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Monday, September 19, 2022

New York Mets have top payroll; record six teams set to pay luxury tax

The Mets are in line for a tax of $29.9 million, Midseason trades boosted their tax payroll from an opening-day projection of $289.3 million and past the new $290 million threshold in the March agreement that ended a 99-day lockout.

The Dodgers opened this season with a $310 million tax payroll, on track to pay a record penalty of $47 million. Their tax payroll dropped to $289.96 million by Aug. 31, leaving them just under the Cohen Tax. With higher tax rates as a repeat offender, the Dodgers are on track to pay $29.4 million.

The Yankees have a tax payroll of $267 million and a projected tax of $9.4 million, and the Phillies at $243 million would owe $2.6 million.

Boston, just over the first threshold at $234.5 million, would owe about $900,000. After paying tax for the first time last year, San Diego is a second offender with a payroll of about $233 million and a tax of just over $800,000.

This year’s four tax thresholds are $230 million, $250 million, $270 million and $290 million.

RoyalsRetro (AG#1F) Posted: September 19, 2022 at 02:52 PM | 35 comment(s) Login to Bookmark
  Tags: luxury tax, mets

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   1. Walt Davis Posted: September 19, 2022 at 04:52 PM (#6096921)
Per Sportrac, the O's are at $43 M and the A's at $48 so the Mets and Dodgers tax bills come to about 2/3 what the cheapest teams are paying overall. Not that things are out of whack ...
   2. Pat Rapper's Delight (as quoted on MLB Network) Posted: September 19, 2022 at 06:14 PM (#6096931)
Boston, just over the first threshold at $234.5 million, would owe about $900,000.

Good to see the team is getting their money's worth this season.
   3. KronicFatigue Posted: September 19, 2022 at 06:17 PM (#6096933)
How much will Alonso make out of arbitration (or, more likely, an extension that eats these arb years). I don't see many viable options for the Mets' payroll in '23 other than "blow it up" and "f it, go all in"
   4. John Northey Posted: September 19, 2022 at 07:18 PM (#6096940)
So how are those rich teams doing?
Mets: #1 in NL East by 1 over Atlanta
Dodgers: #1 in baseball by a mile
Yankees: #1 in AL East by 5 1/2 over Toronto
Boston: #5 in AL East 4 games under 500 and not in the wild card hunt
Philadelphia: 3rd in NL East, 12 back of the Mets, have the 3rd WC right now, but just 2 up on Milwaukee, 1/2 a game behind SD for the 2nd WC, 11 behind Atlanta for the top WC

So Boston and Philly aren't getting value I'd say, but the Mets/Dodgers/Yankees are overall. Mets have another year of paying Robinson Cano $24 mil, with Edwin Diaz the only $10+ mil contract that comes off the books this winter (free agent). So I fully expect them to go well over $300 mil next year by signing Aaron Judge (I'd be surprised if they don't put an all out effort in to steal him from the Yankees - need is irrelevant, this would be a 100% ego move). Dodgers have a big one coming off in David Price (half paid for by Boston), Trea Turner is a free agent, as is Kershaw, Kimbrel, and Gallo all over $10 mil this year (plus assorted others sub $10 mil). I expect the Dodgers will see their payroll increase to replace those guys or resign them (outside of Price who is retiring).
   5. Walt Davis Posted: September 19, 2022 at 07:20 PM (#6096941)
Alonso (somehow) made only $7.4 this year, his first arb year. This year has been a bit worse than years 1 and 3 in terms of WAR, worse than year 1 in terms of HR, a great RBI year though. Not sure how well RBI are paid in arb these days. Anyway, to more than double your first arb probably requires something close to an MVP year which this doesn't seem to be ... I'll WAG him around $12. Mainly I'm surprised the first one didn't cost more than $7.4.

I don't think there's that much chance of a buyout. One that is a strict buyout (say 2/$27) just to give some cost certainty to both sides is certainly possible and maybe that's what you had in mind. Otherwise, he'll be turning 30 when he becomes an FA so he's only gonna get one big contract. Unless the Mets are willing to offer something like 8 years right now, there's no reason for him to contract for any FA years. If the Mets are shy of long-term commitments, they could try something like 2 arb years, 2 FA years for $100 M (2/&70;-75 for this first 2 FA years).

