So the Phillies have re-signed Cole Hamels to a six-year, $144 million deal, with a vesting option for a seventh. The Phils’ youngest ace is in the fold through 2018, and possibly, 2019.
It’s wonderful news and something the Phillies really had to do.
But here’s the big question.
Hamels’ contract means the Phillies are going to have some big credit card bills to pay in the next few months.
If Cole’s contract does pay him $25 million a season, like teammate Cliff Lee, that means the Phillies will have $90 million committed to four players in 2013 (Lee, Hamels, Roy Halladay and Ryan Howard). When you add in Chase Utley’s $15 million deal, Jonathan Papelbon’s $13 million, Jimmy Rollins’ $11 million, Kyle Kendrick’s $4.5 million (I know, $4.5 million for Kendrick… really, I know), a $5 million option for Carlos Ruiz, and deals for Wigginton, Nix, Bastardo and Mayberry, the Phils are looking at about $117 million in commitments for 2013. (Contract numbers courtesy of Cot’s Contracts).
That’s $117 for 13 players. And when you also consider that Hunter Pence will likely cost about $14 million in arbitration, that number swells to approximately $131 million for 14 players.
Major League Baseball’s luxury tax is expected to be $178 million again next season. It’s hard to see how Ruben Amaro Jr. is going to fill some gaping holes on the roster with that little cash to go around.
The luxury tax will have a big impact on what moves, if any, Amaro makes at the trade deadline this year. The Phils opened the season with a $174 million payroll, and with incentives to current Major Leaguers and minor league players brought up to the big club, it’s a virtual certainty the Phils will go over the luxury tax in 2012 if Amaro doesn’t shed some payroll in the next week.
That could be why the Phils have apparently been offering Shane Victorino for a warm ham sandwich and a coke.
The tricky thing about the luxury tax is that the penalty for violating it escalates each year a team is over the number. For first time offenders, the amount is 17.5% on every dollar they go over. Second-time offenders pay 30%. Phillies officials seem resigned to the fact they’ll probably have to go over the luxury tax in 2013, but want to make sure they’re only paying that 17.5% next year rather than the 30%.
That sets up an interesting dilemma for Amaro and the Phils’ front office. The team has numerous pieces that would be attractive to other clubs and would also allow them to shed payroll. Victorino is most likely to go. Pence’s name has been in the papers a lot too. Reports say the Phils are at least listening to offers on Cliff Lee, but seem determined to head into next year behind their vaunted trio of aces, so a trade of Lee is doubtful. Placido Polanco would have been a name that garnered attention, but his Faberge egg-like-body pretty much rules him out of any deals. The Phils would love to move Joe Blanton, and a string of recent quality starts may actually present an opportunity to do that.
Trading any of those players will provide some salary relief for the Phils, and likely drop them under the luxury tax for 2012. But with the Phils in the middle of a four-game winning streak, having won all four games in their final at-bat, three on walk-off hits, Amaro also has to be careful not to alienate the clubhouse and give up on the team too soon. At Wednesday’s Cole Hamels press conference, Amaro seemed to indicate that he’s still considering standing pat at the deadline.
“In a lot of way we have our whole arsenal together,” Amaro said. “The biggest thing we have is the presence of those big three — Roy (Halladay), Chase and Ryan in the middle of the lineup. That was the club we hoped to have coming out of spring training. Injuries are a part of the game. All we can do is try to play the best possible baseball we can and hope we can put ourselves in a position to get back into this thing.”
Phils President Dave Montgomery also said the Phils wouldn’t necessarily be buyers OR sellers at the deadline.
“We’re improvers,” he said. “We’re always looking for ways to improve. We had a really disappointing first half, but there’s so much left of this year.” Montgomery added, “We have the club we envisioned now. We hope we can build some excitement with that.”
In fact, the Phils could be players for a guy like San Diego third baseman Chase Headley, a rising young switch-hitter batting .268/.361/.423 with an OPS of .784 11 HRs, 50 RBIs and 21 doubles. He’s just 28 years old and is under team control through 2014. The Phillies have absolutely no warm bodies at third base in the minors and this year’s free agent class looks to be pretty crappy. The Phils might be willing to give up a prospect like Jesse Biddle for Headley if the Padres are interested.
The smart money says Victorino will be gone, Juan Pierre will probably be gone, and there is growing enthusiasm that the Phils will find a taker for Blanton. Any trade of Pence must result in multiple close-to-Major League-ready position prospects coming back to the Phils in return. Cliff Lee probably isn’t going anywhere.
It’s wonderful the Phillies re-signed Cole Hamels to a long term deal. What’s less wonderful is some of the other contracts done by Ruben (Howard and Papelbon the most glaring) that could keep the Phils from fixing the third base problem, the bullpen issues, and a potential center fielder to replace Victorino.
It’s hard to imagine a way Amaro can fix all these things without going over the luxury tax in 2013. The math just doesn’t seem to add up.
Which is why this will be Ruben Amaro’s most challenging week as the Phils’ GM. Does he dump quality players simply to save some cash? Does he hold out for good prospects in return, possibly eating some cash to get them? Or does he just stand pat and give this team a chance to play its way into a miracle?
David Montgomery was right. The Phillies should not be buyers, and they should not be sellers.
The Phillies should be improvers.
Whatever that means.