Money, Cash, Pros: A look at the Phillies' finances
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Money, Cash, Pros: A look at the Phillies' finances
David Murphy, Daily News Staff Writer
There is no other pro sport in America in which money and performance are so inextricably linked. So it makes sense that over the last week, we have heard a lot about the Phillies payroll, and how it likely played a role in Cliff Lee heading to Seattle and Roy Halladay arriving in Philly. So as we wait for the Phillies' official announcement of the "Deal of the Century" -- I don't expect the press conference to be held until later this afternoon or early this evening, since Ruben Amaro Jr. and several other key figures are participating in a charity event at Noon -- it makes sense to take a look at exactly where the Phillies stand, both this season and in seasons to come.
I. Keeping up with the Joneses (and Steinbrenners)
RAJ has all but said the Phillies are operating under a hard cap of $140 million. Many fans are incredulous how the Phillies, who have raised ticket prices this season and are coming off two straight World Series, might be limited in the money department. And, truth be told, we don't know exactly how limited they are, or what their definition of "limited" entails. But keep in mind that $140 million is a sizeable amount when compared to the payrolls of other teams in the league.
Tracking payrolls is a difficult task, since the definition of "payroll" varies from source to source. Last year, for example, Major League Baseball's official figures listed the Phillies' Opening Day payroll at just over $113 million. But for official purposes, MLB does not take into consideration salaries that are owed player who are not on the active roster. So salaries for Adam Eaton, Geoff Jenkins and Jim Thome were not included. Similarly, at least according to my understanding, signing bonuses are spread over the life of the contract. So while the Phillies' budget likely factored Raul Ibanez's signing bonus into his 2009 salary, the "official" figure factored it over the life of his contract.
In terms of true expenses, the Phillies' Opening Day payroll was closer to $132 million. Regardless, we'll stick with the official figures when comparing the Phillies, because while we know the Phillies' true salary expenses on Opening Day, we don't have the figures for the other 29 teams.
As it is, the Phillies entered last season with the seventh-highest payroll in the majors:
- Yankees - $201.5
- Mets: $135.8
- Cubs: $135.0
- Red Sox: $122.7
- Tigers: $115.1
- Angels: $113.7
- Phillies: $113.0
- Astros: $103.0
- Dodgers: $100.5
- Mariners: $98.9
So, as you can see, the only team who entered 2009 with a payroll of larger than $140 million was the Yankees. And the Phillies $140 million figure this season will be composed entirely of money being paid to players on the active roster (the one exception potentially being Jamie Moyer, depending on how the fifth starter spot shakes out). Given Boston's signings of John Lackey and Mike Cameron, they seem destined to eclipse $140 million. But the Phillies would appear to have a very good chance at entering the season with the third-largest payroll in the majors. Obviously, there will still be a sizeable gap between them and the Yankees -- certainly sizeable enough to fit Cliff Lee's salary in. But it's hard to label them "cheap," given the fact that 27 other major league teams will likely be spending less this year.
II. The 2010 payroll
Here is how we project the current Opening Day payroll. With Halladay and the recent signing of Ross Gload, the Phillies have $113.205 million guaranteed to 16 players. After that, a decent amount of projecting is involved. For the Phillies' four arbitration-eligible players, we've estimated salaries of $7.0 million for Joe Blanton, $6.5 million for Shane Victorino, $2.0 million for Chad Durbin, and $1.5 million for Carlos Ruiz. In previous post, we've explained how we reached those figures. I'm pretty confident in the first three, give or take $500,000. In a nut shell, Blanton compares to guys like Doug Davis, Erik Bedard, Nate Robertson, and other pitchers with five-plus years of servce and vaguely similar performance, all of whom eventually signed for salaries in the neighborhood of $7 million. Victorino compares roughly with Kevin Youklis, who ended up with $7 million. The one case I haven't looked extensively at is that of Carlos Ruiz, so there is a chance that he ends up getting more. But for now, we'll stick with those figures.
Add in an estimated $500,000 salary for J.A. Happ (that's what Cole Hamels received after his first full season), and $700,000 for Ben Francisco, and we project the Phillies to be on the hook for $131.5 million for 22 players. So that leaves them with $8.5 million to spend on their three open roster spots -- all relievers -- as well as another starter to compete with Moyer and Kyle Kendrick for the fifth spot in the rotation.
