The most up-to-date content on the planet
this just in
 RSS
WEEI » This Just In » Lester, Ortiz deals wouldn't impact '14 tax
Fri, 03/21/2014 - 8:19pm  

Lester, Ortiz deals wouldn't impact '14 tax

There was a time when the Red Sox were very careful to announce extensions after Opening Day. Players who hammered out the parameters of long-term deals in spring training but waited until after the first day of the season to announce them included David Ortiz, Coco Crisp, Josh Beckett, Clay Buchholz and Adrian Gonzalez.

The reasoning was sensible enough. If the extensions had become official prior to the start of the season, then the players’ salaries for the season for which they were under contract would be recalculated for luxury tax purposes. So, for instance, in 2011, Adrian Gonzalez made $6.3 million. Had his seven-year, $154 million extension become official when the Sox traded for him from the Padres or during spring training, his deal would have been treated as an eight-year, $160.3 million pact — meaning a luxury tax figure of just over the average annual value of $20 million a year. By waiting until mid-April to announce the deal, Gonzalez counted for just $6.3 million in 2011 — thus saving the Sox millions in luxury tax penalties that year.

That history created an expectation that, if the Sox reach agreements with David Ortiz (who is making $15 million in 2014 but who counts for $17 million against the luxury tax) and Jon Lester (who is making $13 million in 2014 on a team option, but whose luxury tax figure is approximately $9.37 million), they wouldn’t be announced until after the start of the regular season to avoid a potential luxury tax hit.

Wrong.*

The new Collective Bargaining Agreement, which took effect starting in the 2012 season, eliminated the recalculation of a contract’s AAV as a result of an extension. So long as the second deal does nothing to alter the terms of the first, the two contracts are treated as separate.

So, if the Sox reach agreement with either player on an extension starts in 2015 and doesn’t alter what they’re owed for the coming season, then those new deals won’t alter the player’s salary as calculated for luxury tax purposes. If Ortiz agrees to a one-year extension, regardless of whether it’s for $15 million or $1 billion, his 2014 AAV would remain $17 million for the purposes of calculating the Sox’ luxury tax this year. Similarly, as long as a deal with Lester wouldn’t take effect until 2015, then the team could announce it tomorrow or in June with no difference in its implications for the 2014 payroll — the left-hander will count for $9.37 regardless of the timing of the announcement.

Even with that alteration, and despite the fact that a resolution of extension talks is expected before the end of spring training, that doesn’t necessarily mean that an announcement will happen in Fort Myers. The Sox may well decide that, if they reach agreement with either player, they’d prefer to save the announcement for the start of the regular season, most likely in Boston. Or perhaps it won’t be until the start of the regular season that the two sides will be able to finalize the details of an extension — if one is coming at all.

But regardless, the timing of any announcement won’t be driven by luxury tax implications. That aspect, at least, of extension strategy is now a thing of the past.

* – (WEEI.com was guilty of propagating the misunderstanding that an extension could alter a luxury tax hit for a season if announced prior to Opening Day. We regret the error.)




Audio On Demand

Phil Perry, CSNNE on the …

Phil Perry, CSNNE on the Patriots and NFL free agency

Pete talks with The Senator, Phil Perry about the Patriots trading for Dwayne Allen, ruling out a return to New England for Martellus Bennett. They also talk about the potential future of Patriots backup QB Jimmy Garoppolo and some of the big names in NFL free agency

NFL SUNDAY...the final segment of the year -- 2-5-17

Pete, Thornton and Price give their final thoughts and predictions for the Super Bowl.

Gabe Morency, Sports Rage TV and FNTSY Sports Net, joins NFL SUNDAY to go over the various props for Super Bowl 51 -- 2-5-17

Gabe calls the boys to handicap one of the biggest gambling days of the year - Super Bowl 51! Gabe has all the point spread info down and gets to all of the major prop bets that interest him.

