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Nationals Ownership Hesitant To Pass Luxury Tax Threshold

By Mark Polishuk | March 3, 2019 at 10:38pm CDT

Recent reports have hinted at a possible connection between the Nationals and free agent closer Craig Kimbrel, though luxury tax concerns could prevent a signing from taking place.  According to both MASNsports.com’s Pete Kerzel and MLB.com’s Jamal Collier, the team’s ownership isn’t at this point willing to exceed the $206MM luxury tax threshold, in an attempt to reset the Nats’ tax penalty to zero after paying the Competitive Balance Tax in each of the previous two seasons.

As per Roster Resource, the Nats’ projected luxury tax payroll sits at just under $201.5MM for 2019.  This leaves the club with a bit of breathing room for a potential trade deadline addition, as Collier notes, but not much else.  Barring a trade of another high-salaried player, there certainly isn’t room to fit Kimbrel into the mix.

It’s hard to accuse the Nationals of being unwilling to spend when the team has already been one of the offseason’s bigger spenders.  Patrick Corbin’s six-year, $140MM deal was the headline piece, though the Nats also doled out significant shorter-term expenditures on Brian Dozier, Anibal Sanchez, Kurt Suzuki, and Trevor Rosenthal, while also adding Yan Gomes in a trade from Cleveland.  Some of these moves were afforded due to money coming off the books, of course, most notably the expiring contracts of Bryce Harper and Matt Wieters, plus Tanner Roark was traded to the Reds.  Plus, the Nats have doled out plenty of large deals in the past, and may do so again if the club is able to extend Anthony Rendon.

Going forward, Washington has at least $110MM in luxury tax payroll accounted for in 2020.  Ryan Zimmerman, Adam Eaton, Sean Doolittle, and Gomes can all be retained through club options, and Zimmerman is the only one that looks like a solid bet to be declined.  Rosenthal has a vesting option for 2020, while Rendon and Dozier will be free agents outright.  Since some more roster needs will surely emerge over the coming year and into next season, Nationals ownership is surely wary of committing to another big deal for Kimbrel that would make it hard for the team to get under the tax threshold again (which will slightly rise to $208MM next season).

This all being said, it should be noted that even in adding Kimbrel, the Nationals would still very likely be in the first bracket of luxury tax overage, meaning they’d stay under the $226MM mark.  This means Washington would avoid a further surtax and only be charged a tax rate of 50% for every dollar they spend over $206MM.

As both Collier and Kerzel observe, the actual amount of money the Nationals would have to surrender in tax payments isn’t unreasonable.  Let’s suppose the Nats ended the season with a $225MM luxury tax payroll to barely stay within that first tax bracket.  For that $19MM in overages, they would then owe $9.5MM in taxes — not an insignificant amount of money, but hardly onerous for a big-market team with World Series aspirations.  As Collier puts it in a rhetorical question, “Would you rather win 93 games, the division and have paid the penalty or win 88, miss the postseason and avoid it? To me, it’s a no-brainer, but it’s a hurdle they [the Nationals] have not been willing to clear.”

It isn’t a guarantee, of course, that Kimbrel’s addition would automatically put Washington over the top in a very competitive division.  But this hesitation on the part of team ownership is particularly odd considering that the Nats have already topped the tax level in both 2017 and 2018.  It also calls into question of why, if a third straight season in excess of the tax was such a big issue for ownership, the Nationals didn’t make a bigger push to unload salary last summer.  D.C. waited until they were entirely out of the race in late August to begin trading players (i.e. Daniel Murphy, Gio Gonzalez, Ryan Madson, and Matt Adams), though it already looked like they had little shot at either the NL East title or even a wild-card slot.  The Nats ended up topping last year’s CBT threshold by only $8MM, even dealing some of those same players earlier would’ve saved the team a few more weeks’ of salaries.

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Washington Nationals Craig Kimbrel

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View Comments (67)

Comments

  1. bjhaas1977

    4 years ago

    Passing the luxury tax doesn’t make sense in this division at the moment.

    Reply
    • mack22

      4 years ago

      Agreed. Nats are way behind in talent. They should sell off big pieces and start rebuilding

      Reply
      • natsgm

        4 years ago

        Sarcasm doesnt come across well in writing, but i really hope that is sarcasm

        Reply
        • dcrising

          4 years ago

          Hahaha if that’s not sarcasm, mack22 is delusional. He’s probably a Philly fan who thinks Harper signing guarantees a WS.