As you can see, money is pretty tight, at least when operating under a hard cap of $140 million. The Phillies still must add another bullpen arm that is capable of pitching in the eighth or ninth inning. They reportedly offered Chan Ho Park $3 million for one season. But the market suggests they will likely have to go higher. Consider: Matt Capps, the former Pirates closer whom the Pirates non-tendered, was planning on asking for $3.4 million in arbitration, the Pittsburgh Post-Gazette reported. And Brandon Lyon, who was one of the Phillies targets, received an average annual value of $5 million a year. So deductive reasoning suggests the Phillies will end up paying somewhere between $3.5 and $5 million at the minimum for one of their bullpen pieces, which would leave them between $4.5 and $5.5 million to spend on everything else. I expect one of these slots to filled by a young guy like Antonio Bastardo, who will be making n the neighborhood of $400,000. But that still leaves another reliever - Scott Eyre, one hopeful, made $2 million last season - as well as a starter.
Long story short, the Phillies certainly can use the $2 million they saved by trading Cliff Lee instead of trading or non-tendering Joe Blanton.
Here is the breakdown of the payroll for 2010:
Starters
Roy Halladay - 9
Cole Hamels - 6.65
Jamie Moyer - 8
Joe Blanton - Arb/7
J.A. Happ - .500
GUARANTEED: 3 players, 23.65
PROJECTED: 2 players, 7.50
Regulars
Ryan Howard - 19
Chase Utley - 15
Jimmy Rollins - 7.5
Placido Polanco - 5.5
Shane Victorino - Arb/6.5
Jayson Werth - 7
Raul Ibanez - 11.5
Carlos Ruiz - Arb/1.5
GUARANTEED: 6 players, 65.5
PROJECTED: 2 players, 8.0
Relievers
Brad Lidge - 11.5
J.C. Romero - 4
Ryan Madson - 4.5
Chad Durbin - Arb/2
GUARANTEED: 3 players, 20
PROJECTED: 1 player, 2
Bench
Greg Dobbs - 1.35
Ross Gload - 1
Brian Schneider - 1
Juan Castro - .750
Ben Francisco - .750
GUARANTEED: 4 players, 4.1
PROJECTED: 1 player, .750
TOTAL: 22 players, 131.500
REMAINING: 3 relievers, 1 starter, 8.495
III. The 2011 Payroll
Here is where the long-term thinking behind the Halladay/Lee swap starts to come into play. The Phillies obviously felt they were more likely to sign Halladay to an extension than they were to sign Lee. Now, they have some cost certainty moving forward. Keep in mind they did not have to sign Halladay or Lee. A guy like Javier Vazquez will be available next year. Brandon Webb might be available too, along with Josh Beckett. But the Phillies have long been infatuated with Halladay -- and why wouldn't they be? In addition to being one of the top pitchers in the game, Halladay has shown amazing consistency over the last four years. He has a huge frame. Thus, the thinking goes, he is less succeptible to a breakdown. That said, the Phillies have a huge amount of money tied up for 2011 -- $99.35 million to 10 players -- when they will either have to re-sign Jayson Werth or find somebody to replace him in right field. Shane Victorino will also likely be due another big raise. Jimmy Rollins, J.C. Romero and Juan Castro also have options for 2011. At this point, Rollins is likely to return (His $8.5 million salary is manageable, and the $2.5 million buy-out he would be due is sizeable). So, after this season, the Phillies will need to find a starting right fielder (Francisco could factor in, along, perhaps, with a platoon-mate), two starting pitchers, and a fleet of relievers. Of course, it is virtually fruitless to project anything other than the guaranteed money this far into the future. So here is where it stands:
Starters
Roy Halladay - 20
Cole Hamels - 9.5
J.A. Happ - (Control or Arbitration)
Relievers
Brad Lidge - 11.5
Ryan Madson - 4.5
J.C. Romero - 4.5/.25
Regulars
Jimmy Rollins - 8.5/2.5
Placido Polanco - 5.25
Chase Utley - 15
Ryan Howard - 20
Raul Ibanez - 11.5
Shane Victorino - Arb
Carlos Ruiz - Arb
Bench
Ross Gload - 1.6
Ben Francisco - .600
Brian Schneider - 1.5
Juan Casto - .75/.05
GUARANTEED: 10 players, 99.35 million
UNDER CONTROL: Ruiz, Victorino, Francisco, Happ
IV. The 2012 Payroll
The only players guaranteed money are Halladay, Utley and Placido Polanco. Hamels will be arbitration eligible one last time (the extension he signed runs out a year before free agency), before becoming a free agent after 2012. Ruiz will also be arbitration eligible with free agency looming. Brad Lidge has a $12.5 million option and $1.5 million buy-out. Here is how 2012 looks at this point:
Roy Halladay - 20
Chase Utley - 15
Brad Lidge - 12.5/1.5
Cole Hamels - Arb/9.5
Placido Polanco - 6.25
Carlos Ruiz - Arb (5 yrs of service)
Ben Francisco - Arb (4 yrs of service)
J.A. Happ - Arb (3 yrs of service)