Kirk and Callahan- Will I…

Kirk and Callahan- Will Isaiah Thomas win a title in Boston? 3-7-17

Kirk, Gerry, and Alex Reimer discuss whether or not Isaiah Thomas will win a title in Boston.

Kirk and Callahan- Celtics lose after Thomas mishandles the ball 3-6-17

Gerry, Kirk, and Trenni react to the Celtics loss against the Suns.

Danny Picard gives his thoughts on the Celtics, the incredible season Isaiah Thomas is having and potential trade opportunities for Boston -- 2-19-17

The NBA trade rumor mill is beginning to swirl as the deadline approaches and Picard is ready to go! He talks about the possibility of Jimmy Butler coming to Boston, why Isaiah Thomas is not getting enough respect and the future of the Celtics.

Bradfo Sho, Ep. 19: Being…

Bradfo Sho, Ep. 19: Being Drew Pomeranz

Rob Bradford is joined by Drew Pomeranz, the Red Sox pitcher who so many are wondering if he will be able to live up the value placed on him by the Red Sox when trading away top pitching prospect Anderson Espinoza last July. Pomeranz goes into detail regarding his injury last season, the stem cell treatment he underwent in the offseason, and how he thinks things stand heading into the 2017 campaign.

Bradfo Sho, Ep. 18: Tom Caron

Rob Bradford is joined by Tom Caron, the man responsible for guiding the ship when it comes to Red Sox pregame and postgame shows, along with various other important duties with the New England Sports Network, including offering the play-by-play for both TV and radio throughout spring training. Tom and Rob discuss a variety of topics, such as nickname conundrums, radio vs. television, criticizing the team, behind-the-scenes for the broadcasts and where the industry is going.

Bradfo Sho, Ep. 17: The curious case of Carlos Quentin

Rob Bradford is joined by two-time All-Star outfielder Carlos Quentin, who is attempting a comeback with the Red Sox this spring. Quentin's path back to baseball involves almost quitting the game less than a year ago, losing 40 pounds and trying to sell himself to general managers all over Major League Baseball. Quentin explains his journey, which has led him to the back fields at JetBlue Park.

The 1972 Bruins

Highlights

Saturday Skate - Bruins and the All-Star break

Guys talk the Bruins season so far and the All-Star Break

Saturday Skate - Firing Claude

Guys discuss if or when the Bruins will fire Coach Julian

K&C - Bradford’s play-b…

K&C - Bradford’s play-by-play of the tornado; Riley Dennis is sick of cis sexism 3-24-17

Hour 4. Rob Bradford had some great insight into the tornado at last night’s Red Sox game. The guys don’t understand what Riley Dennis is trying to argue for.

K&C - Lavar Ball isn’t a factor in drafting Lonzo; Ken Laird was on the Tampa pregame show 3-24-17

Hour 3. The guys don’t think Lavar Ball has any influence on Lonzo’s draft stock. Ken Laird gave a lively performance on the Lightning pregame show.

K&C - Mr. Skin joins the show to weigh in on his Whack-It bracket 3-24-17

The American treasure Mr. Skins joins the show to talk the Whack-It bracket and take calls.

OMF - LaVar Ball is a hea…

OMF - LaVar Ball is a head coach's nightmare, 3-24-17

HOUR 4 - Glenn, Lou and Christian go over a great story in USA Today's "For The Win" blog, which talks about how LaVar Ball was a nuisance towards the head coach Chino Hills high school team, where Lonzo, LaMelo, and LiAngelo play.

OMF - The Whiner Line, 3-24-17

The weekly edition of the Whiner Line

OMF - Does the Bruins losing streak prove that Claude was NOT the problem? 3-24-17

HOUR 3 - The guys get back into some Bruins talk and try to parse out some of the blame pie. Also, Glenn thinks Roger Goodell is lying, and that Colin Kaepernick is getting a raw deal.

Freestyle Friday Hour Fou…

Freestyle Friday Hour Four - Malcolm Butler, NFL Draft, more Bruins

Final hour brings in the Patriots to the topic table, and still some more Bruins anger.

