Will the Red Sox Turn to Jon Lester Next? Or Cole Hamels? How About the Luxury Tax?

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Will the Red Sox Turn to Jon Lester Next? Or Cole Hamels? How About the Luxury Tax?

Analysis and Commentary, Chicago Cubs Rumors, MLB News and Rumors

boston red sox logoI have arrived in Chicago, and I am relieved to see that, generally speaking, not too much went down while I was on the road. Mostly, it was just the unfolding and immediate aftermath of the Boston Red Sox’s huge moves today. In case you missed it this morning, the Red Sox were on the verge of finalizing deals with both Pablo Sandoval and Hanley Ramirez. To say that is a market-shifting set of moves would be an understatement, and I discussed some of the potential impacts this morning.

Now, it looks like the deals really will happen. Jon Heyman says both deals are done, pending physicals, and that Sandoval will be getting five years and about $100 million (so, about the value of Luis Valbuena … ). Ken Rosenthal pegs Ramirez’s deal at four years and $88 million with a vesting option that could take it to five years and $110 million (that explains why the early 5/$90M reports were looking so cheap – they were inaccurate).

Assuming the physicals don’t scuttle anything … now what? It’s going to be the talk around baseball for a little while, as the Red Sox very obviously have a positional glut that will require some trades, and very obviously have a pitching need that they’ll have to address. As I said before, signing these guys is not going to take the Red Sox out of the market for Jon Lester:

Not that a deal is close:

And not that the Red Sox’s moves solely impact their own pursuit of Lester. The moves may have brought another team into the mix:

But if the Red Sox don’t land Lester, folks are already jumping to some Cole Hamels conclusions (with the obvious, attendant Cubs relevance):

While I don’t think the Red Sox are going to (or should) part with a guy like Betts or a guy like Xander Bogaerts in a Hamels deal, and I remain of the mind that the Red Sox will go very hard after Jon Lester, there is one interesting thing to point out: to the extent Boston did want to at least try and stay under the $189 million luxury tax cap this year (they’re already set to be within $10 million of it before adding any pitching), trading for Hamels could help them, because the Phillies could eat some salary. And, for complex reasons I won’t go into here aside from pointing it out, depending on how you structure the payments of the money sent to the trading team, guys with big contracts like Hamels’ can have a disproportionately helpful effect on payroll for luxury tax purposes.

Thus, if the Red Sox find a taker for Yoenis Cespedes at his full salary (easy enough – it’s just $10.5 million (though it’s $8 million for luxury tax cap purposes)), and find a team to take on some of Shane Victorino’s remaining salary, they’ll probably be in a position where they could easily add Lester or Hamels and still stay under the cap.

… but, I gotta be honest, I’m not even sure they’ll care about the cap this year. There used to be a huge incentive to get under the cap for large market teams tied to revenue sharing (especially if you’d been over the cap in successive years), but that’s basically gone now. For the most part, the only penalty for going over the luxury tax cap for a team like the Red Sox is, well, the luxury tax. That tax? Just 17.5% of the overage for a first-time offender. In other words, if the Red Sox go to $200 million in payroll in 2015, they’ll have to pay a whopping $1.9 million in tax. That’s not going to stop them from doing anything.

So, in the end, I still don’t see much of a financial relationship between what the Red Sox did today and what they do going forward. If they want Lester, they can afford to sign him. If they want to trade for Hamels, they can do that. They could probably do both. Or they could dip into other pockets of the pitcher trade market – Jordan Zimmermann? Johnny Cueto? Jeff Samardzija? Or they could go after a second tier starting name or two.

The world is the Red Sox’s oyster right now, and they’re probably looking even more attractive to free agents today – and they certainly have more trade chips today – than they were yesterday.


Author: Brett Taylor

Brett Taylor is the Editor and Lead Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.