The luxury tax bills for the Red Sox, Cubs and Yankees – the three teams that exceeded the $206MM threshold in 2019 – are now public knowledge. The Red Sox owe $13.4MM, the Cubs will pay $7.6MM and the Yankees must surrender $6.7MM, according to Ronald Blum of The Associated Press. As far as actual payrolls go, Boston checked in at $228MM, the Yankees put a $226MM roster on the field and the Cubs spent $220MM, Blum notes.
Neither the Red Sox nor the Cubs made the playoffs in 2019 despite their elite-level spending, while the Yankees lost to the Astros in the ALCS. Now, with the exception of the Yankees (who’ve already made history this offseason with the nine-year, $324MM contract they awarded right-hander Gerrit Cole), those clubs look as if they’re in salary-cutting mode. The tax limit will climb to $208MM next season, and the Yankees will blow past it in the wake of the Cole signing. Moreover, there’s a decent chance the Yankees will outspend the $208MM mark by $40MM or more, which would lead to a 42.5 percent overage tax next year and would cause their highest draft pick to drop 10 spots.
It seems the Red Sox and Cubs would like to avoid the tax, but it remains to be seen whether either will pull off that feat. As things stand, next year’s Red Sox are projected to go beyond $208MM by almost $30MM, while the Cubs will do so by about $6MM, per Jason Martinez of Roster Resource.
It will be easier for Boston and Chicago to duck the tax 12 months from now if they sell off an expensive star or two, which seems possible. The clubs have former MVPs (outfielder Mookie Betts for the Red Sox and third baseman/outfielder Kris Bryant for the Cubs) who have come up in trade rumors. Betts and Bryant aside, there are other well-compensated potential trade chips in both cases. Left-hander David Price and center fielder Jackie Bradley Jr. come to the fore for the Red Sox, while righty Yu Darvish and first baseman Anthony Rizzo join Bryant among high-priced Cubs who may not be untouchable.
I’m surprised these 2 teams aren’t making trades already, as there not favorites for their division.
I remember that the Nationals had a 0.1 chance of winning the WS.
Not saying they won’t be competitive only that plenty of teams would be interested in their players. Washington also had 3 (borderline 4) aces in the rotation come playoff time.
True but OOTP projected them to win at the beginning of the season so….
Waiting for the market to come to them. As reported earlier, Price’s deal looks ar least palatable if the team pays it down somewhat after the pitching contracts just signed. So does Darvish. Bryant will not be traded until Donaldson first signs.
Darvish pitched insanely well from July through the end of the year, and he has a no movement clause, I highly doubt he is moved, the price contract is awful I cannot believe there is interest in him, has to be someone in Boston trying to use the media to drum up trade interest
Darvish would waive his no trade clause like nearly all players do….for a price.
I actually think Darvish is at least worth his contract, given his profile isn’t entirely dissimilar from Ryu(in terms of a pitcher that is near elite at times….when healthy). And Ryu seems likely to end up with 4/$80M.
However, waiving his no-trade clause would likely require something like an extra year to be tacked into his contract. 4/$80M is reasonably fine for Darvish. 5/$100M is too much.
And Price pitched insanely good through July, so what? Neither one had a good full season
way different in pitching the second half well than the first half. Especially with price, did he pitch more than 60 innings in the second half? Leaves injury questions unanswered
Yes ATL, Price was insanely good in the first half, primarily because Cora agreed to skip his spot every time they were facing the Yankees because he had a “boo-boo” that hurt.
Price was a great pitcher. He has too many hi stress innings on this shoulder and elbow. The latter affects his control, which means that when he is not spot in he gets hit HARD.
Believe me, I’m not arguing Price is 31m/yr good right now. But, he had a relatively minor clean-up operation of a type that isn’t known to leave any lasting negative hindrance – not Tommy John or something radical. So, at the same time, I do think he’s worth more than 8m/yr like some would have you believe. I’d say 21m/yr isn’t out of line given what contracts have been like and his history. If it gets paid down to that then they should be able to move him.
