010. Halladay, who Abraham mentioned, would add $13.33MM. And Jason Bay would add $18MM based on Abraham’s speculation. That puts the Red Sox’ CBT payroll at $129.5MM. Add the set fee that all teams are charged, and Boston’s payroll is around $139.5MM.

The four arbitration-eligible players earned just under $11MM in 2009. If that goes up to $17MM this year, that puts the Red Sox' 2010 CBT payroll at $156.5MM. But there are still 21 other players on the 40-man roster. Let's take a low guess for them and put their salary total at $6MM. The Red Sox would then be at $162.5MM for the CBT.

When you look at these numbers, Boston could easily be much closer to paying the CBT than people seem to realize. Add on the fact that there is a belief that the Red Sox work to avoid paying it — remember, Henry apologized to fans last time they paid — along with the fact that paying the tax diminishes the underdog brand which the team has deftly created, and the team seems to be monitoring its payroll situation wisely.

The other thing to remember with how the money paid can differ from the CBT assessment is that a player acquired in July has his entire contract value assigned to the receiving team. Boston is typically active at the non-waiver trade deadline, and the team’s proximity to the threshold could impact their approach.

Just to use the 2009 Victor Martinez acquisition as an example… Boston paid him about $1.9MM in salary, but the $3.1MM AAV of his contract was assigned to Boston. For teams near or over the threshold, this is an important distinction.

These are the types of factors a team which expects to be competitive needs to be keeping in mind now. And it looks to me like the Red Sox front office is in tune with the situation.
   25. Ivan Grushenko of Hong Kong Posted: November 11, 2009 at 12:32 AM (#3384450)
Isn't $40M plenty to sign Holliday, Harden and Scutaro? Who else do they want? Lackey and Cameron seem like overkill.
   26. Steve Phillips' Hot Cougar (DrStankus) Posted: November 11, 2009 at 12:38 AM (#3384459)
Two chicks at the same time.
   27. ekogan Posted: November 11, 2009 at 12:40 AM (#3384461)
Philly Sox Fan did the work on SOSH and came up with current AAV of $130 million. Given that $10 mil of the $170 bound are allocated to benefits, the Red Sox have around $30 million to spend on free agents, about half as much as stated in the article.
   28. Randy Jones Posted: November 11, 2009 at 12:56 AM (#3384470)
remember, Henry apologized to fans last time they paid


Shouldn't he be apologizing for all the years that they didn't pay any luxury tax and he just pocketed the money?
   29. robinred Posted: November 11, 2009 at 01:00 AM (#3384475)
remember, Henry apologized to fans last time they paid


Hey, that's my line. And I think he apologized to Selig as much as to the fans, but I am not sure.

along with the fact that paying the tax diminishes the underdog brand which the team has deftly created, and the team seems to be monitoring its payroll situation wisely.


Yep.

#6 is pretty funny.

"Armchair GMs, if your team had $61MM in this FA market, what would you do with it?"

Give it to the owner of my favorite NBA franchise so he could go after LeBron James.

Slightly off-topic: I don't think Cashman will want to give Holliday what Boras will ask for, since they are already married to Teixeira. With the Wilpons in the tank financially, a lot of people seem to think Holliday winds up with the Bombers. I am not sure. I wonder if Epstein goes after Holliday on a long, big deal.
   30. Jeff K. Posted: November 11, 2009 at 01:07 AM (#3384483)
I'd hire myself as CEO and buy France with the salary I'd pay myself.

Pujols is a far better investment than France. Not as cheap though.


Either one is a far better investment than Shooty.
   31. robinred Posted: November 11, 2009 at 01:09 AM (#3384484)
Either one is a far better investment than Shooty.


He's worth it in Canadian money. Ask Ryan's mom.
   32. Scott Kazmir's breaking balls Posted: November 11, 2009 at 02:03 AM (#3384541)
Sign Adrian Gonzalez.....please.
   33. Crispix Attacks Posted: November 11, 2009 at 02:14 AM (#3384555)
They have to trade for him before they can sign him.
   34. OCD SS Posted: November 11, 2009 at 03:55 AM (#3384630)
I thought they just had to purchase his contract from some Mexican-league team... why would they trade for him?
   35. OCD SS Posted: November 11, 2009 at 04:00 AM (#3384633)
On a more serious note, it's at least a little heartening that the FO thinks this a year to spend money. With the big FA's coming up in the next few years and with the aging nature of the current team, I could easily see 2010 getting chalked up to the "3 out of 10" retooling years they allow for.
   36. Darren Posted: November 11, 2009 at 04:04 AM (#3384634)
Why would this team be worried about the CBT, unless it happens to coincide with their self-imposed payroll? As they did not go over last year, they would not pay a hefty fee. And since they have lots of dough coming off next year, they don't need to worry about being over for 2 years in a row.

If this team spends a bunch, it really blows my latest Sox Therapy post out of the water. Just when I thought I had them all figured out.
   37. Walt Davis Posted: November 11, 2009 at 06:21 AM (#3384684)
The Red Sox would then be at $162.5MM for the CBT.

When you look at these numbers, Boston could easily be much closer to paying the CBT than people seem to realize.


Whoa now. In your numbers, you snuck in re-signing Bay for $18 M and picking up Halladay for $13 M and still leaving them $7.5 M short of the $170. So unless some people were thinking they had substantially more than $40 M to spend on FAs and such, they aren't that close to the CBT.

Anyway, if I had $61 M or $40 M to spend, no way do I spend $18 M of it on Jason Bay.
   38. NaOH Posted: November 11, 2009 at 06:33 AM (#3384688)
In your numbers, you snuck in re-signing Bay for $18 M and picking up Halladay for $13 M....

I did that because Abraham mentioned those in his original post.

Let's say they sign Jason Bay for $18 million. So now they're at $127 million. Where is that extra $43 million coming from that Theo seemed concerned about?

Are the Red Sox leaving room for Roy Halladay and some other superstar?


Edit: Agreed on spending $18MM for Bay.
   39. Infinite Yost (Voxter) Posted: November 11, 2009 at 07:07 AM (#3384696)
Armchair GMs, if your team had $61MM in this FA market, what would you do with it?


Two chicks at the same time.
   40. OCD SS Posted: November 11, 2009 at 01:31 PM (#3384731)
And since they have lots of dough coming off next year, they don't need to worry about being over for 2 years in a row.


I don't think that provision is in play anymore; I thought that the new CBA stated that once a started paying the CBT, they couldn't get out of paying for it.
   41. The Piehole of David Wells, Depends Salesman Posted: November 11, 2009 at 03:25 PM (#3384789)
Voxter, DrStankus (#26 above) already beat you to it. You owe him a coke.
   42. Mr. J. Penny Smoltzuzaka Posted: November 11, 2009 at 03:26 PM (#3384790)
Two chicks at the same time.


For $61 million - one of them could be Jamie McCourt.
   43. Shooty: Applying to be Fearless Leader Posted: November 11, 2009 at 03:27 PM (#3384794)
For $61 million - one of them could be Jamie McCourt.

For $61 million, one of those chicks could be me.
   44. Infinite Yost (Voxter) Posted: November 11, 2009 at 03:49 PM (#3384813)
Damn it.
   45. Shooty: Applying to be Fearless Leader Posted: November 11, 2009 at 03:52 PM (#3384815)
Damn it.

What? Don't be closed minded!

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