The Red Sox on Sunday reportedly agreed to a six-year, $140 million contract with free agent Trevor Story, by far the single biggest investment of Chaim Bloom’s tenure as Boston’s chief baseball officer.
But instead of laying low after such an exorbitant expenditure — you know, like cooking at home after a wild weekend of painting the town — the Red Sox actually might be inclined to loosen the purse strings further in 2022.
The Boston Globe’s Alex Speier pointed out Monday the Red Sox’s reported deal with Story will push their projected payroll to approximately $236 million. MassLive.com estimated the total to be near $232.783 million.
Whatever the case, it certainly appears the Red Sox are positioned to exceed the $230 million mark, a threshold beyond which clubs are subject to a competitive balance tax. Boston avoided paying a luxury tax in 2020 and 2021.
Why is this significant? Well, if the Red Sox are willing to exceed the $230 million threshold — and the Story deal suggests they are — after resetting their penalties the last two years, then they theoretically can operate with more wiggle room by virtue of not being beholden to that number.
The motivation for staying below the $230 million threshold usually centers around resetting (or maintaining) the penalty level for subsequent years moreso than avoiding the tax itself within a single season. The argument thus could be made that once you’re over, you’re over. And that as a first-time offender, like the Red Sox in 2022, you might as well spend more freely — at least to a point.
It’s worth noting, too, the Red Sox, with a ton of money coming off the books next offseason, are in the unique position of being able to easily dip back under the CBT threshold in 2023, if they so choose. (The first threshold for 2023 is $233 million, per the new collective bargaining agreement.)
Teams can spend up to $270 million this season without also incurring a draft pick penalty. Clubs that are $40 million or more above the $230 million threshold have their highest selection in the next Major League Baseball draft bumped back 10 places — unless the pick falls within the top six selections, in which case their second-highest selection instead moves back 10 places.
Now, this doesn’t mean the Red Sox suddenly are going to add another $30-plus million in payroll simply because they’re a few million bucks over the $230 million CBT threshold. As first-time offenders, they’re subject to a 20% tax on all overages, as well as a 12% surcharge if they exceed the base threshold by between $20 million and $40 million. Money is money, even for franchises with deep pockets.
And there’s still a chance the Red Sox sneak below the $230 million threshold before the end of the season, when each team’s CBT figure is calculated, although that presumably would signify Boston fell out of contention and that we’re having a far different conversation.
But right now, with Story in the fold and a payroll projected to be north of $230 million, it’s fair to wonder whether the Red Sox will add more pieces, either before Opening Day or ahead of the midseason MLB trade deadline. If so, how might this manifest itself? Free agency? Trades? Absorbing another team’s unappealing contract for the purpose of acquiring a high-upside prospect?
We’re dealing strictly with hypotheticals, of course. But at the very least, it seems like the Red Sox are open to surpassing that first CBT threshold, which is a deviation from their strategy the past two seasons, when Boston walked a much-thinner tightrope in trying to bolster its roster.
