The Los Angeles Angels played roulette with the luxury tax threshold and lost. On August 29, they placed six players on waivers in an attempt to get under the $233 million limit. Five of those players were claimed by other teams, but outfielder Randal Grichuk was not, leaving them short of their payroll-slashing goal according to Jeff Fletcher of the Orange County Register.
When players go through waivers, any of the other 29 teams have the opportunity to claim them, with the highest priority going to the worst clubs by win-loss record. The Cleveland Guardians claimed starting pitcher Lucas Giolito as well as relievers Reynaldo López and Matt Moore, the Cincinnati Reds took on outfielder Hunter Renfroe, and the Seattle Mariners picked up reliever Dominic Leone. Giolito, Grichuk Leone, and López were just acquired by the Angels a few weeks prior at the trade deadline.
The timing of the Angels’ waiver-wire gambit was intentional. Any player in a team’s organization prior to September 1 is playoff-eligible. At 64-71, they’re out of contention, but the desirability of their players by other organizations would evaporate after the beginning of September.
When a team claims a player on waivers, they take on 100% of his remaining salary. Had all six players been claimed, the Angels would’ve shed just enough to get under the tax threshold. Grichuk’s full-season salary is $10.3 million this year. The Angels owe him about $1.7 million through the rest of the season. Apparently, that was the margin of difference.
The Angels face a negligible financial penalty for remaining over the tax threshold. They must pay a 20% tax on every dollar above the $233 million limit, which shouldn’t be more than a few thousand dollars. As general manager Perry Minasian told Fletcher, it won’t affect the club’s offseason budget.
The reason they tried so desperately to get under the cap was draft pick compensation. Teams can tag certain upcoming free agents, such as Shohei Ohtani, with a qualifying offer—a one-year deal equal to the average of the highest 125 salaries in MLB, or a little over $20 million. If the player declines the offer and signs elsewhere, the original team gets an extra pick in the following amateur draft. The value of that pick is predicated on their luxury tax status. If the Angels had gotten under the cap, the pick would’ve been after the second round. Since they failed to do so, it will be after the fourth round.
To say the least, it’s a questionable series of roster-building moves when taken in aggregate. They gave up considerable prospects to acquire Giolito, Grichuk, Leone, and López a few weeks ago. Now they attempted to jettison them all (three of them successfully) simply to move up a few rounds for a potential draft pick.
The Angels were 56-51 on July 31, but have gone 8-20 since then. Regardless of their record, it’s a drastic maneuver for such small payoff, and surely erodes goodwill with fans.
Worst of all, it’s a signal that the organization has essentially given up on re-signing Ohtani. The two-way superstar is the unquestioned best player in the sport, though he might not be able to pitch next year due to an elbow injury. These waiver moves only make a difference if he declines the qualifying offer—which is inevitable—and joins another team. In six season of having him and Mike Trout on the same roster, the Angels will have failed to reach the playoffs even once.
Potential Rule Changes
The Angels weren’t the only club to pass veterans through waivers at the end of August, though no one else waived as many players or made such a naked attempt to stave off luxury tax penalties. The New York Yankees waived outfielder Harrison Bader (claimed by the Cincinnati Reds), the New York Mets waived pitcher Carlos Carrasco (unclaimed), and the Chicago White Sox waived pitcher Mike Clevinger (unclaimed).
When teams throw away players—especially upcoming free agents—just because they’re out of contention, it gives postseason hopefuls an advantage over their rivals by claiming them. The trade deadline’s function is to prevent good players from changing uniforms too close to the playoffs, which was subverted by the actions of the Angels and other franchises.
This offseason, MLB could consider rule changes to close this loophole. Depending on the proposed ideas, the MLB Players Association could be involved as well. These conversations may or may not bear fruit, but the league has to be concerned about the integrity of the postseason if teams can pick up players cast off by other clubs so close to September and October.