I'm also skeptical because this seems like a really bad deal for everyone other than the owners of the very richest clubs. It's not just, why would the union sign off on this, but why would all 30 owners sign off? Note that according to Gasper and Rovell, the “rebate” for large market teams that stay under the cap isn’t that they can receive the revenue sharing payout, 1/30 of the total moneys, which they had been receiving under the old CBA. Rovell and Gasper say that the clubs are rebated their payments. If that’s right, this plan means the end of revenue sharing in baseball (at least, the sharing of local revenues.) This plan, if it’s being reported correctly and if I'm reading it correctly, will make it even harder for the very small markets like Tampa, Milwaukee, Cincinnati, and Kansas City to compete, as revenue sharing from the clubs which monopolize the larger markets will be phased out over the course of the CBA.

Just as a fan of the game, I really hope Rovell and Gasper are wrong on that last point. If they’re right, baseball bought a salary cap at the price of revenue sharing, which is a terrible trade-off for competitive balance. It would increase the revenues of the Steinbrenners and Henrys by tens of millions of dollars, and they would be effectively forbidden from spending that revenue on ballplayers. Why would anyone other than Henry, the Steinbrenners, and a handful of other top-market owners take that deal? There must be something else that hasn't been reported, or something I'm misunderstanding.

This plan, if it’s being reported correctly and if I'm reading it correctly, will make it even harder for the very small markets like Tampa, Milwaukee, Cincinnati, and Kansas City to compete, as revenue sharing from the clubs which monopolize the larger markets will be phased out over the course of the CBA.

I'm not sure I agree with your analysis. The small market teams will get hit some on the revenue side, but they won't have to spend as much to attract talent as the big market teams, *and* there will be fewer suitors for their homegrown talent as the big market teams need to exercise some discipline in signing free agents. There will still be sharing of the national TV money. The implications for competitive balance are hazy. The implications for profit margins for the big market teams are good (especially for the Red Sox and Cubs who will probably sell out almost every game no matter whether they stop winning as much). The implications for players are that they are likely to see salary cuts.

Why are the Sox, who have previously treated the luxury tax threshold as a guideline, now acting as if their payroll is non-negotiably limited? ..... So, then, why would the Red Sox be acting as if they have a hard cap for the 2012 season?

I think it's too soon to just accept this as fact.

If they’re right, baseball bought a salary cap at the price of revenue sharing, which is a terrible trade-off for competitive balance. It would increase the revenues of the Steinbrenners and Henrys by tens of millions of dollars, and they would be effectively forbidden from spending that revenue on ballplayers. Why would anyone other than Henry, the Steinbrenners, and a handful of other top-market owners take that deal? There must be something else that hasn't been reported, or something I'm misunderstanding.

I haven't seen the numbers to confirm this but one thing that seems to be the case in recent years is more and more teams being aggressive in a spending fashion. Perhaps, with the Yankees, and to a lesser extent Sox, Phils and Angels, unable/unwilling to spend above this harder cap there is more incentive for a team like the Marlins to spend.

In other words, if I'm the Blue Jays and I know that upping my payroll to $100 million is just going to be answered by the Yankees going to $230 then I'm not going to be motivated to spend. If however I can close the gap with a bit more aggressive spending then it is worth it to me.

As for the MLBPA I think the benefit of more big spenders outweighs the elimination of the uber-spenders. Yeah, the Evil Empires are great for the Sabathias of the world but the rank and file is better off if there is more widespread spending. The Yankees adding $20 million to their payroll is less beneficial to the MLBPA than the Marlins or Rays doing so. Adding $1 million to 20 players' salaries is probably a win for the MLBPA over adding $20 million to 1 player's salary.

I think this suggests that "we" have been right all along and that "small market" owners had more money to spend.

There is maybe $60M in salary over the luxury tax threshhold in all of MLB. There is about $450M re-distributed through revenue sharing. I really don't see how taking $60M out of circulation makes up for ending the redistribution of seven times that much money. If it's being reported correctly, and I'm not misunderstanding the reporting, this is a terrible deal for small market teams.