Alonso is a fairly big name and a very fine player and so far durable. But it's still "just" 4 WAR per year. That about 1 win behind Freeman, closer to 2 behind Goldschmidt. He's more Kris Bryant (though Bryant is certainly no longer durable). Regardelss of where you put him on that spectrum, those guys are on $26-27 AAV contracts. Unless he turns into Judge or at least starts winning real HR titles again, Alonso is not on pace to make BIG money.
   6. Walt Davis Posted: September 19, 2022 at 07:59 PM (#6096950)
#4 ... ya never know if it actually mattered but, since firing Girardi, the Phils are 58-37 which is just over 600 so they might be getting their money's worth out of their payroll.

I haven't looked at the Phils page in a while ... man Realmuto is having a monster season, 126 OPS+, 5.5 WAR. Rutschman might not quite be the best C in the game yet. Alec Bohm has turned things around from a 632 OPS in late June and 831 since (granted on a 359 BABIP). Harper has hit when healthy. Nola's having a nice season and Brad Hand has bounced back. It's hardly a stacked team but it's a Lake Wobegon team, espcially since they ran the guys who stink out of town.
   7. Steve Balboni's Personal Trainer Posted: September 19, 2022 at 08:49 PM (#6096968)
It is pretty crazy how little value the Red Sox are getting for all the money they are spending this year, until you realize that they are paying $63m to get 105.1 innings, combined, out of Sale, Eovaldi, and Price.

That, combined with the evisceration of the farm system, left the Red Sox entering 2020 with a ton of money providing little-to-no value, combined with very little cheap new talent to fill the holes from the system.

Chaim Bloom was given the directive:
1) Get rid of whatever crappy contracts you can;
2) Rebuild the system; and
3) Try to make the team good enough in the process that the fans won't get too upset.

People forget that when the Red Sox traded Betts, they didn't just get Verdugo and Downs - they also got rid of much of Price's contract. That was a big part of the deal.

And Sale and Eovaldi were given lucrative extensions (in effect, extensions) under Dombrowski. In fact, the only way the team could trade Sale and his 2 yrs/$55m left on his contract is if they did with him what they did with Price: Trade him with a valuable young asset (like Devers this off-season) in order to finish getting all the big wasted money off the books.
   8. The Yankee Clapper Posted: September 19, 2022 at 09:26 PM (#6096982)
Mets have another year of paying Robinson Cano $24 mil, with Edwin Diaz the only $10+ mil contract that comes off the books this winter (free agent).
Jacob deGrom intends to opt out, although the Mets seem likely to offer him more $$ & years in a new deal.
   9. snapper (history's 42nd greatest monster) Posted: September 19, 2022 at 10:05 PM (#6097000)
People forget that when the Red Sox traded Betts, they didn't just get Verdugo and Downs - they also got rid of much of Price's contract. That was a big part of the deal.


But it's a useless part of the deal if you run a $235M payroll and finish in last. They could have just ate Price's contract and kept Betts.
   10. The Duke Posted: September 19, 2022 at 10:39 PM (#6097008)
So, something like $80 million in penalties. Where does that money go? Charity ? The lowest spending teams ? Fund the pension?

It seems the overspending really works. You can see how the top 5 can add all kinds of marginal value (like scherzer) to really goose their results vs the teams more in the middle.

For a while, it seemed they spending slightly more had no impact but when teams are spending 2X more than the middle teams and 3X more than the cheap teams, they are going to win a lot of games.
   11. John Northey Posted: September 19, 2022 at 11:11 PM (#6097016)
Via a quick search the money is split up...
The first $13 million will be used to defray clubs' funding obligations under the MLB Players Benefits Agreements.
Of the remaining sum, 50% of the remaining proceeds collected for each Contract Year, with accrued interest, will be used to fund player compensation as described in the MLB Players Benefits Plan Agreements and the other 50% shall be distributed to clubs that did not exceed the Base Tax Threshold in that Contract Year.
   12. Walt Davis Posted: September 20, 2022 at 12:38 AM (#6097019)
But it's a useless part of the deal if you run a $235M payroll and finish in last.

You say "useless" but Red Sox owners say "10s of millions more dollars in our pockets." English is funny that way.
   13. Captain Joe Bivens, Pointless and Wonderful Posted: September 20, 2022 at 07:02 AM (#6097022)
No one has a pocket big enough to fit tens of millions of dollars. You'd need a lot of pockets to fit it all.
   14. Pat Rapper's Delight (as quoted on MLB Network) Posted: September 20, 2022 at 09:53 AM (#6097031)
No one has a pocket big enough to fit tens of millions of dollars. You'd need a lot of pockets to fit it all.