At the end of July Price’s ERA was 3.86. Do you mean through June?
Price got into the seventh inning twice last year. He threw 100 pitches thrice. He didn’t pitch 5 innings after Aug 1st.
Has the definition of insanely good changed?
No one in their right mind would bail out the Red Sox and take on 15 million a year for the next three years.
On July 14th, he had a 3.16era, imperfect as the stat can be.
I forgot he made a couple starts trying to play through the injury when the team was in contention.
Still, a 3.16 most of the way through qualifies, but, clearly you wold like to argue any point given the rest of your post rather than acknowledge that having a 3.16 era through July 14th, after the all star break, is exceptional in a year 4.76 was league average in the AL.
$15 million per year for 3 years is probably pretty similar to what proce would get on the open market so I could definitely see a team trade a low level prospect for him at that price
Bryant will not be traded until his grievance case is settled
Agreed. Cubs aren’t even a top 3 team in their division if the season started today. They need a top of the rotation starter, one more quality reliever, and still haven’t found an answer for a lead off hitter. They should have already signed Will Harris to finish up the bullpen, and Ryu is within the budget if they are planning to trade Bryant.
Even just to get some promising young starting pitchers that are high on the prospect ratings. Should be a top priority.
You don’t believe they are top 3 in that brutal division ? Cards lost ozuna and signed a Korean league pitcher. Brewers lost grandal and Davies . Cubs can’t compete with dodgers or nats but cards and brewers aren’t a problem
Nobody wants anyone’s salary dumps. The price rumors were nonsense.
Well, at least the Yankees were good.
It’s silly to drop a draft pick or reduce IBM because a team spends. I’d rather change a couple other things than keep that part.
the luxury tax rules may change during the next CBA but the teams that face their pick falling 10 spots are generally teams picking in the second half of the first round anyway so I don’t think it’s all that much of a deterrent
Biggest deterrent I see there is the BIG drop in slot value. That impacts the ability to pay over slot further down the board, and, decreases the amount of overage dollars you can spend without triggering penalty.
Does player quality drop off much between rd1 #25 and rd2 #5? Likely not much. But overall money to sign all your picks does take a BIG hit added togethet
Cubs shouldn’t worry about the tax. If they trade Bryant and Quintana in a package deal that brings back a starting pitcher and a prospect/ 30M off the books.. so use 17M AAV for Ryu and you are still under the luxury tax. They should wait until the trade deadline to consider any extensions of Baez. If not in the race, they will almost certainly trade Darvish, officially signalling the beginning of a rebuild with just Rizzo and Baez getting extensions. If by some miracle Epstein finds a frontline starter before the spring and miraculously they are still in the hunt, then just wait until the offseason. A possibility that Lester retires if next season resembles 2019 would also free up some dough
Cubs do not have a lot to worry about in the division right now. I would say it is a 4 team race with the Reds offseason. Braves, Dodgers will probably run away with the NL though.
Cubs do have some bad contracts, but not awful. Lester, Quintana, Chatwood, Descalso all come off the books after this year as Lester has a 10 million buyout. Or you keep him for 25 million for 1 year, which if he bounces back does not look like a bad option.
Everyone bashes the Cubs, but they are in better shape than most think with their money and the way the prospects are looking. If they have a good year of pitching development in the minors like they did last year, 2021 will have a lot of young talent waiting to come into the fray. and at that point you have 3/74 of Heyward left, 3/60 of Darvish, and 1/15 of Kimbrel. 1 or 2 of Schwarber, Baez, Bryant, Rizzo will need to be extended or traded before free agency begins, they you put the QO on the other guy and get a draft pick for him getting picked up. Contreras makes the most sense to be traded this offseason.
So, in a nutshell, the Cubs will be ok and have options.
I agree . Hoerner looks good, alzolay in rotation soon. Marquez may turn out to be a ace or top 2 starter
They wont extend Bryant. They’ll extend Rizzo and Baez by next winter. Winter 2020 they’ll extend Contreras. winter 2021
These aren’t even that big of bills for 1st time offenders. Crazy how scared some teams are to go over for just 1 year. Dodgers cough cough**
Dodgers paid luxury tax three years in a row before this past season, didn’t they? I feel like you’re barking up the wrong payroll.
