Categories: Phillies Beat with Destiny Lugardo

How much space will the Phillies have under the luxury tax once the owner-imposed lockout ends?

We don’t know when the owner-imposed lockout will end. The current work stoppage is unlikely to cut into the regular season, but it could lead to a very short window for a flurry of free agent and trade activity prior to spring training.

Dave Dombrowski is the president of baseball operations for the Phillies. (Gerry Angus/Icon Sportswire)

We also don’t know what the luxury tax is actually going to be. Technically, the 2021 collective bargaining tax threshold of $210 million expired when the last collective bargaining agreement expired on Dec. 1 at 11:59 p.m ET. What we do know is that both sides have reportedly proposed a higher luxury tax threshold.

According to USA Today, the league proposed a $214 million threshold for 2022 that will steadily increase to $220 million in the final season of a potential five-year agreement. The players seek a $245 million tax with no progressive penalties for going over.

It’s likely the two sides will meet somewhere in the middle when this is all settled. For now, the $210 million threshold from last season should serve as a baseline to help explain where the Phillies are at the moment.

According to Dave Dombrowski, the Phillies have (probably) found their closer in Corey Knebel. At the very least, they’re still in need of a left fielder, center fielder and one additional back end bullpen option. After that, the Phillies probably need another reliever, a back end starter and another position player who is on the fringe of being a solid everyday player to feel good about their depth at the major league level.

The front office will have plenty of work to do once the work stoppage ends. For now, here’s a look at where the Phillies are in terms of payroll.

A few things should be noted:

The luxury tax payroll is calculated using a contract’s average annual value. This is unlikely to change in a new CBA. To use an example, Kyle Gibson signed a front-loaded three-year, $28 million contract with the Texas Rangers. The Phillies will pay his base salary of $7 million in 2022, but his average annual value, the number that counts toward the luxury tax, is $9,333,333.
Every player who is on the 40-man roster and his salary counts against the luxury tax. This includes minor leaguers and players on the 60-day injured list. It also includes players who are no longer on the 40-man roster that have a guaranteed contract. Scott Kingery’s average annual value of $4 million still counts towards the luxury tax.
The estimations here use last season’s minimum salary of $570,500. That number is expected to rise in the next CBA.
These estimations also utilize FanGraphs Roster Resource’s way of calculating how many player seasons a team needs through 162 games. This is the big reason why the Phillies’ payroll estimations largely differ depending on what website you visit. Spotrac includes 28 Phillies players currently on the 40-man roster and uses that as a base to estimate the payroll. FanGraphs Roster Resource estimates that any given team needs at least 33 player seasons to get through a full regular season. To get the value for how much a team will spend on players who have yet to reach arbitration, FanGraphs suggests that you take 33 and subtract that number by the amount of players currently on the 40-man roster that are either eligible for salary arbitration or are on a guaranteed contract. At the moment, that number for the Phillies is 20.

Here’s a look at where the Phillies payroll stands.

Players with Guaranteed Contracts

Bryce Harper: AAV: $25,384,615; 2022 Base Salary: $26,000,000
Zack Wheeler: AAV: $23,600,000; 2022 Base Salary: $26,000,000
J.T. Realmuto: AAV: $23,100,000; 2022 Base Salary: $23,875,000
Jean Segura: AAV: $14,000,000; 2022 Base Salary: $14,250,000
Didi Gregorius: AAV: $14,000,000; 2022 Base Salary: $14,500,000
Aaron Nola: AAV: $11,250,000; 2022 Base Salary: $15,000,000
Corey Knebel: AAV: $10,000,000; 2022 Base Salary: $10,000,000*
Kyle Gibson: AAV: $9,333,333; 2022 Base Salary: $7,000,000
Scott Kingery: AAV: $4,000,000; 2022 Base Salary: $6,000,000
Johan Camargo AAV: $1,400,000; 2022 Base Salary: $1,400,000*

Total Luxury Tax Salary (AAV) from Guaranteed Contracts: $136,067,948

*Corey Knebel’s 2022 salary was reported by Jon Heyman of Audacy Sports. Tim Dierkes of MLB Trade Rumors was first to report Johan Camargo’s 2022 salary.

Players Eligible for Salary Arbitration

Rhys Hoskins: $7,600,000**
Zach Eflin: $6,000,000**
José Alvarado: $1,900,000**
Seranthony Domínguez: $725,000

Total Luxury Tax Salary from Arbitration Eligible Players: $16,225,000**

**The Phillies have tendered 2022 contracts to Rhys Hoskins, Zach Eflin and José Alvarado, but the three players have not yet agreed to a salary. The number used is MLB Trade Rumors’ projected salary. Seranthony Domínguez and the Phillies have already reportedly agreed upon a one-year, $725,000 contract.

Notable Players who are Not Yet Eligible for Salary Arbitration

These players all have less than three years of service time and are expected to the make the league minimum in 2022 while they are on the MLB roster.

Ranger Suárez (2.112 years of service time)
Sam Coonrod (2.078 years of service time)
Alec Bohm (1.106 years of service time)
Garrett Stubbs (1.104 years of service time)
Connor Brogdon (1.081 years of service time)
Bailey Falter (0.119 years of service time)
Matt Vierling (0.043 years of service time)

Guaranteed Contracts (AAV)	$136,067,948
Arbitration Salaries	$16,225,000
Pre-Arbitration Salaries	$11,410,000
MiLB players on 40-man roster	$2,250,000
Player Benefits	$16,000,000
Luxury Tax Payroll	$181,952,948
Space Under 2021 Luxury Tax Threshold ($210 million)	$28,047,052

Sources: FanGraphs Roster Resource and MLB Trade Rumors

Under the owners proposal of a $214 million luxury tax for 2022, the Phillies would have $32,047,052 left to spend before accruing further penalties. Under the Players Association’s $245 million 2022 proposed threshold, the Phillies would have $63,047,052 in space under the tax.