Understanding the Betts Trade

Two days ago, the biggest trade of the offseason took place, sending shockwaves across Red Sox nation. Instead of automatically thinking the Red Sox lost the trade and made a terrible mistake, why don’t we dig a little deeper and try to understand why the trade took place.

Trade Components

• Dodgers Receive: Mookie Betts, David Price, Money from Red Sox (to cover part of Price’s salary)
• Red Sox Receive: Alex Verdugo, Brusdar Graterol
• Twins Receive: Kenta Maeda

Why Mookie Betts was Available to be Traded

Free Agency at End of Season

At the end of the 2020 season, Mookie Betts will be a free agent. At the end of last season, the Red Sox offered Mookie Betts $300 million over 10 years (average $30 million/ year) to stay with them. According to Lou Merloni of WEEI, Betts countered with around $420 million over 12 years (average $35 million/year). That is a massive difference. It’s easy to just say that the Red Sox could afford it, so they should’ve extended that contract to him. But really think about whether you would want the Red Sox to be paying $35 million a year to Betts in 7 years from now (he is currently 27), let alone 12 years from now (For reference, Betts at free agency will be older than Harper and Stanton when they signed their blockbuster deals).

While Betts certainly deserves a massive contract with long term stability, there are other factors at play for the Red Sox here too.

Does Betts Even Want to Play in Boston?

There are rumors that Mookie Betts doesn’t want to play in Boston anymore. I don’t know how true this is, but if it is true at all, then the Red Sox absolutely needed to capitalize on his trade value to start rebuilding their farm system, but more on that later.

I’m thinking Betts is just looking to see how much money and how long of a contract he is offered in free agency, nothing personal against Boston.

Luxury Tax

Just in case you don’t know, the luxury tax is a penalty that teams must pay if they are over the salary cap, which last year was $206 million ($208 million for 2020). For every consecutive year a team is over the cap, the penalties get harsher, let’s take a look:

If an organization is $40 million or more above the cap, they will have their highest pick in the Rule 4 Draft moved back 10 places. The only exception to this is if they have a top 6 pick, in that case the team’s second highest selection will be moved back 10 places.

While the Red Sox certainly have enough money to cover fines associated with the tax, they absolutely cannot afford to lose any high round draft picks. This means that while it may be alright (though not ideal) for them to breach the cap, they definitely need to avoid spending $40 million over the tax.

Let’s look at the Red Sox recent history with the luxury tax. In 2019 the luxury tax cap was $206 million. The Sox payroll was $236 million, surpassing the luxury tax by about $30 million. They also were above the cap in 2018, meaning they would have to pay a 50% tax on the amount over the cap this season.

This year the Red Sox would’ve owed Mookie Betts $27 million. And then if they signed him to a big multi-year deal, he would’ve been owed somewhere between $30-35 million/year for every year after.

Let’s use $30 million/year to be conservative. If the salary cap this year is $208 million, then paying one player $30 million makes up approximately 15% of the maximum team payroll. If the Red Sox want to keep multiple other talented players and sign free agents while staying under the luxury tax threshold, they need to limit large portions of their payroll all going to one player.

Breaching the luxury tax threshold year after year limits the Red Sox from signing other free agents, extending larger contracts to other talented players, etc. And right now, that’s all the Red Sox can really do to grow and maintain their team, considering that their farm is one of the worst in the league.

The Desperate Need to Rebuild the Farm System

The Red Sox desperately need to start rebuilding their farm system, as they have one of the worst farms in MLB. When teams have more home grown talent, they have control over their salary for the first few years of their career, providing a team greater flexibility in signing free agents.

While the Red Sox have a lot of talented players in their farm system, they have only 1 player (now 2, with Graterol) in the top 100 Prospects and are considered one of the worst farm systems in baseball.

When a team has a lower ranked farm system, it is much harder for them to have trade pieces throughout the year.

If the Red Sox want long term success, they need to start bringing in more talent to their farm, whether it’s by draft or by trade.

Red Sox fans are so used to this spend now strategy that has kept them afloat and competitive for recent years. Though it may take some time, fans will see that long term sustainable success is more desirable and will yield better results for the organization as a whole. It’ll give the Red Sox more flexibility in trades and provide a clearer understanding of what the organization expects and needs in the future.

Potential Punishment from MLB

This need to rebuild their farm is increasingly urgent, especially since the Red Sox are waiting to hear their punishment from MLB for using cameras in the replay room to steal signs during the 2018 season. Part of the Astros’ penalty for sign stealing was loss of their first two round draft picks for the next two years. If the Red Sox receive a similar penalty, it will be significantly harder for them to build a stronger farm. Meaning, they will need to find other means of obtaining young players under team control.

Here’s where trades come into play. The Red Sox had one of the best players in baseball, who is going to be a free agent at the end of the 2020 season. If they can’t draft, they can certainly trade, and a deal with Mookie Betts could provide them the young, controllable players they need to be successful over the next few years.

Who the Red Sox Got in the Trade

The Red Sox received Alex Verdugo and Brusdar Graterol. Both players are very talented, and have potential to be high impact for the Red Sox over the next 5 or so years. They are both under team control until at least 2025.

Verdugo hits the ball hard and far, has great launch angle, and can be an offensive weapon if he stays consistent.

Graterol has elite pitches, with his two seam fastball averaging close to 100 and his slider at 89 mph.

Did the Red Sox get the best return for Betts and Price that they could’ve? Maybe not, especially when considering all the speculation regarding whether Graterol’s medicals are holding up the trade from being confirmed by all three clubs.

It is tough to judge whether this was a fair trade because there are so many components. I believe it was in the best interest of the Red Sox to make this trade because:

• They now have greater salary flexibility
• They obtained two talented players under team control, initiating their movement towards longer term success team building strategy
• Betts was going to be a free agent at the end of this season anyway and was probably not going to resign with the Sox
• With MLB’s penalty looming and the potential of not getting first round draft picks, the Red Sox need to start obtaining more players and prospects under team control

Only time will tell how this trade ends up. I know a lot of Red Sox fans are upset now (understandably), but just give them a chance and see how it goes.

What do you think of this trade?