      • Freddy H

        4 years ago

        Hahahahahahahahahaha

        Reply
  2. johnsilver

    4 years ago

    No mention in the writeup where they would also lose an additional pair of top draft picks, leaving them with just a 1st and 4th rounder out of the top 6. That’s like taking a draft and writing it off entirely, not only do the picks go, but money for those slots. A lot riding on 1 reliever sign.

    Were they a team getting an additional charity pick which isn’t touched in rounds 1-2 like some teams get every year? maybe, but Washington isn’t that lucky, another reason to stop that charity give away.

    Reply
    • jbigz12

      4 years ago

      Sorry but the Nats haven’t won a single playoff series in their entire history. If a couple picks are what stops you from completing your team that’s not really smart either. I can see the hesitation but if Kimbrel’s market craters to a point where its just too reasonable of an offer I’m not stopping because of a couple picks. Kimbrel and Doolittle on the back end looks much nicer than Doolittle and Bearclaw or Rosenthal. Division is tight this year. They need every win they can get.

      Reply
      • martras

        4 years ago

        Kimbrel might add 2 WAR… which is 2 WAR over a AAA replacement player. How much does Kimbrel add over what they could be using? 1 WAR?

        And if they don’t win this year after signing Kimbrel, will they be asked to sacrifice multiple draft picks again? Teams are built through the draft and finished through free agency. This article is heavily biased and misleading. It’s not the Nationals fault Kimbrel isn’t signed. It’s teams like the Twins’ fault.

        Reply
        • jbigz12

          4 years ago

          We don’t need to use WAR for a reliever as that’s an essentially useless stat. WAR has its place and time and its useful but the way you’re using it there isn’t. How much better would Kimbrel be v Kyle Barraclough is essentially the question. How many less games would he give away? What is the value of being able to use Doolittle in the 7th or 8th when there are tough lefties up? I think he’d make a big impact. Not one you’re going to be able quantify using WAR. Just think logically.

        • martras

          4 years ago

          Right, we should only use WAR when it supports your argument, not when it invalidates it.

          Your logic is flawed in my opinion. While it’s great to think you can just wait until the perfect situation and only ever use your closer in those perfect situations, most of the time the closer or setup guy comes in, it’s no particularly huge leverage situation. It’s just another 8th or 9th inning appearance facing a random hitter. In the NL, especially, when there are fewer times you’re going to see an off the bench pinch hitter because they’ve already been used earlier in the game to pinch hit for a pitcher.

          The bottom line is that while, yes, adding a guy like Kimbrel makes your team better, it’s more about providing piece of mind than statistical value. It’s also worth considering Kimbrel is showing potential major decline in his peripherals.

        • jbigz12

          4 years ago

          No WAR is not an accurate measure for relief pitchers. WPA is the more relevant metric though like I said not everything needs to be a metric. We just need to use logic here. I think a logical argument makes more sense than arguing for WAR on Kimbrel’s worth. I understand some hesitation on Kimbrel long term but framing anything based on WAR of a RP I’m just not going to agree with. Kenley Jansen was worth .6 bWAR last year while tommy hunter was worth 1.5 WAR. Are you telling me advocating for relief pitcher WAR seems smart to you? It’s just not the way to go if you want to argue the point.

        • aamatho18

          4 years ago

          Why would it be the Twins fault that they’re cautious in signing Kimbrel? Every team has the same worries due him showing some decline, but to put it all on the Twins? That’s just not right.

      • JoeBrady

        4 years ago

        1-I don’t disagree, but this is the boiling frog scenario. If it’s worth ‘x’, then it has to be worth ‘x+1’.

        2-There are other seasons to worry about. How often can you blow off better than half your draft?

        3-MLB-R is usually pretty good with their analysis, unlike most writers, but not mentioning the loss of two draft picks is pretty sloppy. It’s a bit like an NFL team trading a #2 & #4 for a kicker.

        Reply
        • thecoffinnail

          4 years ago

          If that kicker is Morten Anderson then you do it.

          Let’s use a bit of logic on your argument. Would you rather have Kimbrel or Jake Johansen and Nicholas Pivetta? Kimbrel or Andrew Suarez (who didn’t sign) or Robbie Dickie? Those were the Nationals 2nd and 4th round selections in 2013 and 2014 respectively. Using draft picks which after the first 10-15 are a complete crapshoot, as a reason, to not sign someone who can be a difference maker for your team is foolish. Using his peripheral stats as a reason not to take the risk on Kimbrel is a valid argument but using draft picks is clearly not.