And for the players, they have fought against a hard cap for years. I don't see how they'd let one in through the back door.

I'm not sure I agree with your analysis. The small market teams will get hit some on the revenue side, but they won't have to spend as much to attract talent as the big market teams, *and* there will be fewer suitors for their homegrown talent as the big market teams need to exercise some discipline in signing free agents.

I don't agree with this at all. Why wouldn't small market teams need to spend as much money to attract talent as big market teams? Players are still going to go to the top bidder (I must be misunderstanding your point?). There might be fewer suitors, but for the high end talent, that doesn't matter (as the Prince Fielder sweepstakes exhibits). A salary cap will squeeze the mid-tier talent - the Jeremy Guthries and Joe Saunders of the world, but it doesn't help the Rays retain a David Price or Evan Longoria.

As a small market fan, I'd much rather have revenue sharing (ideally coupled with some sort of spending requirement or salary floor) than a salary cap - which I don't really see benefitting me.

I have $155M or so in salary commitments for the Sox after the 2012 season; that includes aggressive raises in arbitration. That assumes Matsuzaka, Ortiz, and Jenks won't be back and are off the books. I don't think there will be pressing needs to replace either Jenks or Matsuzaka, but lets allocate another $8M for a DH. That puts the Sox at $163M. Add in an additional $13M for all minor league salaries + benefits + bonuses which count towards the luxury tax. That puts them at $176M for next season, or just under the tax. So the savings of losing around $30M in salary between Matsuzaka, Ortiz, and Jenks is almost immediately swallowed up by the appreciation of a bunch of arbitration-eligible players and replacing one of those players.

One option for the Sox would be to pick up Youkilis' option and trade him, which would clear 10-11 million off the books.

It doesn't get much prettier after 2013, unless you're looking forward to replacing the current starting CF and catcher.

MCoA, do these numbers match up with yours?

I haven't put together arb estimates for 2013, since there's so much uncertainty, but I agree with you in broad strokes. The Sox have less than $30M in salary cap payroll coming off the books (and half of that is a theoretical one-year deal with Ortiz, they might lock him in for two seasons), and they'll have arb raises to pay a whole ton of guys. There's not much maneuverability.

The one thing that gets a little prettier is that in 2014, the threshold goes up to $189M. So that's some free money.

The other thing, analyzing this from a provincial standpoint, is that bad as a salary cap is for the Sox, it's way worse for the Yankees. The Red Sox are constrained at about their traditional salary level, just with less flexibility. The Yankees have to cut tens of millions off the payroll. And if the salary cap comes at the cost of revenue sharing, then it's way worse for the Rays, too, who will lose one of their primary revenue streams.

EDIT: And, again, I'm still having trouble accepting that Rovell and Gasper have the whole story. This would be such a massive, massive change in the way that baseball does business, and the benefits would accrue to such a small minority of the stakeholders in negotiations, that I'm expecting there's much more to this story.

My head hurts.

My hair hurts.

I'm feelin' a little bit dangerous.

I feel great - just bought some Sox tickets.

Reports are the Red Sox have offered deals to Oswalt and EJackson.

Reports are the Red Sox have offered deals to Oswalt and EJackson.

Jackson would be a great signing. I'm indifferent to the Oswalt talk.

Jackson would be a great signing. I'm indifferent to the Oswalt talk.

I'm the other way. I want Oswalt and it's purely for aesthetics. I fear Jackson is going to be incredibly frustrating to watch even when he is on while Oswalt will be a treat.

Either one is A-OK with me though.

Either one is A-OK with me though.

I can get on board with that. I'm (perhaps overly) pessimistic about the state of the rotation, so Jackson's 200 inning 4.00 ERA would work for me just fine, frustrations and all. I also just don't see Oswalt excelling in that division next year, but I admit that's based on nothing but my own skepticism.

I don't agree with this at all. Why wouldn't small market teams need to spend as much money to attract talent as big market teams? Players are still going to go to the top bidder (I must be misunderstanding your point?). There might be fewer suitors, but for the high end talent, that doesn't matter (as the Prince Fielder sweepstakes exhibits). A salary cap will squeeze the mid-tier talent - the Jeremy Guthries and Joe Saunders of the world, but it doesn't help the Rays retain a David Price or Evan Longoria.

