UPDATE: This article was changed after Ken Rosenthal updating his reporting to note that Vladimir Guerrero's Jr. signing bonus wouldn't count towards Toronto's 2025 luxury tax payroll.
There's no denying the Blue Jays have been one of the busiest teams in MLB this offseason. They missed out on Juan Soto. They were in on Roki Sasaki before he signed with the Dodgers. They signed Anthony Santander, Max Scherzer and Jeff Hoffman and traded for Andrés Giménez. And if that wasn't enough, they've been connected to both Pete Alonso and Alex Bregman, the top-two free agents remaining on the market.
But, according to some new reporting from MLB Insider Ken Rosenthal, the luxury tax could end up being a factor in their pursuit of either free agent.
How the luxury tax could impact the rest of the Blue Jays' offseason
Initially it seemed as if the luxury tax could have a huge impact on the rest of the Jays' offseason, as Rosenthal initially reported that the signing bonus from a potential Vladimir Guerrero Jr. extension would count toward the Blue Jays' luxury tax this season.
But Rosenthal clarified in an update that any potential signing bonus wouldn't count toward this year's luxury tax, meaning that Toronto would have plenty of wiggle room to go after Alonso or Bregman and sign Guerrero to an extension.
Rosenthal pointed out that when the Red Sox signed Rafael Devers to contract extension in January 2023, the portion of his signing bonus that was due in 2023 was factored into future years, which is what Toronto could do here.
The Blue Jays' current luxury tax payroll stands at $273.3 million according to FanGraphs. If they went over the $301 million plateau, they'd have the luxury tax. The Blue Jays would be a first-time offender, which means they'd have to pay 80% for each dollar they spent over $301 million.
While there's still a chance the Blue Jays could go over the luxury tax if they signed Alonso or Bregman (it seems like an Alonso contract would start at around $90 million — the amount that the Jays signed Santander for — while Bregman is reportedly sitting on a $200 million offer), it shouldn't stop them from signing Guerrero to an extension.
The same can be said for their free agent pursuits. They've already added Santander, Scherzer, Hoffman and Giménez, so the rest of their big offseason moves have been made.
It stands to reason that the signing of Alonso or Bregman would be their last move of the winter, so they wouldn't have to worry about going over the luxury tax with subsequent moves.
In Rosenthal's story, he had Guerrero getting a 14-year, $500 million extension with a $50 million bonus, which is the ballpark of what we've suggested based off other reporting.
While that contract would obviously limit the amount of spending they'd be able to do in the future, they have Bo Bichette and Chris Bassitt coming off the payroll after 2025 and George Springer coming off in 2026.
But, as Rosenthal writes, these are first-world problems. Toronto has a strong core and made moves this offseason, even if it comes with the sting of being so close to signing Soto and Sasaki.