BOSTON — Flex or scrounge. Muscle up for today, conserve for tomorrow.
The Yankees could have continued in their familiar path this season. They are, after all, the only team to have paid the luxury tax every year since the system was installed in 2003 — the cost roughly $341 million. For 2018, let’s call this the Red Sox path.
Or the Yankees could have believed there was a potential to have their financial cake and eat it too by being championship quality this season while going under the threshold to gain long-term rewards. For 2018, let’s call this the Dodger model.
The Yankees — like their NL behemoth twin in Los Angeles — sank beneath the $197 million floor. The problem is, the Yankees are in the AL, where the Red Sox loaded up in a way most Steinbrenner-esque, producing a roster that outdistanced the Yanks in both the AL East and Division Series.
“The [luxury-tax] threshold is a guidepost for us,” Red Sox president Sam Kennedy said. “We are cognizant and mindful of it and the penalties. But we don’t have a hard and fast rule about it.”
Boston has yo-yoed under and over the threshold most of the past decade. The Red Sox were under in 2017. That allowed them to reset the penalties to the lowest levels for 2018, when they knew they would go over. The Red Sox then decided to really go for it, notably with the signing of J.D. Martinez, but also other additions that would drive them beyond both of the next two penalty levels that raise the tax at $217 million and $237 million.
The cost will be about $11 million in tax this year, a drop of 10 spots in the first round of the 2019 draft and higher taxes next season, when Boston officials know the payroll again will swell beyond at least the first threshold, which in 2019 will be $206 million. Kennedy said the Red Sox did not zag above the threshold because they knew the Yankees were zigging underneath.
“The mandate since [John Henry and Tom Werner] bought the team since 2002 is to be competitive on the field and play baseball in October every year,” Kennedy explained. “That is a tough goal to strive for, but under this ownership we have done it eight or nine times (actually 10 in 17 years) and won three titles.”
The Red Sox now have a chance for a fourth title in that period. The Yankees have won a single title in that period while making the playoffs 13 times in 17 years. The Dodgers have not won it all since 1988, but are the only team to reach each of the last six postseasons.
Los Angeles has had the highest tax bill for the past four seasons and gone over the previous five, paying about $150 million in tax in that period. The game’s financial heavyweights were able to make significant additions — the Yankees with Giancarlo Stanton in the offseason, the Dodgers with Manny Machado in July — and still shoehorn under the threshold. There was no obvious player available to the Yanks whom they did not acquire this year because of financial reasons.
New York and Los Angeles — like Boston this season — will drop to the lowest penalties the next time they go over the threshold. The Yankees were working toward this goal for years, with Hal Steinbrenner insisting the team could win without running $200 million-plus payrolls. The Yankees have not definitively said if they will go back over next season. The Dodgers did not have a financial heavyweight like the Red Sox in their division to overcome. The only other team to exceed the $197 million threshold was the Nationals, who missed the playoffs as arguably the most disappointing club in the majors.
“Every team is always balancing short-term needs while keeping in mind long-term expenditures,” Dodgers GM Farhan Zaidi said. “A lot of [going under in 2018] was driven by where our roster was at. We had no big needs [to have to fix in free agency].”