Freestyle Friday Hour Three - Bruins Meltdown Deja Vu

Mostly angry fire from Bruins fans this hour, with a little NCAA mixed in as well.

Freestyle Friday Hour Two - Umass Embarrassed, NCAA tourney, Bruins

Three topics on the table in hour #2 of Freestyle Friday

Ep. 56: Howie Carr

Ep. 56: Howie Carr

Kirk Minihane, future radio hall of famer, sits down with current radio hall of famer Howie Carr. Kirk and Howie talk about Howie's latest book Kennedy Babylon. If you like famous people engaging in sex scandals, hard drug taking, and murder this is the podcast for you. Its a fascinating look at Boston's most famous family and the problems that took the family down.

Ep. 55: Kirk has a proposal for Callahan and the Producers

Kirk Minihane, host and overlord of the morning show, brings Gerry Callahan and producers Chris and Ken into the studio to hear his show proposal. Kirk is thinking about making some changes to the morning show and wants to hear his crew's opinion.

Ep. 54: Richard Deitsch

SI's Richard Deitsch returns to the podcast to talk with Kirk about the K&C casting couch, how ESPN wimps out when they are called out for slander, what's going on with Bill Simmons, and the rise of podcasting.

SoccerCast - Is Christian…

SoccerCast - Is Christian Pulisic already better than Landon Donovan?

Ben, Russ, and Alex discuss the USMNT victory over Honduras, Christian Pulisic's development for club and country, and Bastian Schweinsteiger's move to the Chicago Fire.

The Real K&C - Hardos, strawmen & fart noises 3-24-17

Ken Laird and Chris Curtis have a Friday edition of the K&C recap show as 'Hardo Mut' was in with Kirk and Gerry.

Enough About Me - Ep. 56: Howie Carr

Kirk Minihane, future radio hall of famer, sits down with current radio hall of famer Howie Carr. Kirk and Howie talk about Howie's latest book Kennedy Babylon. If you like famous people engaging in sex scandals, hard drug taking, and murder this is the podcast for you. Its a fascinating look at Boston's most famous family and the problems that took the family down.

Enough About Me - Ep. 56:…

Enough About Me - Ep. 56: Howie Carr

Kirk Minihane, future radio hall of famer, sits down with current radio hall of famer Howie Carr. Kirk and Howie talk about Howie's latest book Kennedy Babylon. If you like famous people engaging in sex scandals, hard drug taking, and murder this is the podcast for you. Its a fascinating look at Boston's most famous family and the problems that took the family down.

More from this show

K&C - Mut takes his shirt…

K&C - Mut takes his shirt off, K&C can’t go to DC; Dino offered his house at a great discount 3-24-17

Hour 1. Gerry tells Kirk that the trip to the White House may not happen for them. Mut takes his shirt off to prove how well the gym has worked. The guys read an old email from Dino.

More from this show

K&C - 24 hours with Adam …

K&C - 24 hours with Adam Schefter; Headlines with Kirk; Mut’s workout notebook 3-24-17

Hour 2. Headlines with Kirk. Kirk and Gerry give Mut a hard time for his workout notebook.

More from this show

Ep. 56: Howie Carr

Ep. 56: Howie Carr

Kirk Minihane, future radio hall of famer, sits down with current radio hall of famer Howie Carr. Kirk and Howie talk about Howie's latest book Kennedy Babylon. If you like famous people engaging in sex scandals, hard drug taking, and murder this is the podcast for you. Its a fascinating look at Boston's most famous family and the problems that took the family down.

More from this show

K&C - Bradford’s play-b…

K&C - Bradford’s play-by-play of the tornado; Riley Dennis is sick of cis sexism 3-24-17

Hour 4. Rob Bradford had some great insight into the tornado at last night’s Red Sox game. The guys don’t understand what Riley Dennis is trying to argue for.

More from this show

News & Analysis