Why The BoSox Will Be Singing The Luxury Tax Blues This Offseason

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Fenway Park in Boston, Massachusetts is the setting for the tradition-rich Boston Red Sox. For the past 20 years or so, their fans have had the luxury of witnessing some of Major League Baseball’s biggest stars while taking in America’s favorite pastime en route to four World Series championships. That quest to provide the city with a competitive on-field product has forced large financial investment by the current John Henry-led ownership group, often pushing the franchise into the league’s luxury tax threshold, a place where team’s face stiff financial penalties for carrying an excessively-high payroll in regards to lower spending small-market teams. Now, with the offseason looming and a primary focus on slashing payroll, the team is facing an uncertain future and has quite the conundrum on their hands moving forward.

On Monday, Red Sox’ designated hitter J.D. Martinez declined to opt-out of his current, five-year/$110 Million contract. The move makes sense for the aging, position-less hitter who was faced with the reality of entering a free agent market that hasn’t been so kind to those players the past few years. With three years and $62.5 Million remaining, the price of keeping one of baseball’s best hitters (Martinez) could prove to be costly and may have Boston’s biggest star packing his bags and purchasing a ticket from Logan International Airport.

What Does The Future Hold For Mookie Betts?

Now that Martinez has decided to opt into the remaining years on his contract, the team has been slapped with a $22 Million financial obligation for this upcoming season. This is not great news for the front office, who are expected to meet with outfielder Mookie Betts in salary-arbitration proceedings this winter. The team’s spark plug and leadoff hitter is expected to be awarded an estimated $27.7 Million for the upcoming 2020 season. 

After winning an American League MVP award in 2018 and four straight Gold Glove awards, the career 42.0 WAR (Wins Above Replacement) face of the Red Sox’ franchise is facing the possibility of being traded. With only this season remaining on his current contract, the speedster is set to test the market following the 2020 season. With no guarantee that Betts will re-sign, the team’s new Chief Baseball Officer Chaim Bloom will certainly field offers for the star and look to “kill two birds with one stone” by reducing payroll and netting prospects for a depleted Red Sox minor league system. 

Former Cy Young Winner Rick Porcello Is A Likely Financial Casualty

The team currently has $79 Million committed to its pitching staff in the form of oft-injured starters David Price, Chris Sale and Nathan Eovaldi for the upcoming season. The unit is an enigma without a reliable fifth starter and is likely to lose 2016 AL Cy Young winner Rick Porcello, whose contract expired after the season. Coming off the worst season of his career the pitcher will either be forced to re-sign a “hometown discount” deal or test the market while searching for likely “prove it elsewhere” one or two-year deal. 

After going 73-55 with a 4.43 ERA in five seasons with the Sox, the inconsistent Porcello isn’t in the position to command a deal similar to the four-year, $82.5 Million that he negotiated after being traded from the Detroit Tigers in 2014. Without his better-than-normal 2016, the aging pitcher hasn’t performed well enough to seek high-value compensation and is facing a crossroad decision of whether or not he would like to continue receiving his mail via a Boston postal code.

Dave Dombrowski’s Irresponsible Spending Will Have Long-Term Ramifications

Dave Dombrowski’s Irresponsible Spending Will Have Long-Term Ramifications

Former President of Baseball Operations David Dombrowski was abruptly fired this past summer, which was less-than one season removed from a World Series championship. The primary motivating factor certainly relates to the “bad” deals given to the pitching staff and the questionable Martinez deal. Yes, J.D. has been one of the top-performing hitters in the MLB over the last six seasons. However, he is aging and most hitters start seeing their decline in their thirties. 

The team’s payroll last season was $243 Million and their goal is to drop below the $208 Million mark this season. The team has gaping holes at first and second base and no financial means to find quality players to fill the voids left by the forever-injured Dustin Pedroia and departing Mitch Moreland. Also, longtime center-fielder Jackie Bradley is arbitration-eligible as well.

Where Does Boston Go From Here?

Despite having the largest payroll in baseball last season, the Sox finished the regular season as a slightly-better than mediocre team with a record of 84-78. They finished third in the highly competitive AL East division, and missed out on the playoffs. The rival New York Yankees are a loaded bomb-squad that shows no signs of slowing up in years to come, and the Tampa Bay Rays are annual challengers for the division title while operating at a small fraction of their adversaries’ cost by means of solid player development and bargain-bin free agent acquisition.

Losing Betts would be equivalent of the Red Sox losing their identity. However, something has to give for a franchise that has mis-stepped into a financial stranglehold. Either way you shake it, the talent is fleeting elsewhere while the Red Sox’ rivals are getting better. It’s likely that Boston will take a back seat moving forward until clearing the bad deals made by Dombrowski. Does Boston deal Betts and attempt to reload with an aging pitching staff, or should they attempt to deal Martinez and Price with hopes of decent prospect return?

No scenario is ideal and it’s likely to be a long winter for the franchise and it’s Boston faithful. As mentioned, they will absolutely be singing the luxury tax blues.