Payroll Analysis: Red Sox historical spending compared to the tax line
As of today, the Boston Red Sox carry a projected payroll just short of $225 million, according to my tracker and as broken down by Chad Jennings of the Athletic. The team is approximately $8 million away from the $233 million competitive balance tax threshold.
With less than two months before the team breaks camp for Opening Day at Fenway against Baltimore, the team surely would love to upgrade a few spots. This could come via a minor trade, a late free agent signing, or by adding a player to the roster at the conclusion of the spring who they’ve already signed to a minor league deal that carries a major league salary should they make the team.
Examples of the latter option include catcher Jorge Alfaro (owed $2 million if he makes the team), outfielder Raimel Tapia ($2 million), or outfielder Greg Allen ($1.4 million).
Assuming Boston nudges closer to the first CBT line before Opening Day, it begs the question, how does spending compare to prior years as it relates to the CBT?
John Henry and the current ownership group purchased the team in 2002. That first season did not have a luxury tax threshold, as outlined in the 1996 collective bargaining agreement. Since then, this ownership group has overseen 21 seasons (including 2023) that have operated with at least one CBT threshold meant to penalize the highest-paying clubs.
The team has spent an average of 102% to the CBT threshold over that period, inclusive of where the current 2023 payroll sits. Over that period, the team went over the first CBT line 11 times, including the 2004, 2007, and 2018 championship seasons. Boston’s highest spending season in relation to the threshold was 2018 with 121%. The team bottomed out at 90% in 2009 and 89% in the COVID-shortened 2020 season which was also aided by David Price sitting out the season for the Dodgers.
Boston’s is one of only 12 clubs to have ever paid the penalty, and their 11 tax-paying seasons rank second only to the Yankees in that time period between 2002–2022. The only other team to exceed the tax more than three times is the Dodgers (seven times).
In the early years of the CBT, other than the lone tax-paying season by the Angels in 2004 and Detroit’s first foray beyond the limit in 2008, the list of payers was dominated by the mid-2000s arms race between the Red Sox and Yankees who made up 16 out of 18 tax exceeders from 2003 through 2012.
There’s been a lot of eyeballs on Boston’s payroll situation going back to 2019 following the last World Series team. That season was when it started to become evident Mookie Betts may hit the trade block as the team was rumored to have the desire to dive under the tax line for 2020 to “reset” their multiple-offender penalties that were harsher under the 2016 CBA than prior agreements. Looking specifically at that time period and projecting 2023 using current pre-Opening Day payrolls, the list looks a lot more democratic than the overall taxpayer rundown in the modern CBA time frame thanks to recent spending sprees by San Diego, Steve Cohen’s fighting Metropolitins, Philadelphia, Toronto, and Atlanta’s extension blowout plan.
The feeling among Red Sox nation that the team is no longer flexing its financial advantage is a complicated notion at best. On one hand, the team carried a record final payroll during the 2018 title run at $239 million, a number they beat the following season in 2019 at $244 million but have not approached since. On the other, this ownership group has both a track record and a sustained record of spending up to and beyond the tax limit to achieve success (four titles in 21 years).
It’s not that the team is not spending or spending competitively. It’s likely a combination of other optics that has fans disillusioned with team-building, some meaningful and some not so meaningful. Losing cornerstone players like Xander Bogaerts and Mookie Betts hurts big time, especially when we’ve ridden the wave over two decades of being a “big dog” in the free agent and total dollars game.
As we soldier on into the coming weeks and into the 2023 season, if the team surprises and clicks together, you can be sure the front office will be willing to surpass the tax to add reinforcements for this team if they feel could have a shot to win a World Series. That said, it could be difficult with the number of playoff spots to ascertain if the team is for real or likely to peter out late into the campaign.
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