Rangers supporters have been holding out hope for a reunion with left-handed pitcher Jordan Montgomery, but general manager Chris Young poured cold water on that possibility Wednesday, informing the team’s beat reporters that any significant acquisitions are unlikely at this stage. Young acknowledged that while the Rangers will keep an open mind when it comes to free agents, the long-term uncertainty surrounding the team’s television contract has had a real impact on their spending this offseason, even after winning the World Series.
The lack of high-profile signings has left some fans frustrated, as they have become accustomed to the team making big splashes in free agency in recent years. Just two offseasons ago, the Rangers made headlines by spending over $500 million to sign Corey Seager, Marcus Semien, and Jon Gray. Last winter, they focused on bolstering their pitching staff by signing Jacob deGrom, Nathan Eovaldi, and Andrew Heaney for a combined $234 million. They also made waves at last year’s trade deadline by acquiring Montgomery and future Hall of Famer Max Scherzer. However, Montgomery is currently a free agent and remains unsigned, while Scherzer will be out of action until June or July due to back surgery.
As it stands, Roster Resource projects the Rangers to have a franchise-record payroll of $220 million, which would result in $243 million in luxury tax obligations. This would make them a luxury tax payer for the second consecutive season. Last year, they paid just $1.8 million in luxury fees, but as a second-time payer, they will face steeper penalties if they exceed this year’s $237 million threshold.
Currently, the Rangers are sitting about $6 million over the first barrier, which means they will only be responsible for a 30% overage fee. If no further deals are made, they will pay approximately the same $1.8 million penalty. However, it is likely that this figure will increase due to small-scale signings, late trade acquisitions, or in-season pickups near the trade deadline.
The main point of contention among fans is the apparent unwillingness to meet Montgomery’s asking price in free agency. While it is unclear what that asking price currently is, it is reasonable to assume that Montgomery and his representatives at the Boras Corporation are seeking a nine-figure contract with an annual salary ranging from $20-25 million.
As second-time luxury tax payers, the Rangers would be on the hook for much more than that. They would owe a 30% tax on the next $14 million of average annual value (AAV) added to their payroll, and an additional 42.5% on subsequent spending. If we speculate that Montgomery’s AAV is $23 million, the Rangers would have to pay an extra $8.025 million in taxes on top of his salary. While Texas could try to backload the deal or defer salary, it would not change the luxury tax implications. Depending on the exact AAV of Montgomery’s contract, the Rangers could be looking at an additional cost of $7-9 million.
Signing Montgomery would also increase the likelihood of the Rangers becoming third-time luxury tax payers in 2025. If they were to sign Montgomery, their luxury obligations in ’25 would likely exceed $170 million, and that’s before factoring in arbitration raises for several players. This would put them over $200 million in tax considerations before making any additions to the 2025 roster. Long-term deals for core players would only further increase the luxury tax burden.
It is debatable how much the Rangers’ ownership should be concerned about the luxury tax. The team is still benefiting from the revenue boost provided by their new stadium, and last year’s World Series win also brought in additional revenue. The team does not need to worry about sacrificing draft value unless they exceed the $40 million threshold, which would result in a drop in their top draft pick by 10 places. Even if they were to re-sign Montgomery, it is unlikely they would reach that level. However, every ownership group has its limits, and it appears that the Rangers’ group has either reached or is approaching their limits for the upcoming season. If that is the case, the team will rely on a patchwork starting rotation in the first half of the season, with hopes of reinforcements returning after the All-Star break.
Currently, the Rangers’ rotation is projected to include Eovaldi, Gray, Heaney, Dunning, and Bradford. Rodriguez, Ureña, and Sampson could also be in the mix. The team could sign notable arms to low-cost one-year deals and continue adding veterans on non-roster contracts. The development of former top prospects Leiter, White, and Winn will also be crucial this year, as they look to bounce back from disappointing seasons in the upper minors in 2023.
According to the Source mlbtraderumors.com