"Challenge accepted!" -- John Henry.
   15. Steve Balboni's Personal Trainer Posted: September 20, 2022 at 10:32 AM (#6097035)
But it's a useless part of the deal if you run a $235M payroll and finish in last.


Price had $96m left on his deal, and the Dodgers and Red Sox split it as part of the deal. As a fan, it is not very fulfilling to see the return on Betts as an average left fielder, a backup infielder, and $48 million in savings from the Price deal, but it looked familiar: It reminded me of the Nick Punto trade in 2012, where the Red Sox basically got a bunch of "eh" prospects and utility players in exchange for Beckett, Adrian Gonzalez, and Carl Crawford. It was never about the talent being exchanged; it was about the money.
   16. SoSH U at work Posted: September 20, 2022 at 10:41 AM (#6097039)
You're coming dangerously close to defending that POS deal, SBPT.
   17. jmurph Posted: September 20, 2022 at 10:45 AM (#6097040)
You're coming dangerously close to defending that POS deal, SBPT.

Listen anytime you can use a beloved future Hall of Famer in his prime to clear out a bad contract you've simply got to do it, this is Teambuilding 101.
   18. Nasty Nate Posted: September 20, 2022 at 10:59 AM (#6097041)
Yeah, #15 is too far. The Punto trade was magnificent and unique; the Betts trade was commonplace sludge.
   19. snapper (history's 42nd greatest monster) Posted: September 20, 2022 at 11:06 AM (#6097043)
You say "useless" but Red Sox owners say "10s of millions more dollars in our pockets." English is funny that way.

If they want to maximize profits, why run a $235M payroll? The useless part is to run a high payroll and still suck.
   20. Steve Balboni's Personal Trainer Posted: September 20, 2022 at 11:44 AM (#6097046)
Woah! I do not support the Mookie deal, nor have I ever. When you get a generational player, you try to keep him, especially when they are just finishing their age 26 season. Although Devers is not as valuable as Betts, I fear the Red Sox may be heading down a similar road with Devers. They are waiting too long to get a long-term deal done, as they did with Betts, and once the player gets within a year of FA, the risk of waiting one more year to get to the open market is sufficiently low, so they just wait it out. The Braves seem to get this better than most, as do the Rays. Boston sort of did this with Whitlock - but that's about the only example of them doing it in recent history, IIRC.

The only comparison I'm making between the two deals is that they were clearly done with a priority on the finances, not the talent.

The Punto deal was amazing because it involved getting rid of a ton of money due to a bunch of guys who were heading in the wrong direction, whereas the Betts deal involved getting rid of a 26-year-old MVP who the fans loved.

   21. jacksone (AKA It's OK...) Posted: September 20, 2022 at 12:00 PM (#6097047)
but it looked familiar: It reminded me of the Nick Punto trade in 2012,


Gonzalez - 6 years $133 million
Beckett - 2 years $31 million
Crawford - 5 years $105 million
Punto - 1 year $1.5 million
Cash to the Dodgers - 3 years $3.9 per year
$282 million saved...

For - a bunch of prospects that didn't really pan out (although they had some success with secondary trades) and the last few months of James Loney's $6M contract.

vs

Price - 3 years $96 million
Cash to the Dodgers - 3 years $16 per year
MOOKIE ####### BETTS
$48 million saved...

For - two prospects that are not looking so good, and a cromulent 2 WAR outfielder who has value while he's in arbitration.


   22. Steve Balboni's Personal Trainer Posted: September 20, 2022 at 01:34 PM (#6097058)
In response to #21, we may all disagree with the Red Sox management team, but they thought that either:

1) Betts wasn't going to re-sign with the Red Sox, period, or
2) they thought it would take such a big number to re-sign him that they couldn't go there (in part because of all of the other money committed already).

We can disagree with this, or we can even agree with them, believing if Dombrowski had prioritized locking up Mookie back in 2017 or so that none of this would have ever happened. Regardless, the management team was putting this in their calculation. Nobody thinks the team wanted to get rid of Betts for an underwhelming package of players, right? It was about the money.
   23. DFA Posted: September 20, 2022 at 01:51 PM (#6097064)
lol @ #17
It seems the overspending really works. You can see how the top 5 can add all kinds of marginal value (like scherzer) to really goose their results vs the teams more in the middle.


