Phillies: Don’t blame Matt Klentak, blame luxury tax
Phillies fans can point fingers at Matt Klentak, but what more can he do?
Phillies fans went into this offseason expecting more stupid money to be thrown around like last year. With holes across the roster, an overhaul was expected after the firing of manager Gabe Kapler and selection of Joe Girardi to run the bench.
That overhaul of the roster (which would have included three new starters, several relievers, and two big bats) was, in many ways, unrealistic for the Phillies. It’s not entirely their fault that they couldn’t spend more stupid money this offseason, not because they don’t have the money, but because of the luxury tax.
The Competitive Balance Tax, better known as baseball’s luxury tax, is put in for when a club exceeding the set threshold for the first time must pay a 20 percent tax on all overages.
Philadelphia is right up against the luxury tax with Spotrac giving them about $5.3 million before they’d have to pay the tax. Having only that much space put them out of the Dellin Betances sweepstakes after he signed a $10.5 million deal with the Mets.
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Should the Phillies exceed the threshold by $20 million to $40 million are also subject to a 12 percent surtax. The rate goes higher once you exceed $40 million over the threshold.
Without the tax, it’s not beyond reason to think Philadelphia would have made a stronger push for Gerrit Cole or Stephen Strasburg. As a large market team, Philadelphia has the financial resources to pay big contracts, but they don’t want a couple of $10 million relievers to turn into a 20-50 percent tax.
Unless the Phillies can unload the contracts of Jean Segura, Jake Arrieta, or Odubel Herrera (all three moves are very unlikely) they’re pressed against the tax this year. They have room next year, but still need to pay J.T. Realmuto, possibly sign another starter, and figure out what to do when Didi Gregorius’ one year deal comes up.
When you look at the Phillies roster after the signings of Zack Wheeler and Gregorius, there aren’t that many places the Phillies can buy to improve. Many of the best starting pitchers available aren’t as good and are more expensive than the in-house options, no matter how unreliable they are.
Philadelphia could find a more stable option for third base, but that would create a log jam for top prospect Alec Bohm. The organization also needs to know what they have in first round pick Adam Haseley, who projects to be the opening day center fielder.
Barring a trade, the Phillies roster looks to be set in stone thanks to the luxury tax and the fast-pace of the offseason. They could add another starter, solidify the bench, or bolster an outfield spot, but at a steep price which ownership appears unwilling to pay.
Don’t be blaming management when they don’t have the space to spend money without taking on a major tax expense.