        • JoeBrady

          4 years ago

          If the draft picks were the only concern. It is draft picks, plus salary, plus the payroll tax.

          And you can’t say, just because some draft picks don’t work out, all draft picks won’t work out. Would it be fair to say the RS should never surrender their #5 & #9 because in 2011, that was Betts & Shaw?

          A better way would be to see how much they are generally worth. The budget for a #2 late pick is $1M and the budget for a late #4 is $400k. Assuming a 100% market markup, it is like adding $1.4M to the final tally.

      • hothothotinc

        4 years ago

        Agreed.

        Reply
  3. citizen

    4 years ago

    Gnats already have several closers and formal closers. Unless kimbrell gets a clause in the contract where he closes games, why demote yourself to see up man. I’m sure do.litte won’t be happy either.

    Reply
    • slowcurve

      4 years ago

      Really no need for the g here. Unless you’re talking about the former Mets single-a affiliate.

      Reply
      • jleve618

        4 years ago

        Oh, i just assumed he misspelled giants.

        Reply
        • endtheDH

          4 years ago

          he couldn’t figure out how to spell Kimbrel, setup, or Doolittle, so that’s a fair assumption

      • sjm308

        4 years ago

        Thanks for that

        Reply
    • jbigz12

      4 years ago

      You think Doolittle or Rosenthal is going to be the primary closer over Kimbrel? No chance. Doolittle has been a set up man for half his career and I’m positive that they’d love to be able to throw him out there in a tough spot where you need a lefty. Having him and Kimbrel could be lethal.

      Reply
      • fba0017

        4 years ago

        Kimbrel is not what fans perceive as the Old Kimbrel. His peripherals show concern. Was just an article I read where some scouts see concern as well. So teams like the Nats have to be careful. Tie up a lot of money for a reliever who was lit up and lost closer role in playoffs.

        Reply
        • steveb888

          4 years ago

          Yeah if Kimbrel gets a 4 year deal, he might not be very good the last couple w/ those declining peripherals that you mentioned.

          However, for ‘19 the Nats’ biggest weakness is their pen and he’ll certainly help them in a division that should be a dogfight between 4 teams.

    • dugdog83

      4 years ago

      Was Gnats autocorrect or is that a nickname for them? And if it’s a nickname that’s kinda cool, I never saw that before, but it sounds like your a Washington fan, so are you calling them a small annoying insect because your disappointed in them at the moment, or do you root for a rival? I’m speaking out of curiosity for everyone here….

      Reply
      • Chicks Dig the Longball

        4 years ago

        His name is Citizen so I’d guess its a Phillie fan. I disagree. Any petty name calling of another team just shows signs of insecurity.

        Reply
        • jbigz12

          4 years ago

          I’ve seen gnats quite a bit on here. That’s not quite as bad as “Mutts” but taking a team name and attempting to throw an insult that way is something I think most of us could agree should just stop. It’s not clever or funny.

        • Alfred E Neuman

          4 years ago

          As a NYM fan, I prefer STEMS, as in Keith Hernandez greeting Gary Carter with, “Welcome to the Stems” when Carter arrived in 1985.

  4. RunDMC

    4 years ago

    Kimbrel would put WSH over the top? LOL.

    Reply
    • jbigz12

      4 years ago

      Funny?

      Reply
      • RunDMC

        4 years ago

        Very

        Reply
    • VonPurpleHayes

      4 years ago

      The writer mentions that it isn’t a guarantee that Kimbrel would push the Nats over the top.

      I personally think they’re already at the top. Braves and Phillies are right there as well. And with the Mets pitching, they could take the division if everything goes right for them as well. And the Marlins are stuck in a rebuild. The NL East is just scary competitive.

      Reply
  5. Doug

    4 years ago

    Kimbrel’s 4 ERA in the postseason isn’t going to help get you to the NLCS.

    Reply
  6. Yep it is

    4 years ago

    Mike Rizzo is the Lerners are a JOKE. They wrote to the book on tanking any championship window.

    Reply
    • KJ

      4 years ago

      That seems like a ridiculous thing to say. The Nationals have spent a TON of money over the years (including this one) and it seems they are always “in” on the big free agents

      Reply
  7. proof2006

    4 years ago

    I guess Rendon won’t be getting an extension in season. And at that point he may as well test free agency.

