The Red Sox and the luxury tax
by Bososx13 on Feb 7, 2012 8:19 PM EST
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everyone is saying they'll go over, but I don't get it. The luxury tax is 178 million, Cots has the Sox at 152 million. They have 26 million left. For Ortiz's arbitration the Sox went with 12 million and Ortiz went with 16 million. The Sox are probably going to win that. That will put them at 164 million, still enough for a pitcher. My guess is that they are waiting until the Ortiz arbitration is finalized so they know they won't go over the cap and will still get Oswalt. I think this is why the Sox have waited to get a pitcher. They have a 6 million dollar offer to Oswalt right now, but I think they'll increase it to 10 million and get him after the Ortiz arbitration.
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Cot's is based upon 2012 Salaries
The Luxury Tax is based upon AAV, and includes 40-man, medical, etc. plus you have to add in all of the league minimum/small salary/pre-Arb guys (Bard, D-Mac, Melancon)
Buchholz is a good example
He runs 3.75 million for 2012 but runs about 7.425 million as AAV
Lester and Pedroia also run a bit more
Adjustments
Buchholz increases by 3.75 million
Pedroia increases by 1.3 million
Lester increases by 2 million
Rough Estimate of Bard, Melancon & McDonald at 1.75 million
Ortiz at 16 million
and you are at: 177.6 million not counting other stuff (medical/bonuses, et al) and not counting someone like Cook making the roster
I wouldn't be too sure about that
Their best option would be to try to work out a deal before the hearing.
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I wouldn't be too sure.
16 million is ridiculous…but a 150k raise is also kinda ridiculous. Insulting, really.
The arbitrator has to choose between the two. I really think it’s 50/50.
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OTM | Silver Seven
He made $12.5M in 2007 on his new deal.
That year he hit .332/.445/.621, probably his best season ever. This year he hit .309/.398/.554, did he exceed expectations? I would say no he did not. Did he meet them? I’m certainly not disappointed in him, it was a good effort, I would say he met expectations. He was 32 when he signed that deal, I would probably consider that to be his peak deal, I would consider it a very rare occurrence for players who are no longer playing at their maximum prime level to be handed 25% raises. I consider the 150k raise to be far, far more reasonable.
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You are looking at it far too sabermetrically.
If you look at it from the standpoint of “reward for employee performance”, then it is likely far from what he should have gotten. He was the best, by far…BY FAR…in his “class”. For his efforts, he was given a brand new two-slice toaster.
I agree with much of what you say, but I am not convinced that an arbitrator will look at it strictly by those numbers. In fact, if Ortiz had gone 14.5 – 15, I’d be convinced that Papi’d win.
Galactus does as he pleases. Because Galactus is drunk.
Look in the mirror and ask yourself: "Am I a hater troll?"
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He was given $12.5M worth of toasters, don't forget that.
He’s the best and he is paid as the best (Young and VMart were also DH’s paid about the same, but they aren’t strictly DHs or weren’t at the giving of the deal as in Young’s case).
I just have to believe that there is a ceiling as to what a player who can’t field a position anymore and is 36 years old can make, I’d like to think that the money he made when he was an even better version of himself at the peak of his play is fair enough. He was paid appropriately in 07, and maybe he was rewarded in the year’s since and part of me can rationalize a pay decrease for him.
It’s not even sabr to me, it’s just common sense, if you fail to exceed expectations (with expectations being what he did for the same salary in 07) you don’t deserve a huge raise like that. You get cost of living increase.
I am Sandy's bitch
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@WadePSU
I mean, the Saber answer is that he's worth about 4 WAR these days
So he should get paid at least $16M, maybe more if you consider the value of a win to a big market team is more than to a small market team.
That’s not my thinking, I’m looking at it more like an office performance review, did you fail to meet, meet or exceed the standard? Exceeding carries a big raise, meeting gets you the cost of living, maybe a little more and failing brings into question your future at your place of work. Consider the standard that Ortiz has set for himself, I feel this year he met the standard so the amount of money he makes should be a lot closer to what he made this year, rather than closer to a number 25% larger.
