Merrifield and Bohm contracts launch Phillies into dangerous payroll tax territory

The recent transactions have put the Phillies over the second luxury tax threshold of $257 million. How far will the organization be willing to exceed the luxury tax?

Toronto Blue Jays v Oakland Athletics
Toronto Blue Jays v Oakland Athletics / Michael Zagaris/GettyImages
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The Philadelphia Phillies made a roster move on Feb. 16, agreeing to a one-year, $7 million deal with free agent utility player Whit Merrifield. The contract includes a $1 million buyout on an $8 million club option in 2025.

Announced the same day, third baseman Alec Bohm will receive $4 million from the franchise after he won his arbitration case over the Phillies' offer of $3.4 million,

According to posts from The Philadelphia Inquirer's Phillies writer, Alex Coffey, the recent transactions have put the team at a luxury tax payroll of $260.8 million, over the second tax threshold of $257 million. They will not incur a draft penalty unless they exceed $277 million. The organization now has to pay a 62 percent tax, up from the previous 50 percent.

Cot's Baseball Contracts lists the $260.8 million payroll accounts for the Phillies 40-man roster, the fifth highest in Major League Baseball. The club's year-end 40-man roster payroll is projected to be at $246.6 million, the fourth highest in the league.

Could the Phillies' current payroll limit moves during the regular season?

If the Phillies want to avoid paying a higher percentage of a luxury tax and draft penalties, they will need to limit the amount of roster moves they make during the regular season. Matt Winkelman of Phillies Minor Thoughts holds the recent moves by the franchise are a bad use of their money. He believes the club should have saved some of the money spent by keeping the Trade Deadline in mind.

Disregarding any injuries the club may have at the time of the July 30 Trade Deadline, the Phillies could pursue another starting pitcher, reliever, or bench player by the deadline. The team is a contender for a championship and will be looking to trade for players who could put them in the best position to win.

Bohm has become an integral part of the Phillies over the last few seasons, while Merrifield is a solid addition. The 35-year-old made the American League All-Star team when he was a member of the Toronto Blue Jays last season.

Philadelphia will benefit from his experience and ability as a utility player; he is capable of playing both in the infield and outfield. Acquiring a veteran player like Merrifield, whose slash line of .272/.318/.382 last year, is an improvement over another seasoned utility player the club has in Jake Cave. The 31-year-old finished with a .212/.272/.348 line in 2023.

Outfielder Brandon Marsh has a good chance of being available for the start of the regular season, but if he is not, Merrifield will be ready to go and will receive playing time in the outfield for the Phillies.

While the moves limit their financial flexibility without being taxed and penalized further, Phillies owner John Middleton appears willing to spend if it puts the team in a better position to win a championship.

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