Some big news hit the Philadelphia Phillies camp after left-handed starter Jesús Luzardo agreed to a five-year, $135 million extension. The deal has a club option for 2032 and will pay Luzardo $27 million a year. Luzardo's $11 million arbitration salary will remain for the 2026 season, with his new deal taking effect in 2027.
The extension keeps the Phillies' starting rotation in good shape but also bumps up their payroll outlook for the future.
Outside the excitement of retaining a solid starter, the Phillies know they had to pony up a significant amount of money to retain Luzardo. He had a couple of bumps over the course of the season but still finished with a 3.92 ERA and 216 strikeouts in 183 2/3 innings. Luzardo proved he could stay healthy through an entire season while also accruing the second-most strikeouts in the NL alongside his seventh-place NL Cy Young finish.
The Phillies let left-hander Ranger Suárez walk this offseason for a similar deal but view Luzardo as a mainstay for the club's starting rotation. The Phillies paid Luzardo what he's worth, but the deal keeps the payroll a bit bloated for the foreseeable future.
How does the Jesús Luzardo extension affect the Phillies' future payroll?
2027 will have the Phillies spending big on another starting pitcher as Luzardo ($27 million) joins Aaron Nola ($24.57 million), Zack Wheeler ($42 million), and Cristopher Sánchez ($6.5 million) as the starters that are under contract for 2027. The $100.07 million combined for 2027 makes up nearly half of the total guaranteed contracts for 2027 ($215.9 million).
The rest of the roster under contract has position players like first baseman Bryce Harper ($27.54 million), shortstop Trea Turner ($27.27 million), designated hitter Kyle Schwarber ($33 million), and catcher J.T. Realmuto ($15 million). Brad Keller is the only reliever under contract in 2027, getting paid $13 million to be the Phillies' setup man.
The remaining money owed will either be in arbitration or pre-arbitration. Garrett Stubbs, Brandon Marsh, Bryson Stott, Jhoan Duran, Tanner Banks, Rafael Marchán, Johan Rojas, and Orion Kerkering will all still be in arbitration come 2027. The estimate for arbitration-eligible players will be $43.2 million, while pre-arbitration is expected to be $6.07 million.
As of now, the expected 2027 tax payroll heading into a potential lockout is roughly $230 million, based on the AAV of the Phillies' roster. The tax implications could drastically change depending on the new CBA agreement, but it will surely be another year that the Phillies are pushed up against the luxury tax threshold. For instance, the 2026 tax payroll is estimated at over $315 million, $71 million over the threshold. The estimated tax bill as a result will be around $53.5 million.
2028 will be similar, except for the potential departure of Zack Wheeler, Jhoan Duran, and Bryson Stott from the payroll. The expected tax payroll as of now is $178 million, but some roster retention on top of contracts coming up for Phillies players could change the landscape quickly.
Although the deal for Luzardo doesn't change anything for the 2026 season, it has a major part in how the Phillies approach their roster in the future. With him getting paid a significant amount more with expected upcoming changes, the Phillies have a lot to consider in 2027 and beyond.