NATIONAL HARBOR, Md. -- The newly agreed upon Major League Baseball collective bargaining agreement features higher taxes and additional penalties for exceeding the competitive balance threshold -- and don't think the Red Sox haven't noticed.
The Red Sox went over the threshold in both 2015 and 2016, and should they do so again in 2017, they would face their highest tax rate yet at 50 percent. Additionally, there are provisions that could cost a team in such a situation to forfeit draft picks as well as a reduced pool of money to sign its picks.
None of which means that the Red Sox won't definitively stay under the $195 million threshold for the upcoming season. At the same time, however, it remains a consideration, acknowledged Red Sox president of baseball operations Dave Dombrowski.
"You would always like to be under the CBT (competitive balance tax) if you could,'' offered Dombrowski. "And the reason why is that are penalties attached for going over, so nobody likes to (pay) penalties.
"However, the Red Sox, if you follow history, have been up-and-down, right around that number. We were over it last year and the year before that. So I would prefer (to be under in 2017). However, a little bit more driving force in that regard is that there are stricter penalties now attached to going over. And some of them involve, for the first time, differences in draft choices and sacrificing money to sign players and that type of thing. So there's a little bit more drive (to stay under).
"But I can't tell you where we're going to end up. Eventually, does it factor (in)? Yeah. But until we really get into the winter time and see where we are, will I make an unequivocal (statement about staying under the CBT)? Maybe we won't. But there are penalties that I would rather not be in position to incur.''
Dombrowski stressed that he's not under a "mandate'' from ownership to stay under the CBT.
"But I am under an awareness of the penalties,'' he said. "Last year, I would have preferred to be under, too, but it just worked for us to be above it, because we thought that would be the best way to win a championship at the time.''
He added: "I think we're going to have a good club either way.''
But it's clear that the CBT is part of the reason the Red Sox aren't being more aggressive toward some premium free agents such as first baseman/DH Edwin Encarnacion, who is said to be looking for at least a four-year deal at an annual average value of more than $20 million.
Currently, the Red Sox have nearly $150 million in guaranteed contracts for 2017, plus a handful of arbitration-eligible players, some of whom (Drew Pomeranz, Jackie Bradley Jr.) will see significant raises.
Together, with insurance premiums and others costs tallied, the Sox stand at nearly $180 million, just $15 million under the 2017 tax.
"I've said all along I've wanted to stay away from long-term contracts for hitters at this point,'' Dombrowski said of the current free agent class, "(especially) with some of the guys we have in our organization coming. I just haven't felt that that's a wise thing to do.''
The Sox saw two potential DHs come off the board over the weekend, with Carlos Beltran signing a one-year $16 million deal with Houston and Matt Holliday getting $13 million from the Yankees. Either could have filled the vacancy left by David Ortiz's retirement, but Dombrowski would also be taking on another another eight-figure salary, pushing the Sox well past the CBT.
"I figured we would wait to see what ends up taking place later on,'' said Dombrowski, "and see who's out there.''