The Angels’ plan to cut payroll and avoid the luxury tax in this disappointing season appears to have worked.
Five of the six veterans the Angels put on waivers were claimed, knocking more than $5 million off their 2023 payroll. Although the luxury tax calculations are not official until December, the Angels are now below the $233 million threshold, according to FanGraphs.
Pitchers Lucas Giolito, Matt Moore and Reynaldo López were claimed by the Cleveland Guardians, who play next weekend in Anaheim. Right-hander Dominic Leone was claimed by the Seattle Mariners. Outfielder Hunter Renfroe was claimed by the Cincinnati Reds. Outfielder Randal Grichuk went unclaimed, so he will remain with the Angels.
The Angels are off Thursday, so they will have until Friday to call up roster replacements before their game in Oakland. They announced on Thursday that right-hander José Marte has been recalled to take one of the spots.
Although there would have been modest tax implications for the Angels to exceed the luxury tax in 2023, the rate would have gone up from 20% to 30% if they exceeded the threshold for a second straight year in 2024. Now they can pay just the 20% tax if they go over next season. The tax is 50% for the third consecutive season over the threshold.
If the Angels lose Shohei Ohtani as a free agent after making him a qualifying offer, they would receive a compensation pick after the second round if they are under the luxury tax threshold. It would have been after the fourth round if they were over the threshold.
The Angels’ decision to place so many players on waivers sent shock waves throughout the industry, leading to speculation that Major League Baseball might change the rule that allowed the Angels to do so.
The Angels, however, found themselves in an unusual circumstance that made this move logical. Most teams out of the pennant race simply trade players in July to cut costs, but the Angels were in the race when they acquired players before the Aug. 1 trade deadline. It was only after the team went into a tailspin in August that they fell out of the race.
The Angels also have an unusually large number of impending free agents with reasonable contracts, making it more probable a contender would be likely to take on their salaries.