CLEARWATER, Fla. – Zack Wheeler's three-year, $126 million contract extension with the Phillies won't kick in until 2025, so it won't have any impact on their 2024 payroll, but it's actually worth looking ahead a year to where things stand after Wheeler and Aaron Nola signed contracts that will pay them a total of $66.6 million next season.
“We have high salaries, you know,” President of Baseball Operations Dave Dombrowski said Monday. “There are challenges because there are different standards, but we will meet those challenges when we know we can start at the top of the course with Wheeler and Nola.”
Salaries 2024
The final season of Wheeler's five-year, $118 million contract is the number the Phillies are paying. His average annual salary is $23.6 million, which is significantly less than the $42 million he will start next year with his extension.
The Phillies carry a record payroll of about $246 million this season. The number that applies to the competitive credit tax, often referred to as the MLB luxury tax, is about $262 million.
The luxury tax threshold is $237 million but there are three additional levels with increasing fines of $257 million, $277 million and $297 million.
Last season, the Phillies exceeded the tax by about $23 million and paid a fine of $6.98 million. This was the second year in a row they had exceeded the tax, so a 30% penalty was imposed on all transgressions instead of the 20% tax for the first time.
When a team exceeds the tax for three or more consecutive seasons, the penalty is 50 percent for every dollar over the threshold. Luxury tax numbers are calculated for teams at the end of the season, but the only way the Phillies won't go above and beyond in 2024 is if they break up and sell off a significant number of pieces by the trade deadline, which is highly unlikely given the resources they've invested in this club.
“We set these standards on an annual basis,” Dombrowski said. “We also have great support – our fans are great coming through the gates, great sponsorship in that regard so we're increasing revenue, which is always a challenge. There's a limit to what we can do. It's not unlimited. But those are going to be questions I think we're going to face.” More at the end of the year once we see how our season progresses.”
Room to add?
The Phillies' payroll increased by about $35 million from 2021 to 2022, $11 million from 2022 to 2023, and another $7 million from 2023 to 2024.
They added more at every turn and continued to make the kinds of finishing moves even when it looked like they were done, bringing in veterans like Craig Kimbrel last winter, Michael Lorenzen last summer and Whit Merrifield this spring.
Is there still room for another big addition if needed during or after the season?
“I believe there is a way to do this if it becomes necessary,” managing partner John Middleton said Monday. “But maybe the star we add is (Andrew) Painter or (Mick) Appel, or (Johan) Rojas who suddenly becomes comfortable at the plate and starts hitting .285 to .300 with his defense and is a star.” And (Brandon) Marsh could be a star. (Bryson) Stott, I think he's already a star. He is a Gold Glove finalist. He should be an All-Star in my opinion this year. He could win a Gold Glove Award. Golden Glove. “This is what you need.”
The only player from that group who will not factor into the Phillies' 2024 plans is Painter, who is recovering from Tommy John surgery last July. He won't play competitively until 2025, unless he's able to log some innings in the Arizona Fall League.
Appel, the Phillies' No. 2 prospect behind Painter, is expected to spend most of the season in Triple A. Reaching the major leagues in 24 is his goal and will be largely determined by his control.
Salaries 2025
When Wheeler's extension kicks in, the Phillies will have roughly $216 million committed to their 2025 payroll, with $211 of that going to nine players: Wheeler, Nola, Bryce Harper, Trea Turner, JT Realmuto, Kyle Schwarber, Nick Castellanos, Taijuan Walker and Jose Alvarado.
They also have an $8 million option on Seranthony Dominguez.
Guard Suarez and Gregory Soto, who earned $5.05 million and $5 million this season, will enter their third and final arbitration years with rising salaries. Alec Bohm will receive a raise from his first-year arbitration pool of $4 million.
Matt Strahm and Jeff Hoffman's contracts will be taken off the books, freeing up $9.7 million, but they are important parts of the team that will be brought back or traded at a cost via free agency or a trade.
So, if the Phillies were to exercise Dominguez's option, keep Suarez, Soto and Bohm at high salaries and either keep Sterham and Hoffman or trade them to relievers at a similar combined cost, they would have about $251 million committed in 2025 payroll.
This is without considering them picking up Merrifield's second-year option or factoring in any of the minor arbitration raises for players like Marsh, Cristian Pache, Stott and Edmundo Sosa.
That's why it's so important to have young, cost-controlled players who round out the roster.
“You've got to have some really good young guys,” Middleton said. “You need guys like Stott and Bohm, you need Rojas to develop, you need Marsh to continue to develop, you need Abel, Pinter, (Griff) McGary to develop and (Christopher) Sanchez to develop. You need that. That's the kind of combination you need to have.” It has to be really successful in baseball, in my experience.”