I don't know, maybe? I think you would have to look at more than one season to draw this conclusion. I know that for a generation there has been a thought that teams are better valuing a player's contributions, but then you still see Javier Baez and his sub 300 OBP getting $140M. It's also true that my team (the Orioles) have a joke of a payroll and are having an amazing season, though reaping the rewards of being terrible for so long and paying pennies on the dollar for Rutschman.
   24. DFA Posted: September 20, 2022 at 01:55 PM (#6097065)
The first $13 million will be used to defray clubs' funding obligations under the MLB Players Benefits Agreements.
Of the remaining sum, 50% of the remaining proceeds collected for each Contract Year, with accrued interest, will be used to fund player compensation as described in the MLB Players Benefits Plan Agreements and the other 50% shall be distributed to clubs that did not exceed the Base Tax Threshold in that Contract Year.


So that is roughly $39M divided up amongst the 24 teams that did not go over the limit, or $1.5M per club. Not Material, Not Investigated...
   25. Walt Davis Posted: September 20, 2022 at 07:08 PM (#6097164)
Price - 3 years $96 million
Cash to the Dodgers - 3 years $16 per year
MOOKIE ####### BETTS
$48 million saved...


If you're gonna calculate it that way, you have to add in Mookie's $27 M arb salary for 2020. Of course all that 2020 money got discounted but that's just bookkeeping. Doesn't really make the deal any better but makes it more "useless" for Sox ownership.

As we're all implying, the question usually not asked by the media is "OK, so how are these savings going to be spent or are they just going in your pocket?" Such "savings" are almost never spent in the immediate season. It's difficult to prove that they were or weren't used in future seasons -- assuming the team's payroll was sustainable then we'd at least want to see increased payroll in the following seasons ... but I'm not sure we've ever seen that. Of course ownership could just claim "but the revenue streams have changed and without that deal, we would have had to cut payroll or not been able to sign so-and-so." What we can say about that particular deal is that the Red Sox didn't use those savings to extend ERod, X or Devers (maybe they refused). About the most the Sox might say is "hey, Eovaldi" or "we expected JDM to opt out" or "our bad for signing Sale."

Even going back to the Punto trade, it would be interesting to see where the money went. That was a lot of money saved but how much of it could be argued to have shown up in later payrolls?

Anyway, there's no fan value in payroll flexibility. There's only fan value when that flexibility is used to extend guys on hand or acquire new talent. And even that is really only fan value if they are moves the team couldn't have made without the extra money (which is hard to know with much certainty one way or the other).
   26. The Duke Posted: September 20, 2022 at 07:14 PM (#6097166)
24. It also defrays those same clubs' payments into benefit pools. The teams like pirates and rays make so much money .
   27. jacksone (AKA It's OK...) Posted: September 20, 2022 at 09:29 PM (#6097183)
If you're gonna calculate it that way, you have to add in Mookie's $27 M arb salary for 2020.


That money wasn't guaranteed, if the Sox didn't want to pay him, they didn't have to offer him arbitration.


Even going back to the Punto trade, it would be interesting to see where the money went. That was a lot of money saved but how much of it could be argued to have shown up in later payrolls?


They spent $75M of that in 2013 alone - they signed Ortiz $14M, David Ross $3.1M, Gomes $5M, Victorino $13M, Uehara $4.25M, Dempster $13.25M, Stephen Drew $9.5M, and Napoli $13M to contracts that off season, and they won the world series. It's not very hard to connect the dots.
   28. Nasty Nate Posted: September 21, 2022 at 09:41 AM (#6097265)
If you're gonna calculate it that way, you have to add in Mookie's $27 M arb salary for 2020.
That money wasn't guaranteed, if the Sox didn't want to pay him, they didn't have to offer him arbitration.
Nevertheless, it should still be included.
   29. Nasty Nate Posted: September 21, 2022 at 09:45 AM (#6097267)
Even going back to the Punto trade, it would be interesting to see where the money went. That was a lot of money saved but how much of it could be argued to have shown up in later payrolls?

They spent $75M of that in 2013 alone - they signed Ortiz $14M, David Ross $3.1M, Gomes $5M, Victorino $13M, Uehara $4.25M, Dempster $13.25M, Stephen Drew $9.5M, and Napoli $13M to contracts that off season, and they won the world series. It's not very hard to connect the dots.
And to add on to this thought, they also spent on Price, Hanley, Sandoval, Porcello, etc during the time frame of the Crawford and Gonzalez contracts.
   30. SoSH U at work Posted: September 21, 2022 at 09:50 AM (#6097270)
Nevertheless, it should still be included.


