How Much Money Can the Phillies Spend This Offseason?

With the luxury tax threshold no longer acting as a de facto salary cap, how much money do the Philadelphia Phillies have at their disposal this winter?

Author:
Leo Morgenstern
Nov 27, 2022 2:26 PM EST

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Philadelphia Phillies

The Philadelphia Phillies are getting ready to spend this winter. They've been major players in each of the past five offseasons, and this year should be no different. After all, the Phillies are the reigning National League Champions, and they should be willing to do whatever it takes to defend that title.

Earlier this November, president of baseball operations Dave Dombrowski played coy when asked about the payroll for 2023. He repeated the idea that he has "flexibility" in his budget but neglected to elaborate.

Thus, we can only guess exactly how much money he has to work with. Thankfully, sources such as Roster Resource and MLB Trade Rumors exist to make that guesswork much less complicated.

The 2023 Payroll As It Stands

The Phillies have eight players with guaranteed salaries for next season. They're listed here, with the annual average value of their contract in parentheses:

Bryce Harper ($25.38 million)
Zack Wheeler ($23.6 million)
J.T. Realmuto ($23.1 million)
Nick Castellanos ($20 million)
Kyle Schwarber ($19.75 million)
Aaron Nola ($16 million)
Scott Kingery ($4 million)
Sam Coonrod ($775,000)

In total, that adds up to just under $133 million.

In addition, the Phillies have five more players who are set to receive raises in arbitration. Here are those players, along with their projected 2023 salary from MLB Trade Rumors:

Rhys Hoskins ($12.6 million)
Ranger Suárez ($3.5 million)
José Alvarado ($3.2 million)
Seranthony Domínguez ($2 million)
Edmundo Sosa ($1 million)

In total, that's an estimated $22.3 million. Combine that with the $133 million in guaranteed contracts, and we're dealing with about $155 million in luxury tax payroll so far.

Next, we need to add in all the pre-arbitration players making the league's minimum salary. This is difficult to calculate, because it depends on how many pre-arb players the team ends up rostering and how many days each one spends with the big league club. Thankfully, Roster Resource does the hard work for us and estimates the Phillies will spend $15.12 million on these players. That number will change as the team adds more players on guaranteed MLB contracts, but it’s a good ballpark figure. We're looking at a payroll close to $170 million now.

The salaries of minor league players on the 40-man roster also count toward the luxury tax, so we need to add in an estimate for those players too. Roster Resource has that figure at $2.5 million. In addition, MLB teams now must pay into a bonus pool for pre-arb players (as per the new CBA) which adds another $1.67 million to the payroll calculations.

Finally, we have to consider player benefits that each team provides. This covers non-salary payments teams are responsible for, such as health insurance. The good folks at Roster Resource peg this number at $16.5 million for 2023.

All in all, this leaves us with a grand total of $190.7 million. So how much do the Phillies have to s

*Phillies President of Baseball Operations Dave Dombrowski*
Lucas Peltier-USA TODAY Sports

Dombrowski's Offseason Budget

In 2022, the Phillies finished with a luxury tax payroll of about $246 million. They were just under $4 million shy of the $250 million threshold for the second tier of luxury tax penalties.

Next season, the threshold for the second luxury will increase to $253 million. It's safe to assume, at least for now, that Philadelphia will stay under that number. It was a big surprise when they exceeded the first luxury tax threshold this past season, and it would be an even bigger shock if they exceeded the second threshold just a year later.

It's also a good bet that Dombrowski will want to leave himself some flexibility for the trade deadline. Therefore, don't expect the Phillies to go right up to $253 million right away – a ceiling between $245 million and $248 million is more likely.

With that number in mind, Dombrowski has about $55 million to work with this winter. That's easily enough to sign one of the superstar shortstops – whatever the cost – and still have some left over to address needs in the rotation and the bullpen.

However, that budget probably won't be sufficient to sign both a top shortstop and Carlos Rodón (an increasingly popular request from the fanbase).

Free Agent Starter Carlos Rodón
© Stan Szeto-USA TODAY Sports

Rodón is expected to command an annual average salary of at least $25 million, and it's possible he gets significantly more. The same is true for each of the top three free agent shortstops: Trea Turner, Carlos Correa, and Xander Bogaerts.

If the Phillies spend over $50 million on just two players, that wouldn't leave much of anything left over to fill out the bullpen, which is currently short-staffed. Philadelphia cannot afford to go into next season without a few new bullpen arms. So, sadly, it seems like signing Rodón is nothing more than a pipe dream. Unless...

If managing partner John Middleton really wants to make a splash, he'll have to open the purse strings wider than expected. It's unlikely, but not entirely out of the question. After all, the Phillies did just earn a huge influx of cash this October. Their performance in 2022 demonstrated the value of going over the luxury tax, so perhaps Middleton will feel inclined to increase the budget once again this winter.

He has said before that he's willing to spend for "the right player at the right time." Rodón could certainly be that player.

Thus, at the end of the day, it's possible the Phillies have a bigger budget than we think. Until the money is actually spent, however, $55 million is a reasonable estimate to work with.