Payroll Analysis: 2024 Red Sox Early Look

Following the history of the last few years, Boston’s payroll figures to rise significantly in 2024.

The 2023 season is only 35% complete, but looking ahead at 2024 can help understand strategy and decisions by the front office over the coming months ahead of and immediately following the trade deadline.

I’ve mocked up the 2024 payroll in the payroll tracker sheet. As an early first projection, if the following months play out with known information and reasonable expectations, the team would have ~$201MM committed to next year’s team. The first threshold of the CBT is $237MM which means Boston would walk into the winter with only $36MM to spend before hitting that mark.

However, assessing the “budget” is more complex than that. Looking at the behavior of teams across the league over the last few seasons, the ebb and flow of spending have followed recent penalties put in to encourage high spenders to “reset” the tax every so often. You can read more about that here, but put simply, each consecutive year a team exceeds the first threshold, the higher the tax penalty (20% / 30% / 50%). This is also true at the second threshold, which in 2024 is $257MM (12% / 42.5% / 60%). There are also nuances for lost and decreased pick values.

In addition, the highest two payrolls the team has ever carried were in 2018 ($239MM, won World Series) and 2019 ($244MM, attempt to defend title). The next two largest payrolls were last year ($236MM) and this season (~$225 as of this writing). A more detailed history can be found here.

All of that is to say, if this 2023 Red Sox team doesn’t exceed the $233MM CBT line, there’s both history and precedent to suggest given the right strategic opportunities to invest in talent, the club could push into the 2018/2019 territory or higher given a healthier base of young talent to build on top of.

So, how do we mock up a 2024 payroll? A series of assumptions:

1. Assume retention of guaranteed contracts (fungible based on trade activity) and team/player options likely to exercise (four such decisions this winter). In this exercise, Justin Turner would pick up his player option. This adds him to a total of nine locked-in contracts, plus a $740k roster hold for Eric Hosmer as per the terms of his summer 2022 trade from San Diego.

2. Project arbitration for those eligible (five projected cases as of this writing). Granted, this can fluctuate with how much time is left between now and January. MLBTradeRumors does a great job at estimating this each winter but in the absence of that, Alex Verdugo gets a nice raise here while four other players receive modest raises in line with prior cases.

3. Assume renewal/agreements with pre-arb players based on 2023 outcomes (players with 0–3 yrs of service time). Normally, teams work out slight raises with players early in the spring to the tune of $20k-100k above the league minimum. With the rise in the minimum salary, this may be more conservative but the end result will be pretty close.

4. Use projected performance and redundancy to assume the removal of some players (declined options, designated for assignment, etc.). Here, we would see the Sox decline options on Corey Kluber, Joely Rodriguez ($500k buyout), and Richard Bleier ($250k buyout), then trade, DFA, or elect not to offer a contract to Nick Pivetta, Pablo Reyes, Kaleb Ort, Bobby Dalbec, and Christian Arroyo. (For those playing armchair GM alongside me, use your imagination to swap pieces in and out here. This is a mock-up, not a crystal ball.)

5. Remove the contracts of your own free agents. For now, let’s assume the team doesn’t re-sign its four free agents: Kiké Hernandez, Adam Duvall, Aldalberto Mondesi, and James Paxton. (Feel free to mentally re-sign them at the end of the activity, should you so choose.)

6. Factor in yearly recurring expenses and holds. These include additional 40-man cash, bonuses, incentives, medical, and the pre-arbitration bonus pool. This totals a hefty ~$35.17MM against the CBT.

From here, Boston would enter the winter with 32/40 used 40-man roster spots, a large need for high-end starting pitching, the need to take another stab to find impact help up the middle, a likely desire to enhance the bullpen (hello, lefties) and anything else Chaim Bloom and company want to attempt.

So what happens next?

For the rest of 2023, it’s likely this front office needs to balance on-field performance with what this team is realistically able to accomplish (Sell off? Playoffs? World Series?) and the need to solidify what they have for 2024 to use this money. Questions need to be answered no matter what, such as:

1. What do we have in our young players, really? Guys like Casas, Duran, Bello, Winchowski, Crawford, Houck, Whitlock, and Wong would make up a very affordable base on which to build, but only if you can feel good about what they’ll offer next year to avoid hedging with expensive options behind them (or instead of).
2. If we fall out of the hunt by July, can we flip veterans for more future help? Vets like Kiké, Duvall, Turner, Paxton, Rodriguez, Arroyo, Chang could all be had to boost the farm (hello, Emmanuel Valdez and Wilyer Abreu).
3. Who else is ready to “pop” during the 2024 campaign to help this team win? Lots of intrigue here. Bryan Mata is out of options. Shane Drohan is looking good. David Hamilton and Abreu have shown flashes in Worcester. Marcelo Mayer and Nick Yorke are trending upwards. Ceddanne Rafaela’s glove is ready, but will be bat get there?
4. Does anyone warrant an extension? Verdugo has said he wants one. Some of the young players could be game if there’s a good midpoint to be found.

Beyond this season, it’s wide open. Predicting trades is nearly impossible, especially with this front office. That said, strictly looking at available dollars it would be feasible to expect this to be the winter the gloves come off and the splashes are made to make this a unit fans will be thrilled to get behind. Whether that’s a top-end free agent or two, or three (check out MLBTradeRumors’ fantastic tracker), or a blockbuster trade (take a peak at the always stellar SoxProspects.com projected rosters for a visual of needs and depth for next year), the team can go big if they so choose.

It would not be out of the realm of possibility to see the overall expenditures push past $240–260MM with the inflation of contracts in the game in the last few years. That would give the club around $40MM–$60MM to work with, with no hard cap, per se.

With numbers on paper, time to dream. What can be done with a better farm system and the largest possible off-season war chest of the Bloom era? That’s to be seen. Between now and then, consider 2024 in the moves this team makes. If it’s decided this team is not a contender, expect the team to shift into question-answering mode with an eye toward the above.