    Reply
    • lowtalker1

      4 years ago

      They could still give him an extension that kicks in next year

      Reply
      • proof2006

        4 years ago

        It doesn’t matter when it kicks in. The CBT averages the total sum and years signed. For instance, if they sign him for 7 years in the eyes of the CBT he’s on an 8 year however much money contract.

        Reply
        • fje2192

          4 years ago

          incorrect. They could set it up as a new deal which doesnt take effect until next season in turn having no effect on this years numbers.

  8. TrimReaper

    4 years ago

    $80-mil tied up to two players they hope can pitch in 60 games combined. Additional $36.8 to Zimmerman and Rendon and there’s over half your payroll.

    A couple monster contracts will eat at your luxury tax number. That is why nearly every franchise wants to take the youth movement and develop players from within. That is also, partially, why Kuechel and Kimbrel are still on the sidelines.

    Reply
    • Flapjax55

      4 years ago

      Yeah and those two guys in a short series are potentially lethal.

      Reply
      • Flapjax55

        4 years ago

        I meant Scherzer and Corbin

        Reply
      • TrimReaper

        4 years ago

        Absolutely they can be potentially lethal.

        Then again, they didn’t reach a series in 2018. Can’t be lethal if you can’t make it there. And they haven’t made the NLCS. There’s also that.

        The Nats example was more for the rest of the league nor was it my intention to rip them for throwing big money at Scherzer and Strasburg. When you have luxury tax rules along with huge dollars tied up in only a couple players it will cause teams to re-think how they want to spend.

        Reply
        • Swinging Friars

          4 years ago

          This team is built really well. Tons of young talent constantly coming up. Big $$ arms and good position players. The luck is bound to change for them

          As long as they keep bringing up talent like Robles and Soto they’ll be able to keep going after big $$ players too

  9. LongTimeFan1

    4 years ago

    No mention of the insane amount of money the Nats already have deferred on players they can’t afford – almost 200 mil deferred without interest including not even able to afford Dozier and Sanchez on one and two year deals without deferred money.

    Reply
  10. dragqueen

    4 years ago

    After Harper refused they spent money better. They dod good

    Reply
    • VonPurpleHayes

      4 years ago

      That Harper offer was a joke. Full of deferrals. They knew it wasn’t enough and then they went all-in on Corbin.

      Anyway, the Nats are looking pretty good this year. Kimbrel isn’t needed. I think the Braves would be s better fit.

      Reply
    • JoeBrady

      4 years ago

      Like the alternative spending a lot better. I said that last year at the trade deadline. When you have a guy like Robles coming in, and Taylor as #4, spending $30M on Harper is not the best use of your money.

      Reply
  11. CLKR

    4 years ago

    Since no one’s really favored to land Keuchel or Kimbrel at the moment, why won’t the Twins step in and sign one of these guys. And if they really cost too much in terms of commitment than can we at least sign Gonzalez and Madson instead.

    Reply
    • JoeBrady

      4 years ago

      Madson is 38 coming off a poor season. I like Gio, a lot, but Madson isn’t worth much.

      Reply
  12. stansfield123

    4 years ago

    The CBT payroll is off by about 6 mill., compared to Cot’s calculations. Which are far more thorough, so you guys really should use them instead.

    Here’s one inaccuracy I found just after one quick glance: Scherzer’s AAV is $28.6M, due to deferrals in his contract. Not entirely sure what that means, but Strasbourg and Corbin have them too, and yes, they are a real thing. That’s confirmed by officially published payrolls in past years.

    So the Nats have $11M to spend for free. If they give Kimbrel $17M AAV, use the same gag to reduce the AAV to $15M, they’re at $2M luxury tax. Which is nothing. They need to go for it, because, as things stand, they’re far from favorites in the division.

    Reply
    • sully51

      4 years ago

      Deferrals don’t affect the AAV for luxury tax purposes. Only the total money and total number of years.

      Reply
      • stansfield123

        4 years ago

        Okay, so I looked it up, and yes they do. Here’s why: when there’s deferred money, AAV is adjusted for inflation: the League takes into consideration the fact that the present day value of a payment that’s due in the mid 2020s is less. Source: https://www.pinstripealley.com/2015/1/20/7854105/max-scherzer-washington-nationals-contract-trendsetter-deferred-yankees-copy

        So, like I said: the CBT AAV on Scherzer (and all the other players the Nats owe deferred money to) is less than the Total Money / Length. In Scherzer’s case, it’s $28.6M, instead of 30 mill..

