Throughout the offseason, the Astros constructed their roster with the luxury tax threshold in mind. That was most apparent in the club’s signing of right-hander Jake Odorizzi to a two-year guarantee that came with an extremely low-priced 2023 player option the veteran righty will almost certainly reject.
The obvious purpose was to spread out the contract’s average annual value — a club’s luxury tax balance is calculated by summing the AAV’s of the team’s financial commitments, not their actual payroll in any given season. Because player options are treated as guaranteed seasons for luxury tax purposes, Odorizzi’s deal is tabulated as a three-year contract with a $7.83MM AAV even though the most likely outcome is that he departs after collecting a total of $20.25MM for two years of work. That creative accounting allowed the Astros to enter the season with a luxury tax balance just under $207MM, in the estimation of Cot’s Baseball Contracts, a little more than $3MM shy of the $210MM first tax threshold.
Houston’s proximity to the tax threshold would seemingly limit their options for making midseason acquisitions, but Astros general manager James Click suggested the organization could exceed the threshold to accommodate a trade. In an appearance on The Sean Salisbury Show, Click said owner Jim Crane “has been very clear” to the front office that the $210MM mark “is not a hard line” the organization cannot go past.
That’s not to say the Astros will certainly go out and acquire one or more players on high-priced contracts. Click promptly cautioned that whether to exceed the threshold “is something we have to factor into our decision-making process” based on the ancillary penalties that come with doing so, particularly with regards to qualifying offers.
Under the terms of the collective bargaining agreement, a team that goes over the threshold and loses a player who had rejected a qualifying offer in free agency receives a compensatory pick after the fourth round of the upcoming draft. A team that neither receives revenue sharing (the Astros don’t) nor exceeded the luxury tax would receive a compensatory pick after Competitive Balance Round B, which directly follows the second round. Ultimately, exceeding the tax would knock the Astros’ compensation for losing qualified free agents from a pick in the 70-80 overall range to a pick in the 125-140 range. Paying the tax would also carry increased draft and international signing bonus penalties were they to sign a qualified free agent from another club.
The Astros, who lost their first and second round draft picks in both 2020 and 2021 as punishment for the sign stealing operation, are virtually certain to offer a QO to Carlos Correa and could plausibly issue one to Justin Verlander as well. Given their recent lack of high picks, the potential ability to stockpile selections in 2022 could carry extra import to the organization.
Houston exceeded the threshold last season. Were they to do so again, they’d be subject to a 30-percent tax on any overages between $210MM and $230MM because they’re a tax payor for the second consecutive year. (They’d be subject to higher tax rates in the unlikely event they pushed their CBT ledger north of $230MM this season). That’d also set them up for potential higher penalties were they to exceed the threshold a third consecutive time in 2022, assuming the current system remains in the next collective bargaining agreement.
That’s not to say there’d be no justification for the Astros going past the $210MM mark this season. At 53-33, they’re 4.5 games up on the A’s in the AL West. Houston has the best record in the American League and the top run differential in MLB. This team looks the part of a legitimate World Series contender, so there’s certainly merit to the idea of giving them the best chance to win in 2021.
However, the system disincentivizes teams (particularly so in the Astros’ case) from barely exceeding the threshold to make marginal upgrades. As Click explained to Salisbury, “the worst thing we can do is go over by $1. If we’re going to go over, we’re going to go way over. … If we have an opportunity to bring in somebody that we feel like dramatically improves our chances to win the World Series (whose contract would exceed the threshold), that’s something Jim Crane has shown he’s willing to do for this franchise.”
It remains to be seen if the Astros find an upgrade significant enough for ownership and the front office to deem that worthwhile. With the offense having been far and away the league’s best and the rotation performing well, fortifying a rather young bullpen would seem to be the priority for the Houston front office in the coming weeks.
I love my team.
“Jack’s Click has no ownership mandate for integrity.” There, I fixed it.
All teams should stay under that number, zero reason to ever go over draft picks and farm system is how you stay competitive long term. All the Ivy League gms know this though because they’re insanely smart. Fans struggle with it though.
After the first 5-10 picks in any average draft the players are all a roll of the dice. Look back at all of the QO comp picks the last 10 years and see how many have made it to MLB. This love of each and every draft pick is foolish if it’s the reason for not improving your team. The first year of the QO had Mark Appel #1 overall. Only comp pick that worked out was Aaron Judge taken 32nd after the Yankees had picked Eric Jagielo ahead of him. Dodgers didn’t have a comp pick and they landed Cody Bellinger with the 124th pick of the 4th round. After picking players like Chris Anderson and Brandon Dixon ahead of him. The Tigers got Chad Green in the 11th that year. Mookie Betts and Brett Gardner were both 5th round picks in their drafts and 24 teams picked players ahead of Trout. The draft is a crapshoot and if my favorite team wasn’t picking in the top 10 I could care less about their draft picks. I wish big market teams would stop using it as an excuse because they know it’s not a good one. Teams get way more good MLB prospects out of international free agency and trading veterans than they do from the 1st round of the draft.
