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Would it be better to just go over the luxury tax limit?
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Post by thelavarnwayguy on Dec 12, 2013 0:10:59 GMT -5
I think we all know what the answer to this is but let's think outside the box just for the heck of it. I expect most people to say NO. A resounding NO. But consider the below:
1) We just won the world series. If we are not going to go for another win now, when would we ever do it? Is there not some logic to going for the championship now as the team is poised for a decent chance to win it all again next year? For example, why not go for a Tanaka and a Choo if they might well put the team in a position to win it again? Would going over the cap in such an instance position us better going forward, or worse?
2) We have a strong core which will in many instances be no longer with us very soon unless we restock and extend now. We have a ton of contracts finishing up with only a handful of core players under control after the next two years.
3) In 2016, as I understand it, we inherently will not be eligible for revenue sharing dollars, along with the other 14 biggest market teams. Which might indicate an increased willingness for some teams to go over the luxury tax guidelines since there will be fewer incentives to stay under the cap amount for big market teams. Ergo, potentially a huge bidding war for the top players by 2016. Rapid salary inflation.
4) In 2016, with fewer teams eligible for revenue sharing dollars, the small market teams which are eligible would have an increasing share of that pie. It's concievable that a Marlins franchise, for example, could get $50 mil per year in free monney just for being in the league. How will that shake out for those small market teams? Will that not cause salary inflation also?
*** I think a case could be made that the Yanks have already decided to blow right past the cap this year, and that if they do stay under it this year, there is very little indication they would stay under it by 2016. They, the Dodgers, and teams like the Redsox might decide that it is better to start locking up top talent now and / or next year, before costs escalate.
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Post by rjp313jr on Dec 12, 2013 0:22:47 GMT -5
I don't think any fan is hoping they stay under the tax. We just try to make predictions based on what we expect the team to do.
I think the biggest pushback your getting on Choo is that we don't feel he's nearly the cornerstone you do. He's atrocious vs LHP. I don't want to pay a guy that kind of coin when he should be platooned. He's amazing vs RHP so his final numbers are still very good, that doesn't change him not being able to hit lefties. I would've resigned Jacoby if they were going over the tax by a lot with a big signing.
One fear I have about spending huge is teams seem to end up with a lot of big over paid crappy players in their lineups because of their massive contracts. You say the window is now, but last year at this time the window started in 2015. Also, this franchise has won 3 WS in 10 years with vastly different teams each time. Doesn't that tell us something?
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Post by thelavarnwayguy on Dec 12, 2013 0:34:11 GMT -5
Choo and Tanaka would be pretty helpful going forward if you want to win another championship. Choo is probably not a platoon player in most people's eyes and he potentially would hit close to .300 overall if he played in Fenway with his hit chart. He would be a mini Big Papi according to his hit chart. And a lot of teams are balking at paying him what he is currently looking for. He may come in at a lower price than has been expected simply from less demand. And his hit chart and overall capabilities are potentially best optimized in Fenway's left field compared to any other park in the league. He may actually be worth more to us than to any other team.
Regardless, the issue is abstract. I don't think it is as cut and dry as it looks. Eveyone bets that they stay under the cap. They have said they will. Their actions indicate that they will. There is tremendous incentive for them to. But is it in the long term interest of the franchise to stay under the cap this year. I'm not so certain that is true if we want to stay competitive in our division. I like staying under the cap and taking the picks but if they do go over the cap, go over it bigtime IMO.
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Post by jimed14 on Dec 12, 2013 9:58:31 GMT -5
I don't see how we can simply spend money and not hurt ourselves in the long run, the lone exception being Tanaka. But we could easily sign Tanaka and stay under the tax.
We've got a great farm system and we should use it. Going over the tax probably means we aren't going to and these 8 possible starting pitchers will never pitch for us and we'll be signing them in 8 years for way too much money once their best years are over.
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Post by mainesox on Dec 12, 2013 10:28:42 GMT -5
I didn't actually vote in the poll because I don't think either answer is the right answer; I would say yes, but only assuming the right player, on the right contract is available, and I'm not sure that player is out there this year. Also, it would probably be better to trade one, or even both of Dempster and Peavy before going significantly over the limit.
