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Red Sox Spend to Contend

Pitchers Matsuzaka and Okajima Celebrate With The Trophy (Reuters)

Since John Henry, Tom Warner, and Larry Lucchino came to own and control the Boston Red Sox, the team has lived within a budget. Granted, this budget has allowed the team to maintain a higher payroll than most teams, and has at times allowed the team to spend enough to outspend all but one franchise: the New York Yankees.

As one of the most popular and most powerful “big market” teams in the league, the Red Sox have not been afraid to spend when they believe the investment is truly going to improve the team, even if that means paying the luxury tax. One sign of that: both World Series championships were won with record-setting payrolls for the Sox, and 2010 may once again set their budget at the high-water mark.

Year 2003 2004 2005 2006 2007 2008 2009
Luxury Tax $117 $120.5 $128 $136.5 $148 $155 $162
Top Payroll* $152 $184 $208 $194 $189 $209 $201
Sox Payroll $99 $127 $123 $120 $143 $133 $121
Sox Payroll Rank 6th 2nd 2nd 2nd 2nd 4th 4th

*Not surprisingly, the top payroll was the New York Yankees every year

All About the [Curt] Schillings

As the shock from the 2003 ALCS was fading away, Theo Epstein & Company were planning for a bigger and better year for 2004.  The Red Sox had scored 961 runs in 2003 with an offense of historic power but a pitching staff that was underpowered and overmatched when big games were on the line. It turned out that Red Sox fans would be more thankful about the events of Thanksgiving 2003 than they would ever have expected. With Lucchino, Epstein went to the house of Curtis Montague Schilling and negotiated a trade for the Diamandbacks’ ace, including an extension for the 37-year-old righty. Including his $12 million salary for the upcoming 2004 season, the Red Sox were prepared to pay at least $37.5 million to a pitcher on the wrong side 35, plus an option for 2007. Together with top free agent closer Keith Foulke, Schilling lead the soaring Red Sox payroll over the $100 million mark to an all-time team-high.

Start of a Renter-error

We all know what happened in the 2004 offseason; Pedro Martinez and Derek Lowe ventured off to the National League; Matt Clement and David Wells brought a large goatee and a larger body to Boston; and Edgar Renteria would open what is still a revolving door of free agent shortstops. However, with all the shakeups, the Red Sox payroll went down a few million from their high the previous year. Though it had some problems, the 2005 squad was still quite formidable.

Coco Crispies Are a Good Cereal

Many people, myself included, thought Coco Crisp was the answer in center field. It turned out to be a less successful move than Crisp’s prior years would have suggested.

CLE 2004 .297/.344/.446/.790
CLE 2005 .300/.345/.465/.810
BOS 2006 .264/.317/.385/.702
BOS 2007 .268/.330/.382/.712
BOS 2008 .283/.344/.407/.751

In a related move to acquire Crisp, the Red Sox bid farewell to Edgar Renteria, sending $8 million dollars of the $26 million remaining on his contract to the Atlanta Braves.

In a blockbuster trade, Hanley Ramirez was sent to the Florida Marlins for Josh Beckett and Mike Lowell. While Lowell was taken on as an albatross of sorts, Beckett was a young ace who the Red Sox would quickly sign to a very team-friendly extension: three years for $30 million with a fourth year, 2010, for just $12 million.

Scott Boras’ Spheres of Influence

Much like how Commodore Matthew Perry opened the ports of Japan for trade with the West, Scott Boras opened Japan to Red Sox Nation in the 2006 offseason.  Boras represented highly sought after pitcher Daisuke Matsuzaka in his quest to play in America. Using the blind bid post system, the Red Sox paid $51.1 million to the Seibu Lions for the rights to speak with Matsuzaka. The Sox signed the Japanese Ace to a six-year, $52 million deal. Hideki Okajima was also signed out of Japan that year and before the 2009 season, the Red Sox lured Junichi Tazawa away from Japan’s amateur draft, in part because of his view of the Red Sox organization since the Matsuzaka signing. When you also take into account the MLB opening series the Red Sox played in Japan against the Oakland A’s in 2008, for $100 million, the Boston Red Sox seem to have carved out a presence in Japan.

Scott Boras was not done with the Red Sox yet though, and found homes for two of his free agents with the team: the rare five-year J.D. Drew deal and an additional four-year pact for Julio Lugo. The Red Sox would later send Lugo to the Cardinals, absorbing his remaining salary for 2009 and 2010, at $13.5 million. For their trouble, the Red Sox received Chris Duncan, son of Cardinals pitching coach Dave Duncan, who would be released shortly after joining the organization.

Things Are Bigger In Teix-as

The World Series Champions in 2007 made few major acquisitions.  Curt Schilling was paid $8 million to take off all of the 2008 season and Mike Lowell was re-signed to a three-year pact, again becoming an albatross contract, though he has been more productive than when the Marlins were looking to shed money. And of course, the Red Sox were willing to break the bank for Mark Teixeira before he signed with the Yankees.

What the Red Sox did accomplish was locking up Dustin Pedroia (six years, $40.5 million), Kevin Youkilis (four years, $41 million) and Jon Lester (five years, $30 million) to rather team-friendly deals. Fifteen seasons of players for just $111 million. Not bad when you consider Teixeira for eight seasons would cost closer to $200 million.

Never Say Never Again

While the Red Sox were willing to crack open the piggy bank prior to each of their previous World Series victories, there is a subtle difference this time around. Alex Speier estimates the Red Sox payroll at $138 million as currently constructed, plus another $18 million in dead money used to pay Lugo and Lowell to play elsewhere (assuming Lowell is eventually dealt). Combined with the rest of the 40-man roster and expenses, the Red Sox working payroll for 2010 stands somewhere around $168 million. This is the figure looked at for the luxury tax, which will be set at $170 million for 2010. In 2007, the luxury tax threshold was $148 million and the Red Sox spent $163.1 million in payroll for the 40-man roster.

Though the Lowell trade fell through upon news of his pending thumb surgery, Ken Rosenthal believes that the situation is no different than with Lugo – the Red Sox have decided he is no longer part of their plans. With the money owed to Lowell and Lugo sunk costs and coming off the books at the end of the season, the Red Sox could add another impact player this year and fall back under the luxury tax next year when the contracts to Lugo, Lowell, Ortiz, Beckett, and Victor Martinez expire. The Red Sox have budgeted carefully under Theo Epstein even with the wealth of John Henry, but they have shown when they feel that extra money will have a big impact, they don’t worry about the short-term penalty. This year, they brought John Lackey and Mike Cameron into the fold and may not be done yet.

About Mike Carlucci

Mike Carlucci writes about the Red Sox for Sports of Boston and can be found blogging about baseball and technology. He has a J.D and enjoys palindromes and espresso. You can follow him on Twitter @mikecarlucci or on Google+.

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