Red Sox Are Over Luxury Tax Threshold

4:48pm: The Red Sox are operating under the same parameters that they always have and will make an acquisition if they feel that it could help them make the postseason, according to these tweets from ESPN's Buster Olney. 

12:34pm: Nick Cafardo of The Boston Globe reports that the Red Sox have learned within the last few hours that they have indeed exceeded the 2010 threshold for the competitive balance tax, better known as the luxury tax. They will be taxed at a 22.5% rate for every dollar spent over $170MM this year, and those figures will increase to 30% and $178MM next year, respectively.

Cot's Baseball Contracts, an unofficial source of salary and payroll data, has Boston's payroll at just under $168.11MM this season, though they obviously closed the gap at some point. Josh Beckett's extension was completed after the start of the season in an effort to save against the luxury tax. 

It was reported earlier this week that the Red Sox weren't willing to spend significant money this July in an effort to avoid the tax. Whether or not the team is willing to dip further into their pockets to add pieces at the trade deadline remains to be seen, though they have indicated that they prefer to wait until their injured players return before targeting high-priced players.

The Yankees are the only other team in baseball over the threshold, and they are taxed at a 40% rate because of past payrolls.


Full Story | 50 Comments | Categories: Boston Red Sox

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50 Comments on "Red Sox Are Over Luxury Tax Threshold"


jwredsox
5 years 17 days ago

It can’t be much over the Luxury tax so I doubt the tax is more than 1mil or something. And lol @ 40% for the yankees wow.

Guest
5 years 17 days ago

LOL at the Yankees?

Over the threshold is over the threshold.

elmedius
5 years 17 days ago

considering how many players theyve had to add to their 40 man roster and call up to the majors… it doesnt suprise me that theyve bumped from 168ish to over 170. ill assume this makes it less likely that they are willing to eat a majority of the money owed to mike lowell now?

barroomhero
5 years 17 days ago

I am doubting that story that the Red Sox won’t go higher than they are now, so I would imagine that yes, they would still eat some of that contract (all of it quite possibly). It just seems silly to me to argue over a million or two to possibly get into the playoffs (where you would probably make it all back). Not to mention, they already have Lowell accounted for in that payroll figure. So, if they get someone to eat ANY of that contract it only helps them.

elmedius
5 years 17 days ago

you make two good points.
i guess, depending on what kind of salary they take on. if just prospect/s, having the other team pick up anything would indeed turn out to be beneficial.

most teams make a killing off playoff appearances, i assume the sox make more than average given the CURRENT tenaciousness and fashionable state of their fans.

elmedius
5 years 17 days ago

you make two good points.
i guess, depending on what kind of salary they take on. if just prospect/s, having the other team pick up anything would indeed turn out to be beneficial.

most teams make a killing off playoff appearances, i assume the sox make more than average given the CURRENT tenaciousness and fashionable state of their fans.

5 years 17 days ago

So much for being the Small Market Red Sox…

elmedius
5 years 17 days ago

has anyone really considered them small market since the mid-late 90’s? if even then… i would assume the ramirez contract killed the notion no?

ELPinchy
5 years 17 days ago

yeah,but depending on what they do to fill the 2011 roster it might take a HUGE drop.

ELPinchy
5 years 17 days ago

yeah,but depending on what they do to fill the 2011 roster it might take a HUGE drop.

gigantes2425
5 years 17 days ago

sucks to be them

gigantes2425
5 years 17 days ago

sucks to be them

HerbertAnchovy
5 years 17 days ago

I know, I know (some folks may have forgotten that forgettable song by now).

HerbertAnchovy
5 years 17 days ago

I know, I know (some folks may have forgotten that forgettable song by now).

zonis
5 years 17 days ago

I am shocked that the Luxury Tax is $170! Why is it that high? Shouldn’t it be like $130 or $120 or something?

gigantes2425
5 years 17 days ago

seriously. it seems as if it was just made for the yankees. and now the red sox.

jwredsox
5 years 17 days ago

Tigers were over it a few years ago too. Maybe Mets too but I know the Tigers have been over it before

ELPinchy
5 years 17 days ago

In 2008 the Tigers,Mets and Redsox were all pretty close with the Yankees about $70M ahead of them all. There were 11 teams with payrolls equal or lower than what the Yankees paid above the second highest payroll. Hell,that was more than what the payrolls of the Rays and Marlins combined. Crazy!

ELPinchy
5 years 17 days ago

In 2008 the Tigers,Mets and Redsox were all pretty close with the Yankees about $70M ahead of them all. There were 11 teams with payrolls equal or lower than what the Yankees paid above the second highest payroll. Hell,that was more than what the payrolls of the Rays and Marlins combined. Crazy!

zonis
5 years 17 days ago

I am shocked that the Luxury Tax is $170! Why is it that high? Shouldn’t it be like $130 or $120 or something?

ferg1025
5 years 17 days ago

It doesn’t really matter. It’s not like the small market owners spend the extra check on making their team better by adding talent in the off season. And then they wonder why they can’t sell out at home. Sure blame it on the fans!!!