Got to agree mostly with you here. But you do lose International pool money when going over the tax line. 😉
The issue isn’t whether or not they make the big leagues. Those picks are valuable because they can be used in trades.
Rays do it more spectacularly, but Astros amazing at roster construction and filling in the gaps
Does purchasing trash cans lids count against the Luxury Tax?
Not sure the Astros need to do anything. The roster looks strong enough to go deep in the playoffs. Ya, I know; they need bullpen help….who doesn’t? But the A’s will likely not do anything of any substance, the M’s are a year away (tho closing fast, and you KNOW DiPoto will do SOMETHING). And I just can’t see the Angels, even with a healthy Trout and Rendon. The Rangers? Definite sellers.
Why spend the money and suffer the draft/international consequences?
Since 2017 opener, I have had the delightful experience (apparently unfamiliar to all other posters here) of letting my front office front office, and my manager manage, almost to my complete satisfaction. Very few, if any, personnel decisions, and very few if any in-game decisions, that I have thought second-guessable; trust these guys IMPLICITLY, and watching how they do it has taught me MUCH about winning baseball, and adjusting to win more baseball as changing trends and circumstances dictate.
Ducky Buckin Fent
So…what was your pre-2017 Astros experience like? Going back 5 or 6 seasons.
LOL! My 2015 & 2016 experience was pretty fun, but wasn’t totally geeked on the whole thing yet.
Losing direction entirely 2007-2010 (The Ed Wade/Carlos Lee years) really sucked, because THAT’S NOT HOW YOU DO IT YOU IDIOTS!!!! plus switching leagues at gun point, I was UTTERLY disgusted, and had had enough.
My pastor in the early Crane/Luhnow period would organize trips to see the indy Sugar Land games, and was ALWAYS optimistic about Astros near-future, Altuve, then Springer – he was right.
Crane/Luhnow did it right – I began loving baseball in 1969, with a young Astros team mostly scouted, signed, and developed years earlier by Paul Richards – You want OBP? Check out Joe Morgan, Rusty Staub, and Jimmy Wynn for that. Crane/Luhnow (and now Click & team) have taken Connie Mack, Branch Rickey, Earl weaver, et al, and gone next level with it.
I am having a blast! Thanks for asking, Ducky! 🙂
Ducky Buckin Fent
Well…ya know, I’ll drink to that.
Yankees/Astros this weekend.
Let’s do this.
I think this has been one of the better rivalries in baseball these last few years
Ducky Buckin Fent
Dusty & Boone trotting umps out to the mound every 8 pitches to check for foreign substances 🙂
I have a feeling they will stay under it.
MLB learning from the NFL.
I dunno – MLB has a LONG and storied tradition of doing whatever it takes 🙂
Winning again. Fixed that for you.
yeah, no kidding – check THIS out. Adding this years results only makes it MORE epic for Astros & Dodgers
All these franchises been postering for years like they are gonna blow out the cap but none ever do. Let’s see it !
The Astros farm system is very weak so I don’t see them being able to get anyone substantial without eating some money. Their window to contend is quickly closing though so it would make sense for them to make any move necessary to win now
“Their window to contend is quickly closing though so it would make sense for them to make any move necessary to win now”
no better way to close that window than thinking like that; also, there is ZERO reason to believe their window is closing, at all. No reason it *has* to.
Considering they’re looking at potentially losing Correa and Greinke after this year and several of their key players are on the wrong side of 30, I’d say the window is definitely closing
They don’t need Greinke, or even Verlander, next season.
Without those 2 former Cy Young winners they still have 6 really good starting pitchers: Lance McCullers, Jake Odorizzi, Framber Valdez, Jose Urquidy, Luis Garcia, and Cristian Javier.
And those two vets are their most expensive players, so all the money they will save goes to re-signing Correa to a long-term deal. No way will they let him walk like they did with Springer last year.
So a rotation consisting of a washed Odorizzi, injury prone McCullers, and 4 guys with little experience and you don’t see a problem there? Also I don’t think you understand the concept of being a free agent. Correa is free to sign with anyone and if that lowball extension offer the Astros gave him is any indication, he’s gone
Astros are kind of a new paradigm – sorta like Rays but with more money – they are very very good at mix-and-match with role players, and at catcher, plus they seem to get the most possible out of every player they bring up, because of, I suspect, a culture of cheerful winning.