V. And beyond. . .
With a No. 1 starter (Halladay) and No. 2 starter (Hamels) locked up for the next three seasons, the Phillies are in a position that few other teams in the majors can claim. Of course, this is assuming Halladay continues to pitch as he has throughout his career, and that Hamels rediscovers the form he displayed in his first two big league seasons. Having two stud starters atop the rotation is an excellent way to re-build a once power-heavy roster on the fly. Of course, this is where the debate over the merits of the deals come into play. Will Halladay remain dominant? Will Hamels re-discover his swagger? Will trading away guys like Taylor, D'Arnaud, Drabek, Knapp, Taylor, Donald, Carrasco and Marson hamper the Phillies' efforts to surround those two stud pitchers with cost-effective talent? Will guys like Tyson Gillies and Phillippe Aumont, acquired for Lee, prove to be cost-effective major league talent that will off-set the loss of some of the aforementioned Phillies prospects? Will the boost in long-term sustainability that Aumont and Gillies provide off-set the decision not to keep Lee and dramatically increase their chances at winning a World Series in 2010?
None of these questions will be able to be answered until years down the road. One thing is clear: it will be fascinating to watch both the finances and talent of this Phillies organization evolve.
Love Halladay, interested in seeing who else we pick up for bullpen or possible #5 starter, not crying over the exchange of prospects, but still wondering why we couldn't keep Lee @ $9 mil. Halladay, Lee, Hamels, Happ, Blanton would've been formidable in a way no other NL team could match. The saddest words in word or pen...— Ed3- I like the old Jay-z, DMX reference. Did your homies used to call you D-Murph or Murph Dawg?— youpeoplehaveissues
- Hey Evil I think you are confusing what the team is worth and what they make in a season, if the Phillies made a profit of 300 million last year the government would own all the baseball teams(not that funny:I know). It was my understanding that an extra home playoff game can bring in over a million dollars for that game(anyone that can prove disprove please do as that may have been a playoff hockey game). Just for easy numbers 80+ games, a tv deal, parking, & concession -minus overhead and salary and I have no clue what the Phillies made last year or the last 2 for that fact. Of course I think the value of owning a professional franchise is the fringe benefits & in the eventual selling of the team hoping to make a large profit over what you paid for it. Of course these are billionaires so there thoughts are something 99.9% of us will never experience. I think the Phillies did the right thing here, while we never would have known if Lee would have signed here: Halladay wants to be here and now you have Halladay and Hamels for the foreseeable future. The phillies are still cheap but they are getting better and now they are a team that blue chip players want to play for.— phillysportsfan88
- I give the Phillies credit for trying to be fiscally responsible, but I give 'em a slap for trying to plead poverty with a self-imposed salary cap. If they were serious about this 2-3-year window to win another World Series, they would have found a way to get Halliday and keep Lee, even if it meant just renting him for next season. The 1-2-3 puch of Halliday, Lee and a head-screwed-on-straight Cole Hamels would roll through the NL East, do well in the playoffs, and be tough to beat in the WS.I'm not saying the Phillies should spend like the Yankees but considering the TV revenue, merchandising revenue and revenue from a stadium that was sold out about 90 percent of the time, they could spend a little more if the circumstances dictate.— phillyfandc
- phigglesfan75: How did Lee do before his Cy Young year? Let's see: he was 46-24 from 2004-2006, including 18-5 in 2005. Had one down year in 2007, then 22-3 in 2008 and last season 7-9 with Cleveland but 3.12 ERA and 7-4 with Phillies with 3.44 ERA, and 4-0 in postseason, beating the Yankees twice in the World Series. He pitched more than 200 innings four times in the last five seasons. Hamels had two good seasons in three, pitched over 200 innings once, and every Phillies' fan hopes he will return to his 2008 form, but Lee is a stud, so let's not diminish his statistics to make us feel better now that he is gone. Believe me, Halladay would prefer Lee on this staff over Hamels right now, if the choice was between the two of them. Ideally, we would have preferred all three on the staff for 2010.— chuckw
- Glad that Halladay is here. I've read and heard all the points about why Cliff Lee couldn't stay for this season. When I find one that makes sense, I'll let you know. A one year $9M contract for a Cy Young award winner is traded for a bag of donuts. What BS. I've been a Phillies fan for life and won't change now. But this decision is the most short sighted I've ever seen on the part of ownership. To answer Howard Eskin's question from today's radio show, "Are the Phillies doing everything they can to bring a World Series winner to Philadelphia?", in this case, clearly, the answer is NO. OK, I feel better now. Go Phils in 2010.— phlipher