I don't mean that small market teams will get better deals than big market teams. I meant that salaries in general will be suppressed. Let's wait and see how things shake out in a year or two before reading too much into Pujols and Fielder's deals. Was there another serious bidder for Fielder? I'd be surprised, and I think teams will eventually start to realize that players are going to start to settle for smaller contracts.

And I do agree that the squeeze in salaries will probably be more severe for the mid-level talent - but that means that the small-market teams will be able to compete for the mid-level talent, and fill out their rosters with mid-level talent if they successfully develop young talent of their own. The Rays might not be able to keep Price and Longoria when they get ready to go on the open market, but they may be able to go out and get a safe veteran as a complimentary piece if they have a stretch where they can build around pre-free agency home grown talent. Traditionally, they've had trouble doing that. Next off season, I wouldn't be surprised to see them pick up a thoroughly average veteran catcher for $3 million or so if Lobaton doesn't work out.

Also, there will be a 2-3 year window where the big boys will be overcommitted from long-term deals signed in the old regime.

EDIT: And, again, I'm still having trouble accepting that Rovell and Gasper have the whole story.

I'm with you. Writers have conflated luxury tax and revenue sharing so many times in the past that I'm skeptical they have it right this time, with less publicly available info. Per MLB.com,

The 15 teams in the largest markets will be disqualified from receiving revenue sharing by 2016.

That seems to suggest Rovell has it backwards, and wrong.

So... If 15 teams won't get revenue sharing, does that mean the teams collecting are getting double what they otherwise would have, or still just 1/30? If the former, then this is a huge boon to the smaller revenue teams, with another $15 million in revenue per year to each. (Prince Fielder would like you to note that Detroit is a smaller-revenue team.)

Andrew Bailey avoids arb, 1 yr/$3.9 million.

As I posted in the other thread, Cherington said on 'EEI today that he is under no mandate to avoid paying luxury tax this year. He says that the Scutaro trade was indeed made for budgetary reasons, but it was to be efficient with the budget he has, not to keep the club under the luxury tax.

That doesn't clear too many things up. They won't be constrained by the luxury tax threshold, but they do have some sort of less-than-porous budget cap that they have to respect.

I think it makes sense on its own. I dont think its a stretch to say that its not worth paying $6M to Scutaro on a team that has Aviles/Punto/Iglesias all under contract. He's prob a marginal improvement in a best case scenario, and its a reasonable bet that one if not more of those three outplay him this year.

Look, I really dont understand why people felt the need to defend the Saltalamacchia/Varitek decision last year, and are still upset at the Punto/Aviles decision this year. If anything, signing Victor Martinez at $12M for 2011 would have made more sense that keeping Scutaro around for $6M in 2012 (long term injury not withstanding).

And I fully admit that my pessimism on Scutaro is 95% because I dont believe he can play acceptably at SS any more.

So... If 15 teams won't get revenue sharing, does that mean the teams collecting are getting double what they otherwise would have, or still just 1/30? If the former, then this is a huge boon to the smaller revenue teams, with another $15 million in revenue per year to each. (Prince Fielder would like you to note that Detroit is a smaller-revenue team.)

When I read up on revenue sharing, everyone seems incredibly hazy as to how it actually works. Gasper says that all the money is pooled (31% of each club's local revenues) and every club gets an even share. But everyone else only talks about the money that is re-distributed - that is, the money that a club receives or pays beyond its initial contribution.

I wonder if the way that revenue sharing works is that each club gives the league office their financial numbers, the league office calculates the revenue sharing pool, and then only asks for clubs in the top 50% in local revenues to send the money that will be re-distributed to the bottom 50%. That is, I wonder if the initial step of pooling all shared revenue doesn't actually happen, as a financial transaction, and only the re-distributive part actually occurs.