        And the Nats CBT payroll is $195M.

        Reply
  13. blovy8

    4 years ago

    There are some fairly plausible incentives in the deal they gave Rosenthal that aren’t being accounted for – he can make another 7 million if he stays healthy enough.

    Reply
  14. 619bird

    4 years ago

    Honestly I’d stand pat with the pen. Walks would be a concern but the rotation is solid if healthy and the lineup even with some youth in the of backed up by a couple vets is solid. I mean something has to give in the east and a team isn’t going to live up to expectations. Nats might be in a bit of a retool but no reason to panic. They’ll put a solid ballclub on the field and you never know if things fall apart for a couple clubs in the NL they might sneak in a wild card.

    Reply
    • jbigz12

      4 years ago

      Nats aren’t retooling. They’re going for a WS. You don’t add the way they did this offseason with the expectations this club always has to retool. You don’t know how much longer Scherzer/stras will be pitching at this level. They’re clearly all in. Well, almost all in if they grab Kimbrel I’d say that’s throwing everything they have in.

      Reply
      • wv17

        4 years ago

        Stras may already be slipping.

        Reply
  15. lowtalker1

    4 years ago

    I would let it reset bc they won’t do anything this year

    Reply
  16. Mack83

    4 years ago

    I bet this is chapping the butt of MLBTR writers since they see no problem spending owners money.

    Reply
  17. natsgm

    4 years ago

    The luxury tax seems to have really impacted the players salaries.. This is just proof of that. Not sure why the players union would ever agree to it in the first place.

    Reply
    • stansfield123

      4 years ago

      It’s simple: they miscalculated the Yankees’ and the Dodgers’ willingness to pay massive amounts of luxury tax.

      They figured both teams would just keep letting the rest of the League bilk them out of their profits. It didn’t happen, they both dropped payroll. Not only that, they’re both able to field great teams with less payroll (because they’re spending their money on scouting and development instead), which means they won’t get back to their high spending ways for the rest of this CBA.

      In fact, my guess is that even if the next CBA gets back to the way things were (a fixed luxury tax rate, instead of a progressive one), the Yanks and Dodgers still won’t spend like they used to. This CBA inadvertently lead them down a sustainable path, where they can maintain dominance without massive payrolls.

      Reply
    • JoeBrady

      4 years ago

      Tony Clark. Nice guy and good player, but you really need good accountants and labor lawyers. As soon as I read the summary, I knew it was an awful deal for the players.

      Terrible leadership by the union, and the agents, but the players should’ve read it before they voted on it.

      Reply
  18. AaronSapoznik

    4 years ago

    It’s hard to fathom why the Braves haven’t re-signed their former closer yet. They are playing a dangerous game of chicken waiting for a bargain in Kimbrel, at least in the amount of years he seeks in his FA contract.

    After a quick plunge into free agency early this offseason Atlanta has seen their East rivals in Washington, Philadelphia and NY all make more significant improvements. Aside from their other moves, the Phillies also beat out the Braves offer in trading for premium catcher J.T. Realmuto from the Marlins. While it appears that the Nationals may be out on Kimbrell there is still a decent chance he could wind up with the Phillies if the Braves wait too long. Adding Kimbrel as their closer in an already formidable bullpen would make Philadelphia the prohibitive favorites in the NL East while pushing the Braves further down the ladder.

    Reply
    • JoeBrady

      4 years ago

      I think Kimbrel’s value goes down every day, until Atlanta makes him an offer. The Philly will have to make him an offer. Then the Nats.

      I don’t think Kimbrel is worth it, but that division is 4-way balanced. And tough enough that whoever finishes 2nd, might miss the playoffs.

      Reply
  19. bosoxforlife

    4 years ago

    Everybody is raving about the Yankees building a great, and deep, bullpen but seem to be deriding the Nationals for considering adding to their pen. In recent years that route has been very successful. The Royals rode theirs to a championship in 2015 and the Brewers used, Hader, Jeffress and Knebel effectively in last year’s surprising run to one game from the WS. A slightly less great Kimbrel is still somebody every team should covet. The only question is money.

    Reply
  20. Swinging Friars

    4 years ago

    So much for that 15-1 I took at the Aria… Boo! This was the year to push for it

    Reply
  21. wv17

    4 years ago

    They could have reset the tax last year by sending Harper to Houston but nope.

    Reply

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