Astros' owner says Houston might 'make a run at' re-signing Gerrit Cole, but there's a catch that makes it unlikely
The Astros would like to retain Cole, yet there's almost no way they can do so while remaining under the luxury tax
The Houston Astros won't know who they're playing in the American League Divisional Series until after Wednesday night's AL Wild Card Game between the Tampa Bay Rays and Oakland Athletics. Still, that didn't stop Astros owner Jim Crane from looking into the future -- as in, to the winter -- on Monday by addressing right-handed starter Gerrit Cole's impending free agency.
Crane even went so far as to concede the Astros might "make a run" at retaining Cole. Here's more, courtesy of Chandler Rome of the Houston Chronicle:
"We'll see where we end up after the year. We may make a run at it. We're not sure yet," Crane said. "We're going to wait and see what else unfolds and who else is going to stay on the team.
Now, before Astros fans rush out to buy Cole shirseys, it's worth noting that Crane's proclamation came with a caveat: that he'd prefer to remain under the luxury tax threshold -- or, to be straightforward, he'd prefer to avoid paying overage penalties.
Preferences can change like the wind direction, but if this one remains steady then the Astros are highly unlikely to retain Cole beyond this season.
For those who are unfamiliar with the luxury tax, it isn't calculated the same as traditional payroll. Rather than relying on a player's yearly salary, it hinges on the player's average annual value. In other words, a player can make $30 million over three years and -- regardless of the breakdown -- count for $10 million annually for luxury tax purposes.
The penalties for exceeding the figure -- and it'll sit at $208 million for next season -- are trifling in nature: a 20 percent tax for first-time offenders, 30 percent for second-time offenders, and 50 percent for third-time-plus. Exceed by more than $20 million and there are additional surcharges, and go over by at least $40 million and draft picks start dropping.
The Boston Red Sox exceeded the tax line by more than $40 million last season and had to pay less than $12 million in fees. Again, it's a trifling amount in an industry where total revenue exceeded $10 billion last year. The tax is little more than a convoluted bogeyman owners have installed to serve as an unofficial salary cap.
With that in mind, let's turn back to the Astros' situation.
True to Crane's desire, the Astros have stayed under the luxury-tax number. This season, their luxury tax payroll is $197 million -- or about $8 million below the threshold -- and their projected figure in 2020 is around $163 million. The catch is that projection doesn't include arbitration values for George Springer, Roberto Osuna, or Carlos Correa. Even if those three received no raise -- and they will receive raises -- they'd account for another $23 million, bringing them closer to $190 million -- and that's without making a single external addition to the roster.
What all this means is that the Astros are in an interesting position entering the winter. If they abide by Crane's predilection, they would have to dump salary to make the numbers work. Say the Astros shipped out Reddick ($13 million) and -- in a surprise -- sent Yuli Gurriel ($9.5 million), Correa ($5 million-plus) and Lance McCullers Jr. ($4 million plus) out as well. That would free up at least $31 million in luxury-tax payroll.
If Cole receives just -- just -- Patrick Corbin's deal from last winter, then his luxury tax number would be $23 million. It stands to reason Cole will get more than Corbin did, and that the Astros would want to make additions at catcher and perhaps elsewhere in the rotation and bullpen.
The takeaway here is this: The Astros are going to be flirting with the luxury-tax line even without Cole in the mix. Barring an unexpected and radical slew of winter moves, there's no chance the Astros can keep Cole and avoid the luxury tax. As such, if Houston's interest in re-signing Cole is truly predicated on avoiding overage fees, then go ahead and rule them out.
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