BOSTON -- Even though David Price is now a member of the Dodgers, his decision to opt out of the 2020 season could have a major impact on the Red Sox’ finances this year.
As part of the February trade that sent Price and Mookie Betts to Los Angeles, the Red Sox agreed to pay Price half of his salary -- a total of $48 million -- over the final three years of his contract, taking on a $16 million per year hit against the competitive balance tax threshold through 2022. With the season shortened to just 60 games, the Red Sox were due to pay Price about $5.925 million (half of the roughly $11.85 million he is owed on a prorated basis this year) but now will likely save that amount with Price deciding to sit out the year due to concerns related to the coronavirus pandemic.
If a player is considered “high-risk” for complications stemming from COVID-19, he can opt out of the season and still receive his full prorated salary and service time. If a player who opts out is not considered “high-risk” -- and Price doesn’t appear to be -- he will forfeit his entire salary for that season. Price forfeiting his salary means that the two teams paying him (the Red Sox and Dodgers) get to keep the money he would have earned in 2020.
Calculating the effect of Price’s decision on the competitive balance tax threshold is a more complicated exercise, as the unprecedented nature of the shortened season has led to a number of issues related to details baseball’s collective bargaining agreement. Any changes to the CBT system require an agreement between MLB and the MLB Players Association, and it appears the sides have not yet worked out whether or not players who opt out of the season will still count against clubs’ thresholds this summer.
For the Red Sox, the decision on that fine point could be particularly impactful. After trading Betts and Price and making some other moves in spring training, Boston’s CBT number is projected to be about $198 million -- roughly $10 million under the $208 million threshold the team desperately tried to get under this winter. If it’s determined that CBT hit for Price (and any other players who opt out throughout the league) is forgiven, then the Red Sox would be under the $208 million penalty mark by more than $25 million, giving them plenty of room to potentially add salary during the season.
Considering the safety risks relating to player movement in the middle of a global pandemic, it’s unclear if there will be an active trade market this summer. But having $26 million of room to work with instead of $10 million would mean the Sox could operate without any worry about going over the CBT threshold if they are in contention and want to augment their roster before the Aug. 31 trade deadline.
Having Price’s CBT hit come off the books would make it more likely for the Red Sox to pursue an available player like San Diego’s Wil Myers or free agent outfielder Yasiel Puig. Boston considered taking on Myers’ salary ($61 million remaining through 2022) and acquiring talented young pitching from San Diego in February and was loosely linked to Puig earlier in the week. Being comfortably under the $208 million threshold would make it much more feasible for the Red Sox to pursue one of those players or someone who becomes available over the summer.
Related links:
Boston Red Sox luxury tax penalties won’t be reset if coronavirus cancels MLB season (report)
Boston Red Sox trade rumors: Wil Myers deal with Padres considered ‘unlikely’ (report)
"save" - Google News
July 05, 2020 at 05:52AM
https://ift.tt/2ZJzakO
David Price opting out will save Boston Red Sox nearly $6 million, could mean CBT relief leading to expensive - MassLive.com
"save" - Google News
https://ift.tt/2SvBSrf
https://ift.tt/2zJxCxA
Bagikan Berita Ini
0 Response to "David Price opting out will save Boston Red Sox nearly $6 million, could mean CBT relief leading to expensive - MassLive.com"
Post a Comment