Categories: Analysis

How much room do the Phillies have below the luxury tax threshold?

J.T. Realmuto won his first Gold Glove Award in 2019. (Kyle Ross/Icon Sportswire)

While the Philadelphia Phillies appear to be finished making any big roster moves before the 2020 season, they still have minor roster holes to be filled. With many cheap free agents still available, it is important to see how much the team is left with in room before exceeding the luxury tax, especially considering ownership’s seeming unwillingness to enter the tax threshold currently.

Here is how the Phillies payroll breaks down less than three months remaining before Opening Day:

Arbitration

The Phillies were able to avoid arbitration with a majority of eligible players for this season. However, there were two players who the team was unable to settle with. Here is how these arbitration hearings can impact the team’s remaining space under the luxury tax.

J.T. Realmuto – Player filed $12.4 million, team filed $10 million (per Jim Salisbury of NBC Sports Philadelphia)

The Phillies are undoubtedly going to try to sign Realmuto to an extension at some point, but it appears more likely to come after this arbitration hearing to keep the team under the tax in 2020. This is Realmuto’s final year of arbitration, and if he and the team are unable to agree on an extension sometime this season, he will become a free agent in 2020.

Hector Neris – Player filed $5.2 million, team filed $4.25 million (per Jim Salisbury of NBC Sports Philadelphia)

Neris had the best season of his career in 2019, and currently slots in as the closer on the roster. He has one more year of arbitration remaining before becoming a free agent following the 2021 season.

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Guaranteed contracts

The Phillies have 15 guaranteed contracts in 2020 that total $164.7 million. They are as follows:

Pitching

Jose Alvarez – $2.95 million

The left-hander was acquired in a 1-for-1 swap that sent Luis Garcia to the Angels last offseason, and he was one of the only reliable relievers on the team in 2019. He is set to be a free agent following the 2020 season.

Vince Velasquez – $3.6 million

Velasquez, who was acquired in the Ken Giles trade in 2015, has been frustrating for most of his Phillies tenure. However, the stuff is there, and the Phillies trust him enough that they tendered him a contract for this season. Velasquez will enter his final year of arbitration in 2021 before becoming a free agent.

Adam Morgan – $1.575 million

Morgan spent parts of the 2019 season on the injured list but was reliable when healthy. The biggest question will be how the new three-batter minimum rule affects Morgan, as he was often used in one-batter situations in 2019. Morgan will enter his third year of arbitration in 2021 before becoming a free agent.

Zach Eflin – $2.625 million

Eflin was the Phillies second most reliable starter in 2019 and was effective other than a mid-summer stretch in which he struggled greatly. He will enter his third year of arbitration in 2021 before becoming a free agent.

David Robertson – $11 million

The Phillies signed Robertson because of his ability to stay on the field and avoid injuries throughout his career. That has worked out horribly, and it is not likely that Robertson pitches at all in 2020 after undergoing Tommy John surgery last August. Robertson has a $12 million club option in 2021 that includes a $2 million buyout.

Aaron Nola – $8.5 million

Nola signed a 4 year/$45 million contract extension last offseason. The team’s ace is owed $12.25 million in 2021 and $15.5 million in 2022, with a $16 million team option in 2023.

Zack Wheeler – $23.6 million

The Phillies signed Wheeler to a 5-year/$118 million contract in November. While the price appeared steep at the time of the signing, subsequent deals to Stephen Strasburg and Gerrit Cole showed that the Phillies got Wheeler at a fair market value, especially if he hasn’t peaked.

Infield

Andrew Knapp – $710K

Knapp is certainly not a fan favorite, but he has improved defensively during his three years as a Phillie. He is likely to spend 2020 as the team’s backup catcher and has two remaining seasons of arbitration eligibility before becoming a free agent.

Jean Segura – $14.85 million

The Phillies acquired Segura in the trade that sent Carlos Santana and J.P. Crawford to Seattle in December of 2018. He was a mild disappointment both at the plate and in the field, and the expectation is that the team will move him to second base in the future. Segura is owed $14.85 million both in 2021 and 2022, with a $17 million team option in 2023.

Scott Kingery – $1.5 million

The Phillies made history prior to the 2018 season when they gave Kingery a contract extension prior to his major league debut. After struggling greatly in 2018, Kingery had a couple of really good stretches in 2019 that showed why he received that extension. It is unclear where he will play in 2020, but he is owed $4 million, $6 million and $8 million respectively from 2021 to 2023. He has $13 million, $14 million and $15 million club options from 2024 to 2026.

Didi Gregorius – $14 million

The Phillies signed Gregorius to a one-year/$14 million contract at the conclusion of the MLB Winter Meetings last month. Gregorius was a top shortstop in baseball before missing time after Tommy John surgery and struggling in 2019. His contract stands as a prove-it deal, and he will become a free agent following the 2020 season.

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Outfield

Bryce Harper – $27.54 million

The Phillies gave Harper a 13-year/$330 million contract last offseason, making him the highest paid player currently on the roster. He is owed $27.54 yearly through 2028 and then $23.54 million from 2029-2031.

Andrew McCutchen – $17 million

Like Robertson, the Phillies signed McCutchen partly due to his ability to stay on the field, and like Robertson, McCutchen suffered a serious injury that sidelined him for a majority of the 2019 season

. The 33-year-old is expected to return in 2021, but it remains to be seen how good he will be after suffering and recovering from a torn ACL. McCutchen is owed $20 million in 2021 and has a $15 million club option in 2022 with a $3 million buyout.

Odubel Herrera – $7.35 million

Herrera didn’t play after he was arrested in late May following a domestic incident between him and his girlfriend. He was suspended for the remainder of the season in July, but his punishment likely ends there. It is unclear what the Phillies intentions are with Herrera, but he is owed another $10.35 million in 2021, with club options of $11.5 million in 2022 and $12.5 million in 2023. They may move on from him, but for now, he remains a member of the roster.

Jay Bruce – $1.75 million

The Phillies acquired Bruce in June, and he was great at first prior to struggling to stay healthy down the stretch of the season. He will likely serve as the team’s fourth or fifth outfielder and a valuable power hitter off the bench before becoming a free agent after the 2020 season.

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The remaining contracts will be filled by players who have not yet become arbitration eligible, such as Rhys Hoskins.

An important consideration is that the number that counts against the luxury tax only takes into account the annual average value (AAV) of each player’s contract. So, for example, while Jake Arrieta is only making $20 million in 2020, the AAV of his contract is $25 million, so that is what will be counted against the luxury tax salary for the Phillies.

So, with that in mind, the Phillies have a minimum of $201.1 million in committed salary in 2020, leaving them with $6.9 million before breaking the $208 million luxury tax threshold. However, if they lose the arbitration hearings against Realmuto and Neris, they will be left with just $3.5 million in room before entering the threshold.

Any moves the Phillies make between now and the start of the regular season will be minor. But, they could prove crucial, as a significant part of the late collapse in 2019 was a lack of depth.