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Post by FenwayFanatic on Dec 12, 2013 10:33:10 GMT -5
I don't see how we can simply spend money and not hurt ourselves in the long run, the lone exception being Tanaka. But we could easily sign Tanaka and stay under the tax. We've got a great farm system and we should use it. Going over the tax probably means we aren't going to and these 8 possible starting pitchers will never pitch for us and we'll be signing them in 8 years for way too much money once their best years are over. This is what im thinking too. |
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Post by fenwaythehardway on Dec 12, 2013 10:53:14 GMT -5
I'm astonished more people don't want to go over the cap. What brings you more joy, great Red Sox teams or Red Sox teams with great profit margins?
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Post by fenwaythehardway on Dec 12, 2013 10:54:54 GMT -5
I don't see how we can simply spend money and not hurt ourselves in the long run, the lone exception being Tanaka. But we could easily sign Tanaka and stay under the tax. We've got a great farm system and we should use it. Going over the tax probably means we aren't going to and these 8 possible starting pitchers will never pitch for us and we'll be signing them in 8 years for way too much money once their best years are over. I don't understand. Why does spending money automatically mean that the Red Sox aren't going to use their farm system? Are the Dodgers trading Puig because they've already got a bunch of more expensive, crappier outfielders? |
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Post by jimed14 on Dec 12, 2013 11:06:05 GMT -5
I don't see how we can simply spend money and not hurt ourselves in the long run, the lone exception being Tanaka. But we could easily sign Tanaka and stay under the tax. We've got a great farm system and we should use it. Going over the tax probably means we aren't going to and these 8 possible starting pitchers will never pitch for us and we'll be signing them in 8 years for way too much money once their best years are over. I don't understand. Why does spending money automatically mean that the Red Sox aren't going to use their farm system? Are the Dodgers trading Puig because they've already got a bunch of more expensive, crappier outfielders? Where exactly can we spend money and not block prospects and the development of young players on the roster. The Dodgers aren't exactly in a great place having Crawford, Ethier, Kemp and Puig in the OF. |
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Post by jmei on Dec 12, 2013 11:30:54 GMT -5
The Dodgers aren't exactly in a great place having Crawford, Ethier, Kemp and Puig in the OF. They supposedly had the same logjams last year at SP and OF. What happened? Beckett, Lilly, Capuano, and Harang made a total of 15 starts and the Dodgers ended up having to add two starting pitchers at the deadline (Nolasco and Volquez). Kemp missed half the season and sucked the other half, while Crawford and Ethier both missed time as well. The Dodgers had to give Skip Schumaker, Jerry Hairston, and Scott Van Slyke a combined 152 appearances and 89 starts of replacement-level-esque play. I can't stress it enough-- depth is important. |
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Post by jimed14 on Dec 12, 2013 11:42:51 GMT -5
The Dodgers aren't exactly in a great place having Crawford, Ethier, Kemp and Puig in the OF. They supposedly had the same logjams last year at SP and OF. What happened? Beckett, Lilly, Capuano, and Harang made a total of 15 starts and the Dodgers ended up having to add two starting pitchers at the deadline (Nolasco and Volquez). Kemp missed half the season and sucked the other half, while Crawford and Ethier both missed time as well. The Dodgers had to give Skip Schumaker, Jerry Hairston, and Scott Van Slyke a combined 152 appearances and 89 starts of replacement-level-esque play. I can't stress it enough-- depth is important. It is super important, but they can be the ones with the $60 million outfield not including Puig. I don't really want any part of that. And there is no indication that the Red Sox have an unlimited budget like the Dodgers, so having that much tied up in older declining players pretty much assures that the depth would disappear, leaving us in a 2012 situation. |
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Post by mredsox89 on Dec 12, 2013 11:53:39 GMT -5
Stay under the cap unless it's for that one "elite" guy. Because the minute you go over the cap, you can expect the team to tighten the budget to get back under. Of course I want the best product out on the field, but I also know that if they can build from within, they'll have more money in the next 3-5 years to potentially spend on guys that come up, and/or be able to flip low cost guys for prime players prior to getting to FA
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Post by fenwaythehardway on Dec 12, 2013 11:56:31 GMT -5