In that case, what the CBA might be saying is that the large market clubs -Jayson Stark has the full list (scroll down) - can't receive any re-distributed revenue sharing. So, if Texas or Chicago or San Francisco has local revenues in the bottom 50% of baseball, they can't receive more in revenue sharing than they (theoretically) put in to the pool in the first place. If revenue sharing is done in the way I theorized above, that would explain why a rule against receiving re-distributed revenue sharing funds is being equated with a rule against receiving any revenue sharing funds.

This still wouldn't explain the "rebate" side of things, which again seems to suggest that a salary cap is instituted as the price of phasing out revenue sharing. I can't figure out how such a thing could have gotten into the CBA, but we do have some good evidence of the Sox and Yankees avoiding long-term commitments that seems consistent with a CBA that includes a de facto salary cap. I should probably just wait until the actual CBA is announced, but this seems like such a huge story I'm confused no one's followed up on it in the last month.

Also, according to a Robothal report from 1/24, the Sox' interest in Jackson is dependent on him taking a one-year deal.

This would be consistent with the "2013 salary cap" scenario. The Scutaro deal still doesn't make a ton of sense - basically, we have to accept (1) that Scutaro is worse than his projections, (2) that every other club in baseball also believes that Scutaro is worse than his projections, and (3) that Punto/Aviles can be a reasonably above-replacement shortstop solution - but it's not completely unreasonable.

So, I think Nasty Nate is right that the Sox aren't treating the 2012 luxury tax threshold as a hard cap, though they do have an unspecified payroll cap. But it looks like they may be treating 2013' threshold as a hard cap.

Also, according to a Robothal report from 1/24, the Sox' interest in Jackson is dependent on him taking a one-year deal.

This would be consistent with the "2013 salary cap" scenario.

It would also be consistent with a "We only have 1 rotation opening for 2013 and 2014 and we don't want to lock ourselves into Edwin Jackson as that guy" scenario.

I wonder if the way that revenue sharing works is that each club gives the league office their financial numbers, the league office calculates the revenue sharing pool, and then only asks for clubs in the top 50% in local revenues to send the money that will be re-distributed to the bottom 50%. That is, I wonder if the initial step of pooling all shared revenue doesn't actually happen, as a financial transaction, and only the re-distributive part actually occurs.

I assume it happens that way, as a transaction.

Whether the CBA references the redistributive dollars or all the dollars, I don't know. Fifteen teams not receiving redistributed dollars, vs. not receiving any dollars, is a huge distinction. Receiving zero by 2016, vs. potentially receiving a rebate of all of it by 2016, is a huge distinction.

It would also be consistent with a "We only have 1 rotation opening for 2013 and 2014 and we don't want to lock ourselves into Edwin Jackson as that guy" scenario.

Or "we don't want to be Lackeyed again."

It would also be consistent with a "We only have 1 rotation opening for 2013 and 2014 and we don't want to lock ourselves into Edwin Jackson as that guy" scenario.

It is pretty much a mortal certainy that the Red Sox (and every other team) will give 30 starts in 2013-14 to someone(s) worse than Jackson projects to be.

It is pretty much a mortal certainy that the Red Sox (and every other team) will give 30 starts in 2013-14 to someone(s) worse than Jackson projects to be.

That doesn't mean you're worse off with the person who will be less valuable than Jackson and the $15M+ you'd be paying Jackson than you would be if you commit to Jackson for multiple years.

Why would Jackson take a 1-year deal so that he can compete on the open market with a better pitching free agent class next year? And how would pitching in the AL East help his cause?

This still wouldn't explain the "rebate" side of things, which again seems to suggest that a salary cap is instituted as the price of phasing out revenue sharing.

After staring at this stuff a little longer I think the rebate thing goes something like this:

(a) Currently, something like 11 or 12 teams are "net" payors into revenue sharing (i.e. they pay in more than they get out), and the other 18 or 19 teams are net receivers. The new CBA mandates that no more than 15 can start out as net receivers.

(b) That means there are 3-4 teams that would have been a net receiver (i.e. they get out more than they pay in), if not for the new rule. They're in a larger-than-median market, yet drop their revenue so much that they gain from revenue sharing. The new CBA is trying to stop that.