Clearly baseball and its huge salaries isn’t exactly like your commune or my office building, but it is a business and from a business standpoint, the huge salary bump doesn’t make sense, the smaller one does.
I am Sandy's bitch
We Are Because You Were
@WadePSU
I'm not saying I entirely disagree
But when you continually prove yourself to be the single elite player in your position, then you are certainly exceeding “the standard”. When you add on top of that that you are the undisputed face of the business, providing non-baseball value from an image point-of-view, a negligible bump in salary is likely not deemed acceptable.
I’m not arguing that David Ortiz is worth his 16M. Not by a damn sight. I’m saying that by only offering Papi an extra 150K, they’ve painted themselves into a corner where the arbitrator has to choose between an ungodly amount of money and an insulting raise, which is akin to leaving a penny on the table as a tip.
Galactus does as he pleases. Because Galactus is drunk.
Look in the mirror and ask yourself: "Am I a hater troll?"
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OTM | Silver Seven
I guess our difference is
Is that I don’t think he exceeds the standards. He is an elite player for his “position” and he has been paid as an elite player at his position for several years now. He hasn’t gotten better, and he’s actually gotten measurably worse since his peak 5 years ago, he’s been the face of the franchise for almost a decade also. Those are all things that have been factored into previous deals as well, deals he agreed to sign in his peak that said he was worth at most $12.5M.
At either pricepoint he is STILL the highest paid DH in baseball (among DH’s that agreed to deals as DH’s, so not counting Young there), I just can’t see how it can be insulting to pay someone the same money they made back when they were a perennial MVP candidate, which they aren’t now, he should consider himself lucky that a team is willing to pay him that much in a league where the DH spot has seemed de-emphasized lately for roster versatility.
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Neither seems especially reasonable to me.
One more reason to be angry at this FO.
Galactus does as he pleases. Because Galactus is drunk.
Look in the mirror and ask yourself: "Am I a hater troll?"
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OTM | Silver Seven
I was going to say something along these lines myself...
Marc Normandin posted on this, and linked to another piece showing the math, that essentially shows that 1) there’s almost no way the Sox could get under $178 million without moving more salary and 2) even if they were “under” to start the 2012 season, which they were under to start 2011, they likely know they’ll have to add additional salary during the season, so that will put them over too.
So, there’s no truth to the idea that they are waiting for Ortiz’ deal to make a bigger offer to Roy. They have likely made a decision on what they think he’s worth for 2012, and if he chooses to take another deal (Reds/Cardinals/Rangers move someone to add him, or he gets similar money from Philly to go back there, and avoid the AL East), we roll with what we’ve got.
Sorry… but I don’t think we’re adding another pitcher before the season starts… now we have to hope we put a strong start together, in contention as the summer heats up, and make a move before the deadline.
I thought we’d never win it all. And then we went down 0-3 to the Yankees in 2004, and I thought it was the end of the world.
Wait ’til THIS year!
right, and I'm pretty sure the medical, etc is something like 12-14 million
though Bard isn’t pre-arb. He’s a super 2
This came out of the ProJo article on 1/23/12
Adrian Gonzalez, $22 million
Carl Crawford, $20.3 million
Josh Beckett, $17 million
David Ortiz, $14.575 million*
John Lackey, $13.8 million
Kevin Youkilis, $10.3 million
Daisuke Matsuzaka, $8.7 million
Jacoby Ellsbury, $8.05 million
Clay Buchholz, $7.5 million
Dustin Pedroia, $6.75 million
Jon Lester, $6 million
Bobby Jenks, $6 million
Andrew Bailey, $4.025 million*
Jarrod Saltalamacchia, $2.5 million
Jose Iglesias, $2.06 million
Ryan Sweeney, $1.75 million
Daniel Bard, $1.6 million
Nick Punto, $1.5 million
Alfredo Aceves, $1.275 million*
Kelly Shoppach, $1.35 million
Mike Aviles, $1.2 million
Matt Albers, $1.075 million
Andrew Miller, $1.04 million
Franklin Morales, $850,000
Junichi Tazawa, $550,000
Darnell McDonald, $500,000
Mark Melancon, $500,000
Scott Atchison, $500,000
Minor-league salaries and player benefits, $10 million
Total: $173.25 million
Note that this is pre – Cody Ross and assumes a midpoint for Ortiz
if we give Ortiz 12.65, the Sox offer, that has us at 171.35. Then we can add in Ross'
3 million to 174.35. I think at the end of the season, we can pick up an option on Lackey for missing the season that will make his AAV go down like 2 .5million. so we’re looking at 171.5 million. Peter Gammons is reporting Oswalt has no other offers. Hopefully he’ll take a 5 or 6 million dollar deal and we’ll also stay under the tax.