They supposedly had the same logjams last year at SP and OF. What happened? Beckett, Lilly, Capuano, and Harang made a total of 15 starts and the Dodgers ended up having to add two starting pitchers at the deadline (Nolasco and Volquez). Kemp missed half the season and sucked the other half, while Crawford and Ethier both missed time as well. The Dodgers had to give Skip Schumaker, Jerry Hairston, and Scott Van Slyke a combined 152 appearances and 89 starts of replacement-level-esque play. I can't stress it enough-- depth is important. It is super important, but they can be the ones with the $60 million outfield not including Puig. I don't really want any part of that. And there is no indication that the Red Sox have an unlimited budget like the Dodgers, so having that much tied up in older declining players pretty much assures that the depth would disappear, leaving us in a 2012 situation. That's nothing more than a decision that ownership has made. |
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Post by thelavarnwayguy on Dec 12, 2013 11:57:33 GMT -5
I agree that depth is important, as was clearly shown last year. But it may cost more money than we want to spend to achieve it this year. And I think Mainesox has a great point as well regarding options to sign. I've gotta say also that looking ahead, fewer top talents appear to be reaching free agency. We may see the current situation continue, and maybe even get worse. 2015's FA list below, which includes Hanley, Kershaw, Homer Bailey and a few others but not much for position players at all and indications that some of these guys get extended by the Dodgers and not be available next winter: www.mlbtraderumors.com/2013/02/2015-mlb-free-agents.htmlIn other words, the list of available players doesn't appear to get better going forward. The team locking up this year's best players may have a strategic advantage going forward. Assuming we have some solid young talent coming up in JBJ, Cechinni, Xander etc...maybe it makes a lot of sense to solidify a top team with a couple more judicious FA signings as well this year. For example Tanaka might be crucial to winning it all in a few years as potentially a top 10 pitcher in the league. If we have 2 of those we probably are favored in the playoffs. Maybe we can sign him for 5-6 years and that makes a key difference in another 2-3 championship runs. I think if Choo does drop under $120 mil over 6 years maybe we should look to sign him as well. Those 2 guys could be key to maintaining the Redsox as a top team going forward. That would require going over the cap I would think. Assuming we trade a Peavy or Dempster maybe we can do a Tanaka without going over the cap but I wouldn't count on it. That last $20-30 mil per year could get real expensive. But maybe the team which makes that decision puts itself in position for several more championships as well. |
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danr
Veteran
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Post by danr on Dec 12, 2013 12:05:57 GMT -5
I voted yes because it doesn't matter to me if the Sox pay a penalty if it means they become a better team. It shouldn't matter to them, either. They still will make a healthy profit. However, I wouldn't do it just for the hell of it. I would only do it to get really good players.
I'm not sure this is the year to do it, unless the team can trade for a player (or players) with a big contract, or can trade for a player and sign him to a bigger contract for a longer term (i.e. Stanton). I don't think any of the FAs left is probably worth a huge amount of money, even Choo. I don't know enough about Tanaka.
Right now trade possibilities don't seem very feasible, but they may become so in 2014.
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Post by thelavarnwayguy on Dec 12, 2013 12:21:36 GMT -5
As satellite and internet TV continues to evolve with Netflix, Roku, Hulu, Chromecast etc... the value of networks like NESN should continue to rise substantially. I can get NESN now in southern CA but I effectively have to pay for it. There are even reports that Google is already including some Chromecast code into iterations of Droid, so that people will have even better access to channels like NESN on their cellphones. I'm projecting in my business planning that there will be as many "TV Channels" as cell phone apps someday, and maybe even more as it will technologically be easy to get distribution through such networks and people will increasing use search functionality to find programming to watch ( as well as the current "If you like this, you may be interested in this" algorithms ). The world of internet TV is exploding. 99% of the world just hasn't recognized the magnitude of it yet. Internet TV might become almost as ubiquitous as the internet is today, with almost everyone having their own "channel" as they have personal websites, facebook profiles and blogs now.
Just as mlb.com and MLB Networks increased the revenue for the league substantially, teams which own their own networks have tremendous incentive now to increase fan participation around the world just from their TV rights distribution. There are many reasons why TV rights deals are exploding in value. This is yet another, and it extends down to the team level.
I vote for going over the cap this year.
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Post by rjp313jr on Dec 12, 2013 13:50:59 GMT -5
This is a trick question that has too many variables to answer, but if we are boiling it down to it's simplest form and removing "money restrictions" then as fans it's simply "yes". Like Fenway said, what the hell do I care if the owners make money? They're going to make money even by going over - way over the CBT. Hell, even if they broke even or lost tends of millions each year for a while they'd still be way ahead of the game. Their investment itself has already more then doubled in size.
