Why did Phillies owner John Middleton pick now to go over the tax?


CLEARWATER, Fla. – Dave Dombrowski had John Middleton at "hello."

Or maybe it was "good morning."

Either way, a big sales pitch really wasn't needed.

The day after locking up free-agent slugger Kyle Schwarber for $79 million last week, Dombrowski wanted the OK to make a serious run at another expensive free agent bat, the one belonging to Nick Castellanos.

The Phillies were already creeping up on the much talked about luxury tax threshold and Castellanos would put them over it for the first time in club history.

"It was a short conversation," Middleton said. "I started to interrupt him because I knew where it was going and I was fine with it.

"But Dave had worked on this and wanted to lay out the logic to it and I said, 'OK, I'll be quiet.' After 20 minutes, I said yes again. But I knew in the first minute where he was going."

Late Friday night, the Phillies agreed to terms on a five-year, $100 million contract with Castellanos, who will be introduced in a news conference here on Wednesday.

Schwarber had his moment at the dais Monday morning. Middleton took it all in from the back of the room. 

When the news conference ended, the Phillies' managing partner talked about the twin signings and how they pushed the team's payroll to a record $240 million -- $10 million over the threshold of the competitive balance tax.

Back in October 2019, Middleton said he'd be willing to exceed the tax for "the right opportunity," something that would dramatically enhance the team's chances of winning a championship.

Dombrowski convinced him that Castellanos was it.

"That's exactly what he said," Middleton said. "We also talked about (additions) that weren't as aggressive. But at the end of the day, he said, 'This is what I think you need to do. I think this is the time to strike.' "

That was good enough for Middleton.

Where do I sign?

"Dave is the only GM who has taken three different franchises to the World Series," Middleton said. "He's one of five who has won two with two different franchises. When that guy says to you, 'This is an opportunity.' ... Well, he's been there."

The decision to exceed the luxury tax has created almost as much buzz as the additions of Schwarber and Castellanos themselves. Obviously, it's all intertwined and connected, but the tax has been a hot-button issue as the Phillies' playoff drought has reached 10 years, even with National League MVP Bryce Harper and Cy Young runner-up Zack Wheeler on the roster in 2021.

"This is a team sport," Middleton said. "The MVP in the National League gets to bat once every nine times. He may go an entire game without having a ball hit to him in the field. It just takes so many people and I think for us it was about building that base.

"Basically, you look at where the team is, who's on it, the pitching staff, the bullpen, the bench, the starting position players, and you say to yourself, 'If we add this person -- or in this case, it's two people to the group with Kyle and Nick -- does that really move the needle?' "

Dombrowski convinced Middleton that it does.

Middleton shot down a couple of popular notions, one relating to Harper, the other relating to his approach on the luxury tax.

Harper last week was outspoken about adding top free agents. He spoke of Schwarber and Castellanos by name. Middleton shook his head dramatically when asked if Harper's comments in any way spurred him to make the signings.

"No," Middleton said. "I mean, Bryce wants to win. He may want to win as much as I do but he may not. But I'll concede that he probably wants to win as much as I do because he's just built that way and so am I. 

"It's always just been about 'when do we get there?' And I like his enthusiasm. I think it's good. Look, Bryce said to us, he said to Dave, he said to me, even before we signed Kyle, he said, 'You know what I want, but I understand you're going to try and sometimes you can succeed and sometimes you can't.' He understands that. 

"But he also talked about having confidence in us and I think we've ... when you sign Bryce and then Wheeler and then J.T. (Realmuto), you know, you kind of at some point, I think, have proven yourself."

Even after saying he'd be willing to go over the luxury tax for the right opportunity, a narrative existed that Middleton was against going over it.

He seemed amused by that.

"You hear that, but the question then is: What factual evidence would you provide to support that statement because there is none?" he said. "There's no memo in the file that says, 'You may not do this.' I've heard people say, 'Well, there's a directive.' Really? Who did I? ... Did I write it down? Was it a verbal directive? Who was I talking to? When did I say it?

"There was no truth to any of that. But you know what, sometimes you just have to be patient and wait until the right moment and then you get to do what you've always said you were going to do all along."

Middleton said he's always aware of the feelings of the team's fan base.

"I made the comment in my first press conference about how really well-run companies pay attention to the customers," he said. "It doesn't matter if you're making automobiles or toothpaste, you need to know what your customers are thinking and you get customer feedback. But customers don't run the business. Their input is critical, but they don't make the decisions. Otherwise, you might as well get rid of everybody and just go out there -- I'm not a social media person, but I guess you could line up something on social media and say, 'Please vote over the next 48 hours about whether we want to sign Player No. 1, Player No. 2 or Player No. 3, and, by the way, we'll come back to you with the approval of the terms and conditions.' 

"So, you're aware of it. You know. But just because people are talking, whether it's on talk radio or what have you, doesn't mean that's the way that every fan feels. When I walk around the city, I will tell you that far more people come up to me and say, 'I like what you're doing, be patient, stay the course, build the organization,' than, 'Hey, John, why don't you go sign so-and-so?" It's literally 5 to 1, 6 to 1, 10 to 1.  

"Again, if you ask businesses, and I've run businesses besides this business, you hear people are much more inclined to complain than they are to write you and say, 'Wow, I had a really great experience staying at your hotel last night,' or 'I really like this product that you make.' 

"So, you have to take that into account too. It's not the way that everybody feels, but you have to be aware of it. You can't be ignorant of it, and you can't be dismissive of it either. That would be a mistake."

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