In just over one month, the Phillies have their first Spring Training game against the Detriot Tigers. One month until baseball is back. The Phillies filled some needs in the offseason, but there are still some concerns. In fact, I would even ask the question – ‘what is the front office thinking?’
Why is there is a reluctance for the Phillies to go over the luxury tax? This concept seems really odd to me considering the amount of money they have spent on free-agent players. More on this a little later, but lets first explain what it means to go over the luxury tax.
The Luxury Tax Penalty
For the 2020 season, the Luxury Tax will be $208 million. Here is the penalty on exceeding the luxury tax as posted on MLBN.com:
“A club exceeding the Competitive Balance Tax threshold for the first time must pay a 20 percent tax on all overages. A club exceeding the threshold for a second consecutive season will see that figure rise to 30 percent, and three or more straight seasons of exceeding the threshold come with a 50 percent luxury tax. If a club dips below the luxury tax threshold for a season, the penalty level is reset. So, a club that exceeds the threshold for two straight seasons but then drops below that level would be back at 20 percent the next time it exceeds the threshold.
“Clubs that exceed the threshold by $20 million to $40 million are also subject to a 12 percent surtax. Meanwhile, those who exceed it by more than $40 million are taxed at a 42.5 percent rate the first time and a 45 percent rate if they exceed it by more than $40 million again the following year(s).
“Beginning in 2018, clubs that are $40 million or more above the threshold shall have their highest selection in the next Rule 4 Draft moved back 10 places unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead.”
Back to the Phillies Off-Season
Matt Klentak has addressed a major concern by signing Zack Wheeler. Wheeler fills a major hole in the starting rotation. However, Klentak was content on just signing Wheeler when the starting rotation was in need of at least two starters. Wheeler became just the fifth Phillies player to get a $100+ million contract, which is a little odd since he has been bitten by the injury bug during his major league career. However in the past two seasons, he has shown really good stuff.
Last year he was 11-8 with a 3.96 ERA. His ERA and WHIP put him around the 35th best pitcher in baseball. His stats are similar to Aaron Nola who had a down year. The reason I mention this is that Klentak and company went out and gave out a 100+ million contract to a number two in the rotation starter. I am not criticizing this move, I just am criticizing what they are doing next.
The Best Catcher in Baseball
The Phillies have the best catcher in baseball on their roster, sort of. J.T Realmuto has proven his value and it has been a while since the Phillies. He was their lone all-star in 2019 and also won the Silver Slugger and Gold Glove. On Monday night he was honored by the Philadelphia Sports Writers Association as Outstanding Pro Athlete.
All of that plays into the question, what is Klentak thinking? Realmuto and the Phillies opted for arbitration. Realmuto is asking for $12.4 million for the upcoming year, and the Phillies countered with a $10 million dollar offer. Fighting over $2.4 million? I can’t even fathom this.
Realmuto vs the Luxury Tax
Let’s just put this in terms of going over the luxury tax. Let’s say that Klentak gives Realmuto $12.4 and they are over the tax by 2.4 million. They would have to pay a tax of $480,000. That is pennies for this organization. If they are willing to gamble with the best catcher in baseball for $2.4 Million and he walks, everybody in the front office should be fired. Luckily Realmuto seems to have his head in the right place. According to the Inquires’ Matt Breen, Realmuto stated the following:
“No, no,” Realmuto said. “I have a pretty good understanding of the process and I know it’s not the Phillies trying to slight me at all. It’s more the system. There are no hard feelings there. Anybody who knows much about the arbitration process knows that it’s business. It’s not necessarily me against the Phillies right now. There’s definitely not any hard feelings there. So, I feel like we’re in the same place we were two or three months ago with the contract extension.”
Klentak’s Other Deal
So besides the obvious of Bryce Harper and Wheeler being paid more than Realmuto, let’s look at another player who will be paid more than J.T. this season, but before we do let’s look at Realmuto’s numbers. He hit .275 with a .328 OBP. Realmuto drove in 83 runs while scoring 92 runs. He also hit 25 home runs.
The Phillies signed Didi Gregorius to a one year $14 million deal. Last season Gregorius hit .238 with an OBP of .276. He drove in 61 runs, hit 16 home runs and scored 44 times. Gregorius had a down year. Even still, his career average and OBP are lower than Realmuto’s. He does have more RBI, runs and home runs, however, he has over 500 more at-bats in his career. Is Didi really worth $4 million more? Especially since the Phillies had an established shortstop when he was signed?
Speaking of the other shortstop, Jean Segura is set to make $14.85 million in 2020. The Phillies are paying $28.85 million between two shortstops. Why would Klentak pay that much for two shortstops, but fail to pay the best catcher in baseball an extra $2.4 million?
If they do not come to a deal, the arbitrator will rule next month. Klentak can’t mess this up as they look to sign Realmuto to a long-term deal. However, after the debacle of a press conference announcing the firing of Gabe Kapler, my confidence in this group is not high.
Mandatory Credit: Aaron Doster-USA TODAY Sports