(c) Except... if those 3-4 teams are also paying a lot in salary, then it's not like they're a fire sale team (for which revenues and salaries drop). So, if they pay luxury tax money, then they are rebated a portion of the net receipts they would have received in revenue sharing.

(d) All other teams are treated in the usual way.

If that's the way it's structured, the teams affected are the 3-4 on the bubble. They're worse off, but they have a little bit of a free pass on part of the luxury tax. The rest are no less screwed than before, on revenue sharing.

It is pretty much a mortal certainy that the Red Sox (and every other team) will give 30 starts in 2013-14 to someone(s) worse than Jackson projects to be.

And if they sign Jackson, there's a decent chance that's still true, and that the person performing worse than Jackson's projections is Jackson.

Why would Jackson take a 1-year deal so that he can compete on the open market with a better pitching free agent class next year? And how would pitching in the AL East help his cause?

He likely wouldn't. I'm sure Boston's offer reflects what they want, not what they think he'd want.

Jackson could decide to take a one year deal if it's at very good money, and gives him a chance to establish himself as a star on a big market team, especially if there aren't any takers for him on long deals at big money. E.g. if the Sox offer him 1 year, $15 million and the best long term deal he sees is 4 years at $50 million, he might go for the Sox offer, and see if he can get 3 years, $45 million if he has a good season for the Sox. He probably can get a multi-year deal somewhere, but maybe not for a contender.

Cafardo is saying the Sox are one of the few teams Jackson would consider a one year deal from. Maybe he (and Boras) think teams understand park factors and league differences better than they used to (or at least enough of them do). Perhaps he thinks the added wins the Boston offense would give him will balance out the hit his ERA would take. Could be he's betting that success in the big spotlight of the AL East will show other teams he's not a flake.

If this deal does happen, it wouldn't surprise me to see the Sox play more luxury tax games like they did with the Beltre and Scutaro contracts. Say, $12M for one year with a $6M player option making the AAV $9M. A guarantee of $18M would also help mitigate some of the risk for Jackson turning down a "true" multi-year deal.

That doesn't mean you're worse off with the person who will be less valuable than Jackson and the $15M+ you'd be paying Jackson than you would be if you commit to Jackson for multiple years.

I'm just saying you don't not sign him b/c your projected rotation is "full". Projected rotations never work out.

I wouldn't give Jackson $15M per either, but if you can come to an agreement at a price you like (e.g. 3/36) you do it, b/c he makes you better now, and probably in '13-'14 as well.

I'm just saying you don't not sign him b/c your projected rotation is "full". Projected rotations never work out.

It's not so much that the projected rotation is full, but that they'd rather not fill it with Edwin Jackson at a free agent multiyear salary.

He's a ~3 WAR starter. They have a decent chance of turning either Aceves or Bard into the same, which would be a much better deal financially. While they could simply decide now not to pursue that plan, and sign Jackson long term, it's worth finding out if they can make it work. While Jackson is good, he's not block-your-options good. And if it doesn't work out with Bard/Aceves, well, there are plenty of better ways and opportunities to fill the 2013-14 rotational hole besides Jackson.

I agree with you, if they can sign him multiyear to a value contract, they should. As a free agent, however, is he more likely to sign a 1-year deal for market value, or a 3-year deal at a steep discount? Though neither seems likely, I'm guessing the former.

He's a ~3 WAR starter. They have a decent chance of turning either Aceves or Bard into the same, which would be a much better deal financially.

I don't know hoe decent the chance is, but signing Jackson doesn't preclude it. Every team uses 6+ SPs.

You make Jackson the #4, Bard the #5, you work Aceves as an SP in ST, and, if everyone is healthy on opening day, he starts the season as the long reliever. When someone in the rotation gets hurt, or Bard proves he's not a SP, you go to Aceves.

There's virtually no chance you don't get Aceves 100+ IP as a SP in that plan.

I think it's a matter of resource allocation. Without looking up the specifics the Sox should have about $60-$70 million locked into Lester-Buchholz-Beckett-Lackey-Bard for 2013. If you're the Sox do you spend $10-$14 million more on Jackson or do you trust your ability to augment that with Aceves/Ranaudo/scrapheappickup and allocate funds toward the bullpen/lineup?