- There's just something that a George Steinbrenner has, a Mark Cuban has that makes these guys more than just mega-successful businessmen. They have it all and their teams could be just another asset in their portfolio just like the phillies are just an asset to the Bucks and Middleton and whoever else owns this team. But they have an overwhelming desire to compete and win in whatever endeavor they get involved with. Even a flawed owner like Daniel Snyder has that fire. Thats the one thing missing from this ownership group. Mark Cuban may be a nut but you can see the fire he has to win at all costs.He could easily rest on his many other accomplishments but they dont. That passion him and the Steinbrenner's have is something that we will unfortunately never see with the Phillies. It will always have to be like 2008. A fortunate span of time where the farm produced many good players in the same era and great luck in picking up other teams castoffs like werth and victorino. Paul Hagen said it best. Dave Montgomery's philosophy is to be a playoff team and hope for a hot streak. it just seems to me that the Phillies should be more than a franchise hoping for lucky breaks. The elite franchises create their good luck by putting their teams in the best position to win it all, not just be competitive.— sjmatt99
- Murph, I think Ruben better give Werth a deal for a couple of years because Howard is going to leave and you put Werth at first and Brown in the outfield.— tarpon11
Wonder if the Phillies would like to have the chance to reconsider the seating capacity on CBP. Another 5 to 10 thousand seats might look nice now. Looks like they either have to move a big contract in the next two years or they have to be able to add to the payroll each year.— TennPhan- phlipher: you were doing so well until you mentioned that cosmic nitwit Eskin.— chuckw
- How often does ANY CLUB get the opportunity to have two of the most proven top of the line pitchers on your team---NOT OFTEN--PROVEN--LEE & ROY---and OUR PHIL'S WHO LEAD THE MAJORS IN SELL OUTS COULD NOT IMAGINE THEMSELVES IN SUCH A CAT BIRD SEAT--LEE WAS rented FOR HALF A SEASON --THEY COULD NOT COUGH UP for one MORE season 9 mil--that's a bargain compared to his market value today --in fact its a ridiculously low number for what he can bring YOUR STAFF IN 2010---IF YOU RENTED HIM FOR HALF A SEASON PLEASE SPARE ME THE RHETORIC OR HISTRIONICS ABOUT NOT ABLE TO RENT HIM FOR A FULL YEAR- --STOP WITH THIS CANARD PAYROLL STUFF---THIS UNIQUE SITUATION DEMANDED AN EXCEPTION --you had the pair in your grasp--PS PITCHING WINS THE WORLD SERIES...— carmen2
- JeffR ... You do understand that Drabek and Taylor might never be productive big leaguers, don't you? Or, they might not be productive big leaguers until three or four or five years from now, well after the championship nucleus has aged out or been broken up. And you do understand that Lackey is not anywhere near the equivalent of Roy Halladay, right? Lackey has made exactly one all star team in his career & has won more than 14 games in a season one time. (Six all star teams & six times with more than 14 wins for Halladay, despite not playing on a perrenial contender the way Lackey does.) Thank goodness Rube is the GM & not you.— GoPhilsGo
- sjmatt99: You are the man!!! That post about Steinbrenner and Cuban versus Montgomery and the Teflonics as Conlin called them is right on the money.— chuckw
- One more rant before I leave this dead-soul, zombie infested corporate office. Before anyone starts accusing the fans who are dissapointed in this whole Cliff Lee thing of being just the typical negative fans, check out the various sportswriters on yahoo, espn, csnphilly, all accross the board. There is general surprise that the phils wouldnt take this rare opening to go for it all for the price of 1 year of extending your budget for $9 million. I guess those are the expectations when your team plays to 102 % capacity, just behind the Bosox and you sell merchandise out the wahoo. Come on Middleton. Didnt you sell your cigar company for over $3 billion??? Weren't you seen at Yankee stadium during the world series sitting with all the VIP's?? Take the bull by the horns and go for it and be the envy of all your blue-blooded, old-money cronies. Its not like you'll have to trade in your fleet of Bentleys. Bah humbug!!!— sjmatt99
- sjmatt99: you are unfair to Middleton: $3 billion buys so much less these days. By the way, Amaro artfully dodged the question asked him at the press conference as to why he needed to trade Lee on the exact same day he signed Halladay, since they were totally different transactions. Also, not one person at the press conference mentioned the elephant in the room: Pat Gillick!! We will all love Halladay, but Lee was much less of a Baseball decision, Amaro notwithstanding, and much more of a financial decision. Nobody denies that spending tons of money does not necessarily buy championships (see Steinbrenner and the Mets), but in Baseball it guarantees, in the vast majority of instances, a seat at the playoff table. Contrary to some posters and Daily News Live, going all in can be repeated for more than one year. Just as an aside, my colleague and I spent more than $8,000 for our two season tickets last year, so I went over my budget and I don't get money from parking and concessions or from Comcast (to whom I pay plenty for cable and internet)!!!!— chuckw