Altuve, Brantley, and Gurriel are all over 30, having (again) all star years, and no reason to think next year will be appreciably different for them; everybody else of the regulars and rotation are under 30, except Grienke who is ageless and Odorizzi who is 31, not old by solid starter standards.
Have NO idea what will happen with Correa – but we’ve lost Springer, Cole, Morton, Keuchel, McHugh, and a few lessers over the years with ZERO diminution to our W/L %.
And, minus Springer this year, our offense is performing at exactly the same exalted heights it did in 2019, with Springer.
I’m not a fan of seeing players leave … but, it’s working.
Odorizzi hasn’t allowed a run in his last 15 innings, and, over last 14, has allowed 4 hits, and 2 walks, with 15 Ks. The rest are pitching VERY well this season.
In your recent experience, when have the Astros NOT plugged a gap, fairly inexpensively, with a player no one else seems to value much, who performs very well for us?
That being the case, what makes you think the brain trust won’t keep doing that?
Over the last few years the Astros have had at least 1 guy to count on for 30+ starts and 200+ innings. Take Greinke out of the equation and who steps up as that guy? The teams Odorizzi has faced in that stretch are a big factor in those results. I don’t know who you’re referring to when you say “players no one else seems to value much…” Luhnow is gone and he was the brains of the operation. Their farm is the weakest it’s been in years and they typically don’t give big contracts to free agents. Also factor in the division getting tougher with the Mariners on the rise and the Angels having some big contracts coming off the books. The Astros may still very well be a good team but this year might be their best shot to win another WS with this group of players
Totally agree Ronk, the Astros should still have an above average team, just like they have this season, for 3 or 4 more years. But the league this year is so mediocre, this is why it will be there best chance with this group of players.
You saying they are only above average this season?
Thomas E Snyder
Why do you think their window is closing? People said that last year and they were a few unreal catches by the Rays from going to another WS. People were saying that this year and they are the best team in the AL.
I mean I spelled it all out already but since you need me to repeat it. The Astros are looking at losing Correa and Greinke this offseason. If they leave who replaces them? The AL West will also likely be more competitive next year. Those factors don’t bode well for the Astros going forward
That’s next season. This season is not next season.
And that is why I said they should make any move necessary to win now because things will only get tougher for them from here
Greinke has been their worst starting pitcher this year
That’s not really accurate, IMO. Except for early Odorizzi, they have all 7 performed pretty well all year.
And if they resign Correa? Not worried about Greinke as he’s nothing more than a 3 at this point. Basically you are a fan of another team that is hopefully the awesomeness of Houston fades away.
And I asked that before seeing your original stupid explanation.
He is a VERY GOOD 3 then.
Wow this thread paints a perfect picture of just how clueless Astros fans are
Thankfully, Astros, rather than listening to you, just keep making right moves and winning.
Lmao, they cheated to win their one and only WS and have underachieved ever since. Keep living in fantasy land
I’m sorry this is happening to you
I’m sorry you weren’t born with a functioning brain
just take the L compadre
Please, the only one taking an “L” here is you spewing the same nonsense repeatedly in this comments section
If the Astros have underachieved by going ALCS, World Series Game 7, ALCS Game 7 since 2017- then you must support some mythical team in your made up fantasy land that wins the World Series every year. In which case, cool.
Looks like we have another smooth brain here who needs everything spelled out for them. The year after winning the WS the Astros added Cole but got eliminated in the ALCS. The next year they added Brantley and Greinke but lost in the WS. The next year they only made the postseason because of the expanded playoff format and got eliminated in the ALCS. They were also still cheating in 18 and 19. I’d definitely call that underachieving
They were cheating in 19 now?! Dam, why don’t we just throw 2020 in there too?! Why not 2021? Let’s just go ahead and assume 2022 as well!
Also, going to a championship series 4 straight years is pretty much the furthest thing from underachieving. “But their roster changed so it’s underachieving”, you’re a moron. What team kept the same roster over the last 4 years? Lost Morton, McCullers, Osuna, etc. still made the CS’s.
The Astros have 7 pitchers who have started 8 or more games and have performed above league average.
Take away Grienke and that still leaves 6. 5 of them are 27 or younger.
Joe Smith is the only bullpen arm who will be a free agent. Not that the bullpen has been good (except Pressly) but that can’t be a reason for the window to be closing.
Correa is the only position player who will be a free agent. A big hole, admittedly but.
Altuve is playing as good as ever and only 31. 12 of 13 position players on the best offense in baseball are returning next year.
Alvarez, Tucker, Straw, Bregman, McCormick, and Toro are all 27 or younger.
Yeah- the window is closing. Keep dreaming.