Alex Speier ran the numbers yesterday and has the Red Sox currently sitting at about $185M so I think we can put any talk of Boston operating under a hard cap to bed.

Alex Speier ran the numbers yesterday and has the Red Sox currently sitting at about $185M

that can't be true, karlmagnus and Dan Shaughnessy told me that the Sox were going to be low-payroll cheapskates because of John Henry's hedge fund and a soccer team and blah blah blah....

I don't know hoe decent the chance is, but signing Jackson doesn't preclude it. Every team uses 6+ SPs.

True, signing Jackson doesn't preclude it. But somehow 29 teams manage to do it without Edwin Jackson.

I think we're on the same side on the basic issue - if they can get a good deal go for it, if not don't. What I'm emphasizing is that I don't think the Red Sox are looking at this as a Jackson vs. not Jackson decision, but rather Jackson vs. 1000 different options. Many of those options have less downside to the team than locking in Jackson now for a few years at a free agent level salary. I'm suggesting the fact that they'd prefer to sign Jackson for the one year - 2012 - that they're confident they have a need is not necessarily a sign of a hard cap in 2013, that it could simply be a sign that they'd like to keep their options open for 2013 and beyond rather than commit to Jackson. The fact that they'd prefer to sign this one guy to a one-year deal is, to me, not compelling evidence of a hard cap.

This team has a new GM. He's gone a different way than expected in hiring a manager, so different that it's been suggested he had no say in the decision. He's gone a different way in the staffing of the medical department, overhauling the staff but also restructuring it, which seems an obvious move to Therapudlians here but yet didn't happen under the prior GM despite being so obvious back then. He's gone a different way on Daniel Bard, on Alfredo Aceves, on Marco Scutaro, and appears to be going a different way on Edwin Jackson, leading to suggestions ownership has commanded him to take on a different salary structure for the roster. At this point, I'm suggesting a new theory for why Ben Cherington is moving in a different direction than we've come to expect: he's actually a different person.

Well, it looks like Oswalt is going to the Cards. Which leaves Jackson and not much else on the market.

They can always trade Middlebrooks for Gavin Floyd.

Well, it looks like Oswalt is going to the Cards.

Or the Rangers.

An interesting note on the Sox rotation. A poster at SoSH called Hairps has been tracking Matsuzaka's reported rehab in Japan, and apparently Dice is already throwing bullpens and feeling pretty good. That would put him on track for an MLB return before the All-Star break, possibly even in May.

I wouldn't want the Red Sox front office to be counting on Matsuzaka to return and be effective, but having a possible Matsuzaka return on the horizon would make it easier to go into spring with Bard/Aceves/Doubront and the misfit toys in AAA as your 4/5 starters.

A poster at SoSH called Hairps

Hairps! How quickly we forget.

EDIT: That aside, I suppose this means Matsuzaka is in the best shape of his life?

With the Red Sox interpreting the Luxury Cap as a Hard Salary Cap, I think the "significant compensation" from the Cubs for Theo's release should be Theo taking John Lackey's contract with him to Chicago. Shouldn't that free up salary flexibility to sign Oswalt rather than counting on misfits in the rotation?

Henry sez:

"The discussion seems to be centered around (the idea that) we're not spending enough money,'' Henry said. "We have the second-highest payroll in baseball. How are we done (spending)? This year, 2012, we have the second-highest payroll. Does that mean we're not spending?"

Lucchino said the franchise collectively "has something to prove in 2012" and is not done spending on its roster.

"Maybe we should be direct about this: Our payroll is going to be in the $190-plus million range," Lucchino said. "I'm pretty confident in saying that if you look at it the way we do, you'll see that. That's a gigantically large commitment because there's a gigantically large commitment to winning in this organization. If we haven't proven that to you in 10 years, shame on us."

Shoulda posted that in the "Plan and the Payroll" thread, but what's done is done. That should silence the "OH NO! They're only gonna spend $178 Million! They don't want to go over the threshold!" garbage.

Also, I love John Henry.