5 years 17 days ago

Cough……… Brewers… Cough. Some of these small market teams do reinvest the money received directly back into the payroll. Having 90 Million into players is a big expense in the smallest media market in the MLB is amazing. Also 3 million fans going on 3 years straight, sure sounds like some sellouts to me. But other than making two false statements out of 3 sentences that was a good post. Not everyone can drop $140 million on payroll every year.

5 years 17 days ago

Cough……… Brewers… Cough. Some of these small market teams do reinvest the money received directly back into the payroll. Having 90 Million into players is a big expense in the smallest media market in the MLB is amazing. Also 3 million fans going on 3 years straight, sure sounds like some sellouts to me. But other than making two false statements out of 3 sentences that was a good post. Not everyone can drop $140 million on payroll every year.

j6takish
5 years 17 days ago

Haha

j6takish
5 years 17 days ago

Haha

ferg1025
5 years 17 days ago

Shouldn’t there be some sort of penalty for say any team that doesn’t reach a $60 million payroll by the beginning of the end of spring training? It would be nice if they would stop punishing organizations for trying to win and start puninshing owners for not caring about their teams record nor fans.

ELPinchy
5 years 17 days ago

No,not if they are doing it right. The Rays only had a Payroll of $40m in 08.

ELPinchy
5 years 17 days ago

No,not if they are doing it right. The Rays only had a Payroll of $40m in 08.

HerbertAnchovy
5 years 17 days ago

That would really make sense. Then the small market teams could have even less to work with. Maybe next they could have reverse revenue sharing. That makes no sense whatsoever.

HerbertAnchovy
5 years 17 days ago

That would really make sense. Then the small market teams could have even less to work with. Maybe next they could have reverse revenue sharing. That makes no sense whatsoever.

ferg1025
5 years 17 days ago

Shouldn’t there be some sort of penalty for say any team that doesn’t reach a $60 million payroll by the beginning of the end of spring training? It would be nice if they would stop punishing organizations for trying to win and start puninshing owners for not caring about their teams record nor fans.

JDortmunder
5 years 17 days ago

I do think it matters to RS. This is a atypical year though. If they feel they can hang around the next two weeks, they may make a few moves.

If they have a poor West Coast swing then they’ll probably do nothing and just hope their inj. eight– or whatever it is now– can make a difference and they can play .700 ball after Aug,15.

JDortmunder
5 years 17 days ago

I do think it matters to RS. This is a atypical year though. If they feel they can hang around the next two weeks, they may make a few moves.

If they have a poor West Coast swing then they’ll probably do nothing and just hope their inj. eight– or whatever it is now– can make a difference and they can play .700 ball after Aug,15.

Fangaffes
5 years 17 days ago

In before the hat… oh, never mind.

Fangaffes
5 years 17 days ago

In before the hat… oh, never mind.

Steve_in_MA
5 years 17 days ago

Well, I just did the math using Cots to calculate the net payroll reduction for 2011, including offsets for raises to retained/under-contract/arb eligible players. My figures come out to $49MM coming off the books, before replacing 6 active players. I estimate, based on this year’s market activity, that those 6 could be very well replaced for $22-23MM. That’s a net payroll decrease of $26MM for 2011; well below the luxury tax threshold. So this is a one-time, isolated issue for us. I therefore suggest we should still take on some more salary to bolster the bullpen and maybe lock down a solid catcher for the next two years. If we can trade Lowell off for salary reduction, then we might not even have to pay any actual tax, when all is said and done, or at least, the tax would apply to a very minimal amount of salary exceeding $170MM.

Steve_in_MA
5 years 17 days ago

Well, I just did the math using Cots to calculate the net payroll reduction for 2011, including offsets for raises to retained/under-contract/arb eligible players. My figures come out to $49MM coming off the books, before replacing 6 active players. I estimate, based on this year’s market activity, that those 6 could be very well replaced for $22-23MM. That’s a net payroll decrease of $26MM for 2011; well below the luxury tax threshold. So this is a one-time, isolated issue for us. I therefore suggest we should still take on some more salary to bolster the bullpen and maybe lock down a solid catcher for the next two years. If we can trade Lowell off for salary reduction, then we might not even have to pay any actual tax, when all is said and done, or at least, the tax would apply to a very minimal amount of salary exceeding $170MM.

Lets_Go_Red_Sox
5 years 17 days ago

SOoo sick of hearing about this, even if they do go over the tax, how bout they dip into the billions they make by cheating people with the ridiculous prices of their merchandise and tickets? Not to mention the who knows how many millions they get from their t.v rights. Enough with this frugal garbage, hey sox front office the team you overspent for has holes, now dip into the giant pile of cash you’re sitting on and fix it! Just my $0.02

bringbackericthered
5 years 17 days ago

Salary Cap. Problem solved.

HerbertAnchovy
5 years 17 days ago

Here we go again….

Sniderlover
5 years 17 days ago

What’s wrong with a salary cap?

HerbertAnchovy
5 years 17 days ago

This is a debate that has been discussed millions of times… on here, and everywhere else. It never ends. It’s constant point-counterpoint (Dan Akroyd and Jane Curtin anyone?).