Yes their cheating scheme ran from 17-19, this isn’t news. I’ll also leave this dictionary definition to help educate you. The school system in the Houston area must be pretty bad because you are some of the least intelligent people I’ve ever interacted with on here. https://www.merriam-webster.com/dictionary/underachieve
Ronk, they lost Springer, Morton, Devinsnki, Gattis, Mccain, Cole, etc and they’re still tied for the best record in the AL. The Astros clearly got an effective front office. This thread shows paints a perfect picture of you underestimating the Astros. What are you gonna say if they do well next season? “Next year blah blah blah blah”?
Jeff Luhnow was a very good GM and he was largely responsible for assembling these Astros, he’s gone. James Click might be a good GM himself but he hasn’t really had to make any major decisions yet so who knows how he fares. Also I never said the Astros will be bad next year. I said I see them taking a step back and I see the AL West as a whole getting better next year
Like I said below, slow your roll on this great front office thing. It wasn’t to long ago the Astros were the laughing stock of baseball, and worst team for many of years. I’m surprised they have any fans with all that tanking they did. You better have a little bit better chance at pulling off a rebuilt with that kind of tank job, but If I were a fan of there team. I’d want it done in a more professional way. They’re not small market like they perceived to be for so many years. You can rebuild and still stay competitive, and for that reason, the Astros front office is no where near the tops in the game.
Like I said below: your initial comment was odd base and still is, just like the one above. No one said the Astros front office is the best in the game. People are saying it’s effective and really good because it is. How you’d your team to go about things done is you. More power to you, Swingthefnbat.
Ever since Luhnow’s departure I legit haven’t even known their GMs name until this post.
He’s REALLY REALLY good, thankfully.
Get another good reliever.
You remember this one? “July 27, 2018: Traded by the Minnesota Twins to the Houston Astros for Jorge Alcala and Gilberto Celestino.”
You remember the recent Orioles series? How about the Detroit series? Get another good reliever.
Yes, I remember those series VERY well; I was just pointing out that the last time – the last TWO times – they needed a good reliever, they went out and got one.
Exactly. Let’s get another.
I suspect they’re on it 🙂
The Astros have a nice 1st half record. I don’t think any team playing them thou, doesn’t feel like they have a really good chance to win. I’ve got the Astros as an above average team this year, who are feasting on the mediocrity, in pretty much all of baseball. You really have this, this year, 1 very good team in the Dodgers (healthy), maybe 4 above average teams and 25 mediocre to bad teams. There’s a lot of parity this year for sure, I suppose this is good for baseball, but some prefer the years of the super teams thou… It’s UP FOR GRABS this year folks, even more than normal.
Nonsense. The Astros have the best record and run differential in all of baseball against teams over 0.500, and it’s not even close
Exactly my point, the Astros are doing a great job of feasting runs on the mediocrity. To bad teams.
I don’t think you’re understanding, the Astros have the best record by far in baseball to against teams with above .500 winning percentage.
Where the Astros run into a problem is playing down to their competition. They have been swept by the Orioles, Rangers, Rockies and Tigers.
They split a series with the Tigers as well.
It’s just a fan of another team making an excuse. No different than people discounting LA’s championship from last season.
Like I said, let me repeat it for a 3rd time. What good teams? Who cares about record, the entire AL this season is mediocre,and all are with some flaws…. somebody has to win.
As others pointed out, your initial comment was off base.
You pick out a team, and I’ll pick out a flaw. Again, mediocrity every where u look.
That’s not what I was referring to. Also, if you think the whole AL is medicore, of course you’re gonna see flaws. Your mind is made up.
Teams around the tax threshold like to say there’s no mandate, but there is.
It’s surprising they have played this well without Bregman in the lineup. He’s due back after the All-Star break. Good news!
I’m doubting he will be back before August. Houston is starting to run away with the West so no point in rushing him.
Cheaters always prosper no need to worry about salary cap trash can lids,electronic gadgets cost very little.Manfred in your pocket no problem.LOSERS
I’m sorry this is happening to you.
This made me laugh. Hard.
This team will have a lot of money off the books when greinke and verlander comes off the books, their young rotation is solid and still have a good offense, them and the dodgers are like the rays but with more money to spend. As long you trade veterans for prospects and draft well , free agency isn’t an issue. I wish the Yankees could do this and stop the excuses about the luxury tax.
I would slow your roll on the Astros. They had a nice little run the last 5 years, but in the last decade without looking it up. They probably have a losing record. You don’t remember all those tanking year’s, before the trash can years. Hahaha
I remember those 100 loss seasons. I willingly watched them during those seasons as well.
Since the beginning of 2015 season (5 full years, plus truncated 6th year, plus half year so far this season), EXCEPT for the Dodgers, Astros have, by far, best record in MLB, and they are not that far away from Dodgers.
They are ONE HUNDRED SEVENTY games over .500 in that period.