Henry's group, paid $700m for the Red Sox AND 80% of NESN. Last year coming off their terrible season Forbes estimated the Red Sox value alone at 1.312B... that's without NESN and before the World Series win. Truthfully, they could probably sell for more than their valuation. The Dodgers sold for well over their valuation. Boras said it best when he mentioned spending limits not being a physical barrier.
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Post by bluechip on Dec 12, 2013 14:05:58 GMT -5
Going over for the sake of going over makes no sense, obviously. Would I go over to get Tanaka? Yes because you have a chance to land Lester's potential replacement for a lot less money.
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Post by Guidas on Dec 12, 2013 14:35:44 GMT -5
Only if you are doing so to get a player of need, and if you are sure you can get back below it within 1-2 years. For instance, I would go over to sign Tanaka. After getting him you trade two of Peavy/Doubront/Dempster and crawl back closer to the luxury tax line, but let's say Sox are still over $10M or so. Beyond cornering a nice piece of the pitching market and having insurance if Lester decides to leave for free agency, #1-2 starters will be even harder to find next year with all of Kershaw, Scherzer and Lester being available in that category for 2014 free agency. Even if you resign Lester he should presumably be perceived to be declining toward #3 status by year 2/3 of his extension. None of the in-house replacements currently project as #1-2 starters in the first two years of their careers as MLB starters, and legitimately Barnes/Ranaudo/Owens are more likely #3s or less. Finally, despite who you move in the wake of a Tanaka acquisition - which would almost certainly send you over the luxury tax threshold - you have coming off the books after 2014 season: Peavy $14.5M
Dempster $13.25M
Ross $3.1
Gomes$5M
Peirzynski:$ 8.25M
Uehara: $4.25M
Ortiz $11M
Lester $13.25By going over this year in that move, you gain elite pitching and still lose enough potential salary - assuming you re-sign Ortiz ($14-16M) - to pursue an extension with Lester and one of the other two top starters. The rest of the market will also be pretty bland (position player stars highlights include Hanley Ramirez (31), Billy Butler (29) and…uh…. ) and presumably the farm will be filling positions of need such as catcher & pen. So spend more now, save more next year, retain trade chips (Stanon et all on the dream list) and still be at a high level next year. |
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Post by mrnewengland on Dec 12, 2013 14:42:08 GMT -5
I said no, but not because I care how much John Henry spends. There aren't any FA out there that I want to go and get this year and I would rather have financial flexibility to make a trade mid-season or go after a FA in the future that would make my pants tight to have in a Red Sox uniform.
Spend the money... just be smart about it.
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Post by joshv02 on Dec 12, 2013 14:54:19 GMT -5
I'm astonished more people don't want to go over the cap. What brings you more joy, great Red Sox teams or Red Sox teams with great profit margins? Yeah, I don't really care if the Red Sox make a great profit or not. So, in the abstract, I don't care if they spend $300mm on their payroll. That said, they are going to have a budget of something, and whatever that is I care how they spend that money within that budget. I don't care what the limit is - only how effectively it is used. I agree - I don't see why people here care if that budget is $189mm or $289mm. It isn't their money. |
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Post by jimed14 on Dec 12, 2013 15:00:19 GMT -5
I want to primarily build through the draft and fill in holes with trades and free agency.
There's almost no way that you could go over the cap unless you're doing something wrong.
