Luxury Tax Could Hamstring Tigers At Deadline, Seal J.D.'s Fate
By: Will Burchfield
@burchie_kid
Never has the trade deadline been more significant for the Tigers. An era hangs in the balance.
Either the organization will initiate a substantial rebuild or double down on its aging core.
How the team proceeds is entirely up to the players.
But even if the Tigers thrust themselves into contention in the coming months, GM Al Avila might not be inclined to acquire reinforcements.
"It's not as easy as saying you're buyers or sellers because, really, you gotta understand one thing. Where our payroll is at for the competitive balance tax right now, this season we're going to be second-time offenders. Certainly you don't wanna be a three-time offender because the consequences are really crippling to a ball club, so that's also a factor that you have to add in to being a buyer," Avila told the Jamie and Stoney Show on 97.1 The Ticket.
MLB's competitive balance tax, commonly known as the luxury tax, assesses heavy penalties against teams that exceed a predetermined payroll threshold three seasons in a row. The Tigers, who exceeded the threshold in 2016 and are set to do so again in 2017, would face a 50 percent tax on all overages if they exceed the $197 million threshold in 2018.
The team's current payroll is just above $200 million. If it exceeds the 2018 threshold by $40 million or more, the Tigers, on top of incurring a massive luxury tax, would have their highest pick in that year's entry draft moved back 10 places (unless the picks falls in the top six, in which case their second-highest pick would be moved back 10 places.)
"How do you maneuver around those situations?" Avila said.
In short, the Tigers really can't afford to take on more payroll. So if the trade deadline arrives and the team appears, say, a starting pitcher away from serious contention, don't expect Avila to plug that hole at the cost of the bottom line. These are new times.
[RELATED: Wary Of Trade Deadline, Tigers Emphasizing Today]
The luxury tax threatens to handcuff the Tigers in free agency too. They certainly won't be in position to acquire any stars, but will they be able to retain their own? In regard to J.D. Martinez, probably not.
The slugging right fielder is due a substantial raise on his $11.75 million salary, somewhere in the realm of $20 to $25 million per year. That sounds like a prohibitive cost for the now frugal-minded Tigers. Sure, they'll receive some financial relief with the (likely) departure of Francisco Rodriguez and the (likely) buyout of Anibal Sanchez, but those savings will be partly negated by raises dolled out to the team's arbitration-eligible players.
Unless Martinez agrees to a serious hometown discount, it's hard to imagine the Tigers fitting him into their budget next year and beyond.
Which brings us back to the trade deadline. Does Martinez stay or go? The Tigers' position in the standings will help clarify things, but even then Avila will have to weigh a number of factors in determining whether or not to stick with (and possibly augment) the team at hand.
"You've gotta be in a position where you feel your team is healthy enough or is going to be healthy enough for the rest of the season," he said. "Are at least three or maybe four of your pitchers really pitching well? Is your bullpen coming in and shutting guys down? Is your hitting good enough to win some ballgames?
"If your team is playing very well and you're relatively healthy or you're going to be healthy soon, those are factors that you weigh getting to the trade deadline. And at that point you have to make those tough decisions. But you have to feel good about it going forward. If that's not the case, you turn the corner."
The Tigers will have to turn that corner eventually. Their bloated payroll, and the penalties inherent within, may force them to do so sooner than they might like.
