New York Yankees

Red Sox get a $13.4 million luxury tax bill on MLB's highest payroll

Red Sox get a $13.4 million luxury tax bill on MLB's highest payroll

Why do the Red Sox seem so adamant about getting under $208 million in payroll for next season?

It's got everything to do with the luxury-tax bill sent to them by Major League Baseball for their MLB-leading payroll of $228 million for 2019. That bill was $13.4 million, according to figures obtained Wednesday by the Associated Press.

The Chicago Cubs ($7.6 million) and New York Yankees ($6.7 million) were the only other teams that will have to pay the luxury tax, according to the AP.  Of the three, only the Yankees made the playoffs in 2019. 

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This bill makes it $50 million in luxury taxes paid by the Red Sox since the system was put in place in 2003. The Yankees have paid a whopping $348 million in luxury taxes and appear on their way again in 2020 after giving right-hander Gerrit Cole a record nine-year, $324 million contract. 

The Red Sox are hoping that their 2019 luxury tax bill is their last one for a while. They have made it a stated goal of getting under the $208 million payroll threshold where the tax kicks in. 

"This year we need to be under the CBT [competitive balance tax] and that was something we've known for more than a year now," Red Sox owner John Henry said back in October. "If you don't reset, there are penalties, so we've known for some time now we needed to reset as other clubs have done."

New Chief Baseball Officer Chaim Bloom, with a history of success with small-payroll Tampa Bay Rays (who had MLB's lowest payroll at $67 million), was brought in and charged with getting the Sox payroll reduced. Rumors of Boston shedding big-money players such as Mookie Betts and David Price in trades have swirled all offseason.

Chaim Bloom reacts to Gerrit Cole signing with Yankees

Chaim Bloom reacts to Gerrit Cole signing with Yankees

Chaim Bloom is well-aware of just how big of a move the Yankees made when they signed Gerrit Cole to a nine-year, $324 million contract on Tuesday. But the Red Sox chief baseball officer is staying patient.

Speaking to reporters Wednesday at the Winter Meetings in San Diego, Bloom addressed the Cole signing and noted the importance of the front office not being too reactionary in their approach to the offseason.

"Look, we want to beat the Yankees as badly as anybody, trust me,” Bloom said. “I think it’s just a question of us being able to step back and say, ‘What is the best approach for us to do that?’ The more we feel like we’re being reactive to other teams’ moves, I think the more we’re playing their game. We might be pushing ourselves further from that objective rather than helping ourselves.”

Bloom was the Tampa Bay Rays' senior vice president of baseball operations prior to joining the Red Sox, so he's no stranger to seeing both Boston and New York making noise in the offseason. His experience with a much lower payroll in Tampa helped him learn to not be distracted by the big splashes made by division rivals.

“Having had the good fortune of being in this division for a long time, I’m kind of used to seeing the Yankees, and the Red Sox for that matter, do things over the years,” Bloom said. “It didn’t change things that much in terms of how I reacted to that. I think it’s one of the great things about the challenges of being in, what has been over the course of time probably the toughest division maybe in all of pro sports. You expect the standards to be very high and you expect your rivals to be constantly looking to improve, constantly find ways.

"The approach from team to team might vary, but you expect them to constantly be doing things to make themselves better. It’s important to not get distracted by that. It’s important to focus on your own club and how you can accomplish your goals.”

The Red Sox have made it clear they're aiming to shed payroll ahead of the 2020 season, so don't expect any Cole-like deals for Boston any time soon. Instead, prepare for stars like David Price and/or Mookie Betts to be shipped out of town before Opening Day.

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2020 World Series odds: Gerrit Cole-to-Yankees a wake up call for Red Sox

2020 World Series odds: Gerrit Cole-to-Yankees a wake up call for Red Sox

The New York Yankees are all in on 2020.

The Yankees landed the prize of the free-agent class Tuesday night, reportedly agreeing to a nine-year, $324 million contract with right-hander Gerrit Cole.

Adding one of the top pitchers in Major League Baseball gives the Yankees a ridiculously loaded starting rotation led by three hurlers with multiple All-Star appearances:

1. Gerrit Cole
2. Luis Severino
3. Masahiro Tanaka
4. James Paxton
5. Domingo German/Jordan Montgomery

Add that star-studded pitching staff to a fearsome lineup that led MLB in runs scored last season, and you could argue the Yankees, on paper, have the best team in baseball.

The sportsbooks apparently agree: Hours after New York reportedly landed Cole, New Jersey sportsbook PointsBet made the Yankees the co-favorites to win the 2020 World Series along with the Los Angeles Dodgers at +450 odds.

The Boston Red Sox aren't too far behind, as PointsBet has them at +1200 odds, tied with the Washington Nationals and Atlanta Braves for fourth-best in MLB.

But the Yankees acquiring Cole certainly puts the Red Sox on notice.

Boston finished 19 games back of the Yankees in the American League East last season while missing the playoffs, and its longtime rival appears to have widened the talent gap.

That puts the pressure on Red Sox chief baseball officer Chaim Bloom and his staff, who must decide whether to keep Mookie Betts entering the final year of his contract or trade the superstar outfielder while his value is still high.

Another item on Bloom's agenda is what to do with pitcher David Price, who reportedly is garnering interest at MLB's Winter Meetings as a potential trade piece to help Boston get under the luxury tax.

It's worth wondering, however, if New York acquiring Cole changes the calculus for Boston: Could the Sox really offload Betts and/or Price knowing that their AL East rival is gearing up for a World Series run?

We'll find out soon enough.

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