Phillies Free Agency

Looking at Phillies' payroll with Nola signed and a lot of offseason left

MLB: APR 09 Reds at Phillies

PHILADELPHIA, PA – APRIL 09: Philadelphia Phillies Pitcher Aaron Nola (27) receives hit National League Championship ring alongside primary owner John Middleton and Dave Dombrowski prior to the Major League Baseball Game between the Cincinnati Reds and the Philadelphia Phillies on April 9, 2023, at Citizens Bank Park in Philadelphia, PA. (Photo by Gregory Fisher/Icon Sportswire via Getty Images)

They haven't been quite as free-wheeling as the Mets these last three years — nobody has — but the Phillies finished 2023 with one of the five highest payrolls in Major League Baseball and are poised to spend even more in 2024.

The Phillies' final payroll last season, from a Competitive Balance Tax perspective, was approximately $265 million. The tax is calculated at season's end and the Phils are expected to be penalized an estimate of $10 million. The threshold for 2023 was $233 million so they were about $32 million above, and as a second-time violator, their penalty is 30 percent of overages.

After 2022, the Phillies paid a 20 percent penalty when exceeding the tax for the first time. That was just under $2.9 million.

The threshold for 2024 is $237 million and the Phillies' payroll, after the $172M re-signing of Aaron Nola, is already right up against it.

This, of course, should not serve as a major hindrance for the Phils because baseball's luxury tax is not a salary cap. John Middleton and Phillies ownership has proven in recent seasons that it will spend with the team loaded with talent and contending for the World Series.

The penalties do rise every consecutive season you're over the tax, however, and it adds up quickly. The $2.9 million penalty after 2022 was a mere drop in the bucket representing 1 percent of the Phillies' payroll, but it grew by more than $7 million in 2023 and the penalty for a third-time violator is 50 percent of overages. The Dodgers, for example, tried to reset their luxury tax by falling below it in 2023.

There are also surcharges if you exceed the tax by more than $20 million, more than $40 million or more than $60 million. The 2023 Phillies will likely be hit with one of those surcharges.

The Phils have most of their roster already intact so another splash seems unlikely. Every starting position player is either already signed or under team control, approaching arbitration or set to go through it. Same with all five starting pitchers.

Barring a major trade this offseason, the Phils will return J.T. Realmuto, Bryce Harper, Bryson Stott, Trea Turner, Alec Bohm, Brandon Marsh, Nick Castellanos, Kyle Schwarber, Johan Rojas, Zack Wheeler, Nola, Ranger Suarez, Taijuan Walker, Cristopher Sanchez, Jose Alvarado, Seranthony Dominguez, Jeff Hoffman, Matt Strahm, Orion Kerkering, Gregory Soto, Edmundo Sosa, Cristian Pache and Garrett Stubbs. That's already 23 players for a 26-man roster, though a couple of the bench pieces could be swapped out for others.

The CBT factors in not just the 26-man roster but the annual average salary of the entire 40-man roster, plus any additional player benefits.

The Phillies feel set in their rotation, and president of baseball operations Dave Dombrowski said earlier this month that he doesn't think they need to go out and add a big outfield bat. They are not set with Rojas in center field and need him to show offensive improvement to win the job, but they also do not want to completely block him by signing an everyday outfielder to a multi-year contract. That outfield addition is more likely to be a platoon player or someone who takes closer to 400 plate appearances than 600. Think someone like Eddie Rosario or Hunter Renfroe more so than Teoscar Hernandez, Lourdes Gurriel Jr. or Cody Bellinger, the top free-agent outfielder.

Beyond that extra bat, the only area left to address will be the bullpen. The Phillies lost Craig Kimbrel and Michael Lorenzen from their bullpen and will need to add a late-inning reliever to help fill part of the role Kimbrel played in 2023 before his painful end to the season.

Only five free-agent relievers have agreed to deals so far — Reynaldo Lopez and Joe Jimenez with the Braves, Nick Martinez and Emilio Pagan with the Reds and Osvaldo Bido with the A's. The top bullpen arm on the market is former Padres and Brewers closer Josh Hader, who will command a huge contract, maybe the largest ever for a closer, which currently belongs to Edwin Diaz at $102 million over six years. That number, along with Hader's self-imposed limitations on his usage, make him a questionable fit.

The free-agent options beyond Hader don't jump off the page but interesting ones include Hector Neris, Jordan Hicks, Liam Hendriks, Aroldis Chapman and Andrew Chafin. There's also the trade market.

Even if they make relatively modest additions the rest of the offseason, the Phillies will still enter 2024 with one of the highest payrolls in the majors and will be active and willing to add more at the trade deadline if the right opportunity presents itself. As they should. Their most important players are in the midst of their primes and now is the time to chase the ring tenaciously. The Braves are doing the same thing, set to spend more in 2024 than ever before. There are plenty of big names yet to sign, but as of November 30, the Mets, Phillies and Braves actually have the three highest estimated payrolls in the majors.

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