Alex Speier at WEEI - who else - has what looks like the definitive explanation of the new luxury tax / revenue sharing structure.

The motivation of both the Sox and Yankees to get under the $189 million figure by 2014 is not just driven by the luxury tax. Both teams have shown repeatedly that they are willing to pay a premium for expenditures beyond the threshold for the competitive balance tax in any given year. The Sox and Yankees were the only two clubs hit with tax bills in 2011, with New York paying $13.9 million and the Sox popping $3.4 million into Major League Baseball’s Central Fund.

But while both teams are hoping to avoid the stick (and by 2014, if neither team gets under the luxury tax threshold prior to that season, they would be penalized at a rate of 50 percent for all spending over the $189 million threshold), they are also motivated by a carrot. Indeed, the carrot might be one of the most significant components of the new CBA.

Teams that play in the top half of market sizes will no longer be eligible to receive revenue sharing money. To date, clubs such as the Blue Jays and Nationals that operate in major markets have nonetheless received money from teams such as the Yankees and Red Sox based on the amount of revenues trickling into the club. Going forward, that will no longer be the case.

That money will be rebated to the clubs that are currently paying into the revenue sharing pool — but only if they are below the luxury tax threshold. So, by 2014, teams such as the Yankees and Red Sox will face the possibility of a refund of some of the money they plow into revenue sharing — but only if their payroll falls below the threshold of $189 million in 2014-16, the final three years of the current Collective Bargaining Agreement.

So, what the Sox and Yankees are attempting to access by getting their payrolls under the cap is not the entirety of revenue sharing disbursements. Rather, of the ~$450M redistributed by revenue sharing, a small percentage of that each year will probably not be re-distributed, if the teams which were eligible to receive it came from the largest markets. That money - the money which is not redistributed, a small portion of the ~$450M typically redistributed now - would then be rebated to the revenue sharing payors. However, that rebate will be made only to revenue sharing payors who have kept their payroll under the luxury tax threshold.

I can't find a record of how much revenue sharing money went to the Jays or Nats last year, my guess is not terribly much, but I wouldn't be surprised if the potential refund for the Sox or Yankees gets up toward $5-10M, and that's enough to make the luxury tax quite a bit more punitive. If this report is correct, and if some large-market clubs remain net recipients of revenue sharing dollars, it seems pretty likely that the Sox won't merely be trying to get under the cap as a one-time thing in 2013 or 2014, but that they'll be looking to get under the cap with regularity.

"Maybe we should be direct about this: Our payroll is going to be in the $190-plus million range," Lucchino said. "I'm pretty confident in saying that if you look at it the way we do, you'll see that."

I have the Red Sox 25-man roster (plus DL) payroll at $170M. I expect the Sox will add to this over the season - Padilla and Cook, for instance, will make $1.5M apiece if they make the major league roster, and the Sox are likely to make a trade or two if they are in contention. If you calculate payroll normally, based on the money spent on the MLB roster, the Sox are unlikely likely to get up to $190M or "the $190M-plus range".

If you calculate payroll based on the luxury tax methodology, you add another ~$14M for 40-man roster salaries, medical costs, and other miscellaneous costs. (You also lose about $2M from the simple addition-of-actual-salaries calculation, since the long-term contracts for guys like Lester, Youk, and Pedroia pay out more in 2012 than their AAV.) That puts the Sox at about ~$180M now, likely to get up to the mid-180s over the season, which is "in the $190M-plus range" if you want to round up to the nearest decade and don't get too stroppy about the "plus."

So, Lucchino's statement is probably based on luxury tax payroll calculations - that's why he says, "if you look at it the way we do." Typical discussions of payroll do not include those extra $14M, and I think it's better to say that the Sox payroll is going to be "in the $175M range."

I'm not complaining about a $175M payroll - that should be more than enough for any fan, and it is right in line with the club's payroll in the last two seasons. That can't be fairly characterized as "cheap." But Lucchino's fudging the numbers slightly, both by using an atypical method, and then by rounding up just a tad.

