The Boston Red Sox didn’t just sign Alex Bregman—they played chess while everyone else played checkers. His $120 million, 3-year deal isn’t a financial gut punch, thanks to a savvy $20 million per year deferral. The result? Bregman secures the bag, the Red Sox ease their payroll strain, and Boston stays flexible for future moves. But this isn’t just a clever accounting trick—it’s a glimpse into the evolving economics of baseball. Could this be the new standard for locking down superstar talent? The Sox might have just rewritten the playbook.
Deferred contracts have become a financial tool for teams to stay competitive without overspending in a short period. Boston is now adopting a path taken by teams like the Dodgers as well as the Mets, focusing on financial maneuverability. However, does such an approach truly benefit the team in the long run?
Red Sox’s decision to defer a part of Alex Bregman’s salary enables them to manage payroll more effectively. By spreading payments over a period, Boston can decrease the present-day value of the deal to almost $90 million over 3 years. This approach helps to ignore exceeding luxury tax thresholds while safeguarding flexibility for future acquisitions. Such an approach mirrors what the Dodgers did with Shohei Ohtani, deferring $680 million of his $700 million contract. “Deferred contracts enable teams to remain competitive while managing financial obligations“, highlighted by The Athletic. By adopting such a method, the Red Sox can manage a powerful roster while limiting financial strain.
Alex Bregman will have $20 million of his $40 million annual salary deferred each year.
— Bob Nightengale (@BNightengale) February 15, 2025
The Boston Red Sox also benefit from the long-period financial implications. Unlike fully ensured present-day salaries, deferred money helps to manage payroll spikes. The Nationals structured Max Scherzer’s 210 million US dollars deal with $105 million deferred, ensuring payments until 2028. In addition, the Mets deferred 50 million US dollars of Francisco Lindor’s $341 million contract to manage payroll flexibility. If managed effectively, the Red Sox can ignore hefty luxury tax penalties and free up resources for midseason signings. It will help the team to manage room for future big-name signings.
The enhancing trend of deferred contracts in MLB
Deferred contracts are becoming more basic across MLB. The Dodgers have embraced this approach aggressively, with almost $1 billion in deferred salary commitments over the last five years. The Mets, guided by Steve Cohen, have also analyzed this way as a way to sustain long-period competitiveness while keeping payrolls flexible. For the Red Sox, this highlights a transformation in financial approach. The team had historically ignored large-scale salary deferrals, preferring old high-salary contracts. However, as MLB managers need alternative financial approaches amid transforming revenue dynamics, the team’s decision to join this trend highlights a long-period transformation. If it pays off, other teams could adopt the suit.
The vital issue remains: does deferring Alex Bregman’s salary make the Red Sox powerful in the short period? If the team can utilize this financial flexibility to add more talent, the move could be a win. However, if such obligations pile up over a period, it could hinder the Red Sox’s future spending, similar to what happened to the Baltimore Orioles with Chris Davis. Baltimore deferred a vital portion of Davis’s $161 million contract as well as years after his retirement; he is still making yearly payments, limiting their payroll flexibility
The Red Sox’s decision to defer a vital portion of Alex Bregman’s contract places them among the enhancing list of MLB teams utilizing this financial approach. While it provides short-term benefits, only time will tell if it proves sustainable. What do you think? Will such a move help the Red Sox to stay competitive? Or could it backfire in the long run?
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