It re sets every time you go below it. My issue is not with how they aren’t over. Its with treating the line like an absolute no cross no matter what.
@amk3510 Resetting before getting to ludicrous tax levels is just smart business. They just offered $37.5M/yr to Gerrit Cole, which would’ve put them at $211M for 2020. They’re not just going to throw money around, but they’re clearly prepared to go over in the right situation.
s a giants fan I hate defending the dodgers but yeah – part of how they got where they are is by leveraging their spending in order to get players into their system and FO guys to develop in order to get to a place where they don’t have to spend and gamble on veterans because if you look at it from a purely financial perspective the cost of gambling on a guy that you get from an int’l spending bonus, add’l slot in a trade + scouting + development will be less than you spend on say a price or a cole or a pujols contract and paying into the retirement years with no return. In a lot of ways it is the anti-tank method of restructuring but it requires a large down payment when you start it. The same thing is going on with the giants now and I find it puzzling that people are so against it – as much as I feel like the methods ride the line of what is or should be against the rules it is better than the tanking method of just making a crappy team on purpose and depriving fans.
If the Yankees trade Happ, they’ll dip below the third threshold.
If they win their grievance against Ellsbury, they’ll go below the second threshold.
From what is read, no way they win Els’ grievance. Seems to me that once they became aware of the Mets’ Cespedes grievance, they saw a technical opportunity. Perhaps they’re hoping for a settlement that saves the team a modest sum. Unless Els’ overrules the Union since it’s his money at stake, after Cespedes, I just don’t see the Union settling at any price as the precedent will have been set. Medical treatment is a personal, constitutional issue. From what I read, he didn’t do anything that many others before hadn’t done.
What does medical treatment being a “personal, constitutional issue” have to do with this? Also, what clause provides for this? If it is a constitutional issue, then all our insurance contracts are voidable for limiting our ability to choose our medical providers, no?
Bad example. I’m not aware of any insurance contract that prohibits care. It just says if it’s out of network you need to cover the cost yourself to a varying degree.
A better analogy might be abortion. Courts regularly rule, for example, that a private company cannot dictate to its employees that they are unable to choose to get an abortion.
When
When
^
Chump change for all 3 teams.
If the tax bill was the only piece to the penalty I’d agree with you.
However, there are losses of international signing pools, 10 spots in top draft pick, drop in amateur draft signing money due to lost draft pick, loss in revenue sharing refund payments, drop in comp balance draft picks, increased penalties in signing QO recipients, just to name a few.
So to claim “it’s only a few million” doesn’t look at the big picture
It depends on what the discussion entails. If you’re discussing the second tier yes the penalties are pretty significant, in terms of draft position etc.. if you are discussing the 1st tier the impact is minimal and can be easily alleviated if not fully made for. The money recouped in playoff revenue, the draft pool allotment traded for, etc.
Yes, the dollars to those teams don’t matter much.
I think the issue is this…….
It’s pretty much been the same large market teams that are in these positions each year, as even the larger mid-market teams police themselves as they don’t have the revenue to forever increase their payrolls at a large percentage each year.
What’s been going on for over a decade now is that when the large market teams continue with the wild spending – which increases salaries for all other teams (as we’re already seeing this year with the price of all pitchers after outrageous contract’s were given to Wheeler and then Cole) – then the 22-24 other teams get together and demand even higher and higher penalties for the 6-8 large market teams that have outrageous advantages in revenue streams. Which the large market teams use to price other teams out of contention.
IMO it’s not so much this years penalties that the large market teams are concerned with, but rather the recent history that the penalties will be even more severe in the near future. This missile / anti-missile dance has been going on for years. No end in sight unless far more revenue sharing is put in place.
I guess you should know ATL.
Elite level of spending means a positive way to spend , better than others, remarkable but spending at that level without making playoffs. I would use other word like unwise level , wasting level or stupid level,..