Speier adds it all up here:
The graphic helps put it all together, when you add in minor league deals and players likely to be seen, medical benefits, bonuses, we’re looking at about $185M give or take a couple depending on arbitration for Ortiz, needing more or less minor league players, etc. Without dumping a big contract like Youk’s, as configured, this team is over the threshold when it is computed.
I am Sandy's bitch
We Are Because You Were
@WadePSU
Regarding the tax
Is there an increasing penalty regarding how much is spent? By that I mean, if the Sox go over by say, 1 million, is the % rate still the same as if they went over 20 million? I haven’t read into the new rules in depth but i’ve read that in a couple of places.
Assuming that’s the case and the Sox lose in arbitration to Ortiz, then whats stopping them from upping the offer to Oswalt? If you’re going to go over anyway, why not shell out the few extra million to get the SP you need? It looks like Oswalt is gonna have to take a 1-year deal…there isn’t much risk in that, especially knowing he’ll be off the books next season.
From my understanding, the rate doesn't change by how MUCH you go over
But rather how OFTEN. The first year you go over, all payroll over the threshold is taxed at A%, if you go over the next year, the rate is B% and if you go over a third time all of it is taxed at C% and any subsequent year in a row after that is taxed at that rate. (I think there are only three rates, not positive on that though).
I am Sandy's bitch
We Are Because You Were
@WadePSU
I think you're right in that with the old CBA which ended in 2011 there were three levels
Now they’ve added a fourth level of 50%. Before the highest was 40%, which is what the Yanks had to pay last year since they’ve been over every year.
by The Name is Dalton on Feb 8, 2012 9:11 AM EST up reply actions
If they are definitely over
then the only thing stopping them from going hard after Oswalt is whatever is rattling around in their collective heads in the Front Office.
Galactus does as he pleases. Because Galactus is drunk.
Look in the mirror and ask yourself: "Am I a hater troll?"
@#$%ing Twit: @blogtard
OTM | Silver Seven
As Rogue said, it matters how many times in a row you go over.
1st time over = 17.5% (decrease from previous CBA)
2nd time in a row over = 30%
3rd time in a row over = 40%
4th time or more in a row = 50% (increase from previous CBA of 40%
One important change to the structure is that when you move below the threshold, your team is treated as if you are going over for the first time the next time you go over. Before I believe (correct me someone if I’m wrong) it only dropped it down one level for each year you stayed under. My understanding is:
Years 1-3 you go over so in Year 3 you are paying 40%(level 3:what the Sox pay this year if over)
Year 4 you go under the threshold
Year 5 you go back over.
Old: In year 5 you pay the 30% from the 2nd level
New: In year 5 you pay the 17.5% from the 1st level
The Red Sox paid some luxury tax in 2010 and 2011. If they had been able to get under this year, then next year they could go over and 17.5% instead of 50%. So basically I see them doing as much as possible to get under next year if they can’t this year.
It also should be noted that the current CBT max payroll is $178 for this year and next but then will go up to $189 the next three years.
by The Name is Dalton on Feb 8, 2012 9:10 AM EST up reply actions
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