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danr
Veteran
Posts: 1,871
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Post by danr on Dec 12, 2013 16:34:25 GMT -5
As satellite and internet TV continues to evolve with Netflix, Roku, Hulu, Chromecast etc... the value of networks like NESN should continue to rise substantially. I can get NESN now in southern CA but I effectively have to pay for it. There are even reports that Google is already including some Chromecast code into iterations of Droid, so that people will have even better access to channels like NESN on their cellphones. I'm projecting in my business planning that there will be as many "TV Channels" as cell phone apps someday, and maybe even more as it will technologically be easy to get distribution through such networks and people will increasing use search functionality to find programming to watch ( as well as the current "If you like this, you may be interested in this" algorithms ). The world of internet TV is exploding. 99% of the world just hasn't recognized the magnitude of it yet. Internet TV might become almost as ubiquitous as the internet is today, with almost everyone having their own "channel" as they have personal websites, facebook profiles and blogs now. Just as mlb.com and MLB Networks increased the revenue for the league substantially, teams which own their own networks have tremendous incentive now to increase fan participation around the world just from their TV rights distribution. There are many reasons why TV rights deals are exploding in value. This is yet another, and it extends down to the team level. I vote for going over the cap this year. Here in Portland, OR, right now there is only one high-speed Internet provider, Comcast, and the only alternatives to their cable TV service are the satellite services, which, when all the come-ons are sorted out, wind up being just about as expensive. But since we got a Blue-Ray player, our watching of conventional TV has dropped to just some news/talk programs, like MSNBC and local news, and most of the rest is through Netflix. I haven't yet compared the cost of NESN vs MLB. Has anyone else done that? |
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Post by jimed14 on Dec 12, 2013 17:02:37 GMT -5
As satellite and internet TV continues to evolve with Netflix, Roku, Hulu, Chromecast etc... the value of networks like NESN should continue to rise substantially. I can get NESN now in southern CA but I effectively have to pay for it. There are even reports that Google is already including some Chromecast code into iterations of Droid, so that people will have even better access to channels like NESN on their cellphones. I'm projecting in my business planning that there will be as many "TV Channels" as cell phone apps someday, and maybe even more as it will technologically be easy to get distribution through such networks and people will increasing use search functionality to find programming to watch ( as well as the current "If you like this, you may be interested in this" algorithms ). The world of internet TV is exploding. 99% of the world just hasn't recognized the magnitude of it yet. Internet TV might become almost as ubiquitous as the internet is today, with almost everyone having their own "channel" as they have personal websites, facebook profiles and blogs now. Just as mlb.com and MLB Networks increased the revenue for the league substantially, teams which own their own networks have tremendous incentive now to increase fan participation around the world just from their TV rights distribution. There are many reasons why TV rights deals are exploding in value. This is yet another, and it extends down to the team level. I vote for going over the cap this year. Here in Portland, OR, right now there is only one high-speed Internet provider, Comcast, and the only alternatives to their cable TV service are the satellite services, which, when all the come-ons are sorted out, wind up being just about as expensive. But since we got a Blue-Ray player, our watching of conventional TV has dropped to just some news/talk programs, like MSNBC and local news, and most of the rest is through Netflix. I haven't yet compared the cost of NESN vs MLB. Has anyone else done that? You can't watch NESN out of market to watch baseball. You have to buy MLB.TV or Extra Innings on cable/satellite. The games get blacked out otherwise |
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Post by thelavarnwayguy on Dec 12, 2013 19:42:58 GMT -5
Only if you are doing so to get a player of need, and if you are sure you can get back below it within 1-2 years. For instance, I would go over to sign Tanaka. After getting him you trade two of Peavy/Doubront/Dempster and crawl back closer to the luxury tax line, but let's say Sox are still over $10M or so. Beyond cornering a nice piece of the pitching market and having insurance if Lester decides to leave for free agency, #1-2 starters will be even harder to find next year with all of Kershaw, Scherzer and Lester being available in that category for 2014 free agency. Even if you resign Lester he should presumably be perceived to be declining toward #3 status by year 2/3 of his extension. None of the in-house replacements currently project as #1-2 starters in the first two years of their careers as MLB starters, and legitimately Barnes/Ranaudo/Owens are more likely #3s or less. Finally, despite who you move in the wake of a Tanaka acquisition - which would almost certainly send you over the luxury tax threshold - you have coming off the books after 2014 season: Peavy $14.5M
Dempster $13.25M
Ross $3.1
Gomes$5M
Peirzynski:$ 8.25M
Uehara: $4.25M
Ortiz $11M
Lester $13.25By going over this year in that move, you gain elite pitching and still lose enough potential salary - assuming you re-sign Ortiz ($14-16M) - to pursue an extension with Lester and one of the other two top starters. The rest of the market will also be pretty bland (position player stars highlights include Hanley Ramirez (31), Billy Butler (29) and…uh…. ) and presumably the farm will be filling positions of need such as catcher & pen. So spend more now, save more next year, retain trade chips (Stanon et all on the dream list) and still be at a high level next year. I think Butler has an option year. I don't think even he is available next year and discussions have been in place by the Dodgers to bring Hanley back as well. There is probably very little available next year for position players. It may soon be that only one or 2 teams will be able to effectively buy their way into the playoffs. When the top players are available, we need to bid on them. If we do not, we miss out on that method of improving the team and just go into Tampa Bay mode. Which I like doing to a large degree but I don't think it makes sense totally. It's unlikely we win at a high percentage simply by emulating the Tampa Bay approach. |
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