Even the Rays and Marlins made more than 200 million last year and most of the owners are rich. Time to increase the floor!
LOL
Where are you getting your figures from?
this is all proof the tax works as intended. teams are affraid to go over, but will if they need to.
Two points on the Yanks, first they make 630 million a year, and second they just got over 30 million in insurance money for Ellsbury. So they ;t concerned with this years cap. Next year they can get back under with over 100 million coming off the books. Spotrac has them at 89 million next year. I think it is the same for the other teams over the cap Every team makes a profit over the cap every year according to Forbes, the problem that needs to be addressed is the floor.
Again, where are you getting your figures from?
“Spotrac has them at….” 7 lines down or 4th sentence in.
Where on sportrac? And do they take into account ALL spending and not just revenue. Teams expenses are a lot higher than simply the payroll of their team.
And if a team is owned by a corporation, then there are other huge headaches.
The Angels won a World Series, but still lost money. That’s why Disney had to get the team off their books. If the Angels were profitable, Disney would not have sold them.
Most teams don’t make nearly as much as you think.
Spotrac is relatively simple to navigate (ie. google search “spotrac”, click MLB, use the drop down for the team, 2020 payroll is automatically generated, then scroll. No one said Spotrac and Forbes were necessarily correct. Those are the sources the original poster used to calculate. You can disagree. But then you provide statements of “teams don’t make as much as you think they do” without providing sources. No one said they think that teams make a certain amount, only that the sources provided illustrate that teams generate significant revenue and the likely largest expense of that, which is player salary. Also, curious as to what other headaches are associated with a team being owned by a corporation? Most MLB teams are principally owned by individual owners.
Baseball set a record of 10.3 billion last year! We also know teams are a business and hide money!
Forbes!
So refreshing when someone reads an entire comment before posting.
The CBT is an artificial cap, because the bigger market teams can clearly spend….the only reason why they won’t is to enhance profitability. If, say, the Cubs decide not to spend and go out of their way to offload contracts, then their fans can make their feelings known by not turning out, and their state and city government can keep a tighter fist then ownership puts out its hand. But I think the CBT has the wrong incentives in it. Draft pick penalties actually make for longer-term spending issues. The prospect a big market team doesn’t draft from, say, the 27th position, is the future hole it has to patch by spending big bucks in the Free Agent market a few years later. I’m not suggesting we get rid of inverse order drafting or even compensatory picks for loss of free agents. But finding multiple ways to keep bigger revenue teams away from early round picks forces them to buy at above retail. From the smaller and midrange market perspective, the CBT incentivizes tanking, which diminishes on-the-field performance and lowers revenues from gate receipts and concessions, and diminishes public perception of the product. The powers-that-be ought to be looking at this.
Oh I guarantee you they’re looking at it. Think about it; with an ageing population, MLB should be going gangbusters right now; it’s always been a sport that appealed to the “older crowd”. But, as attendance figures/TV ratings show, that’s not the case at all.
Moreover, MLB’s appeal to a growingly diversified audience is waning. Baseball used to own the inner city; now, it’s tough to find a baseball diamond anywhere.
Those are MAJOR issues as the new CBA approaches. The golden goose of increased franchise values is dead; the owners know it, the Union knows it. Neither gave much thought to the consequences of the ways they’ve been operating; the “quick buck” had too much allure. And the bill has become due.
Expect LOTS and LOTS of changes with the new CBA, and an almost certain work stoppage.
Totally disagree, their won’t be too many changes and their won’t be a work stoppage. I don’t know about where you live, but kids haven’t been playing on the playgrounds for years. That might why their are so many injuries in today’s sports in general. Kids used to play outside all day long, now they only practice when their is an organized practice.
TV contracts not fan attendance carry the most wieght in today’s baseball. More importantly the Florida teams need to be moved to productive location. They have had their chance now it’s time to move on to a new location. The two most important things for the MLB is to move failing teams, and establish a floor on spending. All the MLB owners can spend more on players. The players are what people what to see, and we don’t care about the rest of it.