Then the cost of paying Verdugo should be as well. You know, if you're really worried about this level of completeness.

   31. Nasty Nate Posted: September 21, 2022 at 09:54 AM (#6097273)
Yes, it should.
   32. jacksone (AKA It's OK...) Posted: September 21, 2022 at 11:41 AM (#6097293)
If you're gonna calculate it that way, you have to add in Mookie's $27 M arb salary for 2020.


That money wasn't guaranteed, if the Sox didn't want to pay him, they didn't have to offer him arbitration.

Nevertheless, it should still be included.


No, it really shouldn't. If the Sox wanted to not spend $27M for Betts in 2020 then all they had to do was not offer him arbitration, or they could have traded him alone for a better package than they got. They didn't *have* to trade Price to take the onerous contract of Betts off their hands.
   33. Nasty Nate Posted: September 21, 2022 at 11:55 AM (#6097296)
True, the $27m wasn't guaranteed, wasn't a bad thing, and didn't need to be tied to a bad contract to be eliminated. It shouldn't be counted as a benefit of the trade. But it should be counted as an effect of the trade. Their payroll obligation was reduced, even if that portion could have been reduced in a bunch of different ways.
   34. jacksone (AKA It's OK...) Posted: September 21, 2022 at 01:53 PM (#6097321)
Their payroll obligation was reduced


Ah #### I am wrong. Looked at the timeline again, and Betts and the Sox had agreed on $27M in January, *then* was traded in February. I thought he was traded 1st.
   35. Walt Davis Posted: September 21, 2022 at 10:07 PM (#6097439)
They spent $75M of that in 2013 alone - they signed Ortiz $14M, David Ross $3.1M, Gomes $5M, Victorino $13M, Uehara $4.25M, Dempster $13.25M, Stephen Drew $9.5M, and Napoli $13M to contracts that off season, and they won the world series. It's not very hard to connect the dots.

First they didn't save $75 M in the first year of that deal. Second you have to show they would not have spent most/all of that money anyway. In 2012, Red Sox payroll (per Cot's) was $175; in 2013 it was $154. That $154 was also lower than 2010-11. Payroll didn't match 2010 (or 2012) payroll again until 2015. One can far more easily argue that reducing payroll from $175 to $154 then $156 put $40 M more in the owners pockets. Over the first two years, the Sox got out from under about $120 M (less if we incl the money they sent the Dodgers) and 1/3 of that went to the owners.

Or you could argue that with AGon still around then they don't sign Napoli and with Beckett around they don't sign Dempster but even with Crawford around they'd still have to sign Victorino. But AGon and Beckett cost only $37 M and their replacements cost $26 so that was only a savings of $11 M, call that enough for Victorino. That would mean they saved the total of Crawford's contract, about $21 M in year 1 -- which conveniently matches the reduction in payroll from 2012 to 2013. (Suggesting that Ross, Gomes and the other side pieces had no connection to this deal.)

But none of us sat in the rooms where these decisions were made nor have access to the Sox books. It's always possible they lose money with a payroll over $155 (the 2013 payroll) in which case yes the money spent on those guys you named and the money saved in not paying the other three pretty much balances out ... which means the $21 M reduction in payroll came from other FAs that left. But why ascribe that $21 M reduction to "natural" reduction due to attrition (i.e. the FAs who left) vs. "optional" attrition (i.e. the savings in Napoli/Dempster/Victorino vs AGon/Beckett/Crawford)?

What we can say with certainty is that the Red Sox traded away a lot of contract obligations AND cut opening day payroll by about 12%. It then stayed at that new level in 2013 but was, relative to 2012, 5% higher then 12% higher. If payroll had stayed at the 2012 level, they'd have spent about $700 M in 2013-16. They did spend about that amount all up. So one can say the flexibility paid off in 2015-16 ... although hidden in there is an assumption there was no inflation over that period (and no increase in revenue). For example, the Yanks spent about $30 M more 2013-16 than you'd prorate based on 2012 (but then made big cuts the next two seasons).

So that's what I mean when I say it's actually quite challenging to determine how payroll flexiblity was used.

And yes, in theory the Red Sox could have non-tendered Mookie which would have been even stupider than what they did and is not even a remotely believable option. So yes the $27 M saved on Mookie belongs in your accounting whether his last contract was before or after the trade. To be clear, that's a completely different situation than, for example, if they decide to trade Verdugo this offseason ... deciding to non-tender Verdugo because you don't think he's worth what he'll get in arb is a viable option.

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