Red Sox Owe $12 Million in Luxury Tax

The Boston Red Sox will have to pay just under $12 million in a luxury tax after being $40 million over the tax threshold. The team’s salary was so high, in fact, that it also caused a new rule to kick in that will drop Boston’s first pick 10 slots in the upcoming amateur draft. As a result, the Red Sox will have their first pick at number 43 overall.

While the impact on draft picks is new, the Red Sox have been very familiar with the luxury tax over the years. They had to pay it during three of their four championship seasons (2013 was the only champion season they were under the cap) and nine of the last 16 seasons. Fortunately, since they were under the cap in 2017, the tax rate for being over in 2018 dropped to 28% (the rate increases every season an organization is over the cap).

It’s noteworthy that while the Red Sox are accustomed to paying the luxury tax, it isn’t terribly common league wide. The only other team that will have to pay for 2018, for instance, is the Washington Nationals — though they’re paying for the second year in a row. Even the Yankees, who folks love to hate for trying to buy championships and had been over the limit for 15 straight years, spent less than the $197 million cap. Their $193 million in salary was $46.5 million less than the $239.5 million Boston paid out.

On top of that, only eight teams have gone over the tax threshold over the years. Plus, the only other teams to have to pay the luxury tax during a World Series championship season were the 2009 New York Yankees and the 2016 Chicago Cubs.

Most of Boston’s fans probably believe the World Series championship makes the $12 million in taxes worth it and it doesn’t seemed to have phased executives inside the organization. Dave Dombrowski, the president of baseball operations, has said the team will likely be going over the tax threshold next year as well. It also makes sense strategically as the team isn’t expected to make any big moves this offseason, which means they don’t really have to worry about the impact a big free agent would have on their relationship to the salary cap.

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