Near the competitive balance tax threshold, the Washington Nationals have new issues as they approach the trade deadline. What does it mean?
The Washington Nationals are wanting to upgrade before the trade deadline. Their shopping list includes at least one bullpen piece if not more. Throw in another potential starting pitcher for good measure and added bench depth.
Small problem with that want list though. As shown here by Cot’s Baseball Contracts—with a healthy hat tip to Ken Rosenthal of Fox Sports—the Nats are $2.4 million under the new competitive balance tax. That is like you taking the girlfriend out for dinner and can only afford Burger King if you split the fries.
What we used to call the luxury tax does not go by what a team spends in a year. Instead, it takes the average annual value of a contract and uses that number. Max Scherzer, for example, will make roughly $22.2 million in 2017. But, his salary jumps to nearly $38 million in 2019.
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The AAV does not look at year-by-year numbers. It considers Scherzer’s salary at $28,689,376 this year and every season through the end of his contract in 2021. A difference of $6.4 million in 2017 the wrong way. In 2019, the savings difference is nearly $10 million the other way.
If the Nats go over what amounts to a soft salary cap, they would pay a 20% tax for the total salary over $195 million. Or every million they break the barrier, it is additional $200,000 on top.
A team known for high spending and penny pinching—an oxymoronic ideal for sure—the Lerner family does not want to go there. With their television deal, it is not clear if the Nats would turn a profit if they bust through.
This leads to a harder process than figuring what prospects to ship away. There is a great chance any trade partner will not want any Major League Baseball salary in return for any deal. Unless the Nats can score someone who makes big money, they will be responsible for all money and the AAV of the contract.
Yep, it gets messy quick.
With the way the offense scores runs and how well Scherzer and Stephen Strasburg dominate games, the Lerner family might go full steam ahead and take the risk. A $200 million AAV this year costs an extra million at $201. Money that can be recouped with extra playoff revenue.
But, it is a gamble and against what the Nats have done before. As you see all the rumors over the next 40 days fly by, keep the $195 million in the back of your mind. Whether we like it or not, it will be the deciding factor where Washington goes from here.