I agree fans come for good baseball. Agree on importance of TV contracts, but I think that those contracts ultimately reflect the quality of the product to a certain extent. The problem with moving failing teams is that you are often taking those teams from localities where the taxpayer has paid for stadiums and infrastructure. It’s one thing to move a franchise when a stadium lease is about to expire, and entirely another just a few years after they were built. Marlins Park is 7 years old. You could say that if elected officials were too dense to not understand that freebies without strings are just freebies, but there’s a reputational risk not just to the team, but also the league.
What’s really needed is a rethinking of how things are structured league-wide, but trying to get all those billionaires to agree to a mass reallocation is not going to be easy. A spending floor (or at least a significant penalty on revenue sharing) may be a way to get more competitiveness.
Cubs tax is. 7 million that is peanuts . They paid drew smyly 10 million to set out a season
There are so many truths to this it ain’t funny
everyone: the cubs dont spend
the cubs tax bill:
Totally disagree, their won’t be too many changes and their won’t be a work stoppage. I don’t know about where you live, but kids haven’t been playing on the playgrounds for years. That might why their are so many injuries in today’s sports in general. Kids used to play outside all day long, now they only practice when their is an organized practice.
Why are the cubs over the threshold tax at all? They havent spent money since they signed Yu and chatwood. Wouldn’t it have reset my now? 55 mil off the books and they still need to pay a bs penalty.
I really hope for the next CBA they raise the tax threshold a team can spend to 250mil a or get rid of it completely. It makes no sense to have this when their is no salary cap
It makes perfect sense to have it with no salary cap……. Also, Cubs have a lot of contracts right now in the 10-25 million a year range to like 10 guys, including arbitration.
Its due to insane arbitration figures. $50M falls off and $45M gets tacked on due to “yearly raises.” It takes a free agent style contract to extend anyone anymore, which completely defeats the point of having homegrown talent.
The ability to make 15-25M per year should be the incentive for signing an extension. Bryant is fussing about an extra year of service time…a year in which he will probably make $25M. BooHoo. I don’t have the answers, but there is something broken with the arbitration process IMO.
Best deal for the Cubs to get out from under luxury tax in 2020 and beyond is to make a trade with a team who will take Heyward and his 4-86 contract along with other more attractive and high cost assets. The Braves may be willing to make that deal with Kris Bryant, Jason Heyward, Brailyn Marquez and $15.0 Cash going to Atlanta for Ender Inciarte, Johan Camargo, Chad Sobotka and Alex Minter. Cubs cut $90Million over 4 years (24.5,21,22,22) and more if Bryant loses grievance. Braves fill third base need with middle of the order bat and take on Heyward’s albatross contract but get a promising high A pitching prospect to compensate. Camargo goes to the windy city to give an option at 3B for the Cubs plus they pick up two MLB relief pitchers.
The cubs need alot more in return. And why aren’t trading Brailyn Marquez. They need to add pitching not subtract it.
You should use this proposal in your stand up routine. The Braves don’t take on big (long term) contracts. 4 years at that AV is 4 years too long for Heyward.
Dumping Heyward is a fine idea, but no way Bryant is included in a salary dump deal.
Is the lux tax calculation that complicated and that far off bc it is a mystery. All year everyone said Boston was close to $250M and end up at $228M. They lost several contracts including Porcello at $20M plus, Moreland, Pearce, Leon, and Sandoval money and add $10M and are projected at $238M. Is that really $201M Sportrac has them at? Anyine know the difference from what was stated and final number? Any real insight to 2020 number?
It probably shouldn’t matter to any of these teams, but it does to at least two of them apparently. Millions of dollars for nothing and no playoffs (Sox/Cubs) is not good business. There is no threshold on profit.
I’d say it matters most to the Yankees. They are the ones without a championship since 2009 despite most money spent during that time span.Red Sox just had a parade last year, Cubs a few years ago. That’s why Yanks finally addressed their biggest weakness with a $325M deal for Cole. That should jump them back to a familiar spot in payroll and maybe this time it’ll pay off.