EDIT: If the Sox luxury tax payroll ends up at, say, $187M, they'll pay a luxury tax of ~.4*(187-179) = ~$3.5M. That's how you get to "plus" - by adding in the luxury tax payments to the luxury tax payroll number.

If you calculate payroll normally, based on the money spent on the MLB roster, the Sox are unlikely likely to get up to $190M or "the $190M-plus range".

If they don't sign Roy Oswalt. I've been assuming this is unlikely, so this is more of a clarification of your message than a refutation. Any message with "unlikely likely" probably could use some clarification. ;-)

TINFOIL HAT TIME! Hey, you know all those times the Red Sox didn't reach a contract extension with someone, but then magically they do after opening day, when luxury tax payrolls are set? Perhaps they've essentially arranged for something similar with Oswalt. This gives them the ability to avoid the opening day penalty, while also maintaining the opportunity (or appearance thereof) to evaluate the others' chances for a future starting role.

Yeah, I don't believe it either.

TINFOIL HAT TIME! Hey, you know all those times the Red Sox didn't reach a contract extension with someone, but then magically they do after opening day, when luxury tax payrolls are set? Perhaps they've essentially arranged for something similar with Oswalt. This gives them the ability to avoid the opening day penalty, while also maintaining the opportunity (or appearance thereof) to evaluate the others' chances for a future starting role.

The opening day penalty only applies to long-term contract extensions, like those for Buchholz and Gonzalez. The Sox paid luxury tax only on Buchholz's and Gonzalez's 2011 one-year deals, not on their much pricier extensions. If the Sox signed Oswalt for 2012, they'd still have to pay the full luxury tax on the AAV of that new contract.

Lucchino's fudging the numbers slightly, both by using an atypical method, and then by rounding up just a tad.

Hard to believe that I find myself defending Lucchino, but if your analysis is correct then the reality is that he's actually using the right method and we fans typically use an incorrect one.

The opening day penalty only applies to long-term contract extensions, like those for Buchholz and Gonzalez. The Sox paid luxury tax only on Buchholz's and Gonzalez's 2011 one-year deals, not on their much pricier extensions.

Which means it's not really a penalty. It's just a pay me now or pay me later thing, right. The AAV on those deals is higher than it would have been with last season included.

I'll believe the Red Sox will reverse their rate of payroll growth and the Yankees will dramatically slash their payroll when it actually happens. Under the new CBA, if you don't spend it on the roster, there's nowhere else to spend it -- they'll be looking at ~7M budgets for the draft and international combined. So either Henry, the Steinbrenners, and friends just pocket the extra cash or they start ignoring the rules and taking the penalty. As a fan, I know which one I would rather see. As businesses, I think big market teams will see there's more money to be made from playoff and World Series runs than revenue sharing rebates.

Like campaign finance, the money will find a way through, regardless of what barriers you erect. I think you'll continue to see teams operate over the luxury tax limit, and maybe even give up first round picks and pay a 100% tax to spend what they want in the draft.

Hard to believe that I find myself defending Lucchino, but if your analysis is correct then the reality is that he's actually using the right method and we fans typically use an incorrect one.

I don't really see why those extra $14M should be counted. We don't include all the other spending the club does - minor league contracts, draft spending, infrastructure, coaches, managers, etc. The "payroll" has historically been the amount of money paid in major league contracts to guys playing for the major league baseball team. It's a good definition, and Lucchino's mostly bucking it for PR reasons, not because of its objective quality as a descriptor.

(And, of course, we're talking abut minor differences and a minor PR play, none of this is a big deal and the Sox are running a very large payroll.)

I don't really see why those extra $14M should be counted.

Only because it counts toward whether you pay the tax and get the revenue sharing rebate. This disconnect is going to be pretty important for the next couple of years as legions of Yankee and Red Sox fans ignore the extra $14M when claiming that their team can sign players X, Y and Z and still get under the cap for 2014.

I think big market teams will see there's more money to be made from playoff and World Series runs than revenue sharing rebates.

But it's not just the rebate. There's also the tax reset. Say the Yankees have a $225M payroll for 2015 to 2017, the difference between being under or over the cap in 2014 would be more than $22M.