Saturday, December 20, 2014

Phillies nearing self-imposed payroll limit

The Phillies won 73 games in 2013 with baseball's fifth-highest payroll, according to figures obtained by The Associated Press. That has created a new dynamic in a city not accustomed to seeing its baseball team spend; fans are not satisfied with a huge payroll.

Phillies nearing self-imposed payroll limit

Phillies general manager Ruben Amaro Jr. (Carlos Osorio/AP)
Phillies general manager Ruben Amaro Jr. (Carlos Osorio/AP)

The Phillies won 73 games in 2013 with baseball's fifth-highest payroll, according to figures obtained by The Associated Press. That has created a new dynamic in a city not accustomed to seeing its baseball team spend; fans are not satisfied with a huge payroll.

It is all relative, of course. A decade ago, the idea of the Phillies owning the fifth-highest payroll in Major League Baseball was a crazy one. They have spent with the highest bidders in the last half decade. But those bloated contracts are weighing down performance. The Phillies say it has affected their ability to spend.

These are the Phillies' payrolls in the last five seasons, according to internal figures leaked to The AP (MLB rankings in parenthesis):

2013: $168,569,538 (5th)
2012: $174,523,432 (4th)
2011: $165,313,989 (3d)
2010: $145,539,931 (3d)
2009: $138,286,499 (10th)

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Phillies general manager Ruben Amaro Jr. said the team will maintain a similar payroll in 2014 to last season's. That means there is little left to spend. The Phillies have committed $141.7 million in average annual value (AAV) salaries to 13 players. They have four arbitration players to pay, although those contracts are not guaranteed until opening day. Figure another $12 million is required to sign those players.

That's 17 players at $153.7 million. The rest of the roster is filled by those making at or near the league minimum of $500,000. So another $4 million or so there. That takes the payroll to $157.7 million.

Remember, this not straight salary calculations. It is, in fact, complicated arithmetic. That is why any projections are difficult to make. Payroll is highly dependent on injuries (the more you have, the higher your payroll) and in-season maneuvers.

The collective bargaining agreement recognizes "payroll" for 40-man rosters as "the average annual values of contracts and $10,799,590 per club for benefits and extended benefits, which include items such as health and pension benefits; club medical costs; insurance; workman's compensation, payroll, unemployment and Social Security taxes; spring training allowances; meal and tip money; All-Star game expenses; travel and moving expenses; postseason pay; and college scholarships."

So add another $10.8 million to any payroll figure. That puts this current projection at $168.5 million, or right around what the Phillies spent in 2013. This does not include costs for the 40-man roster, potential call-ups, or performance incentives. But, mostly, it offers a rough picture that puts the Phillies at or near their self-imposed expenditures limit.

The luxury-tax threshold increases in 2014 from $178 million to $189 million. So that is not a factor, even if the Phillies were to invest more in their payroll. The Phillies drew 553,315 fewer people to Citizens Bank Park in 2013. That was the second-worst decline in baseball. Perhaps they are budgeting for a further drop in attendance this season.

But, as Forbes reported Tuesday, Major League Baseball surpassed $8 billion in revenue for the first time ever. Teams have never been more profitable. New national TV contracts awarded all clubs an additional $24 million in 2014 without lifting a finger. And the Phillies are negotiating their next TV rights windfall with Comcast SportsNet.

"We should be contending with this kind of payroll, at $165 or $170 million," Amaro said last week.


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