Analyzing Phillies' Payroll and Who Needs to Go to Fit Cole Hamels' Huge Deal

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Analyzing Phillies' Payroll and Who Needs to Go to Fit Cole Hamels' Huge Deal
Rich Schultz/Getty Images

The Philadelphia Phillies had every excuse to go into a fire-sale mode at the trade deadline. If they had, the first player to go would have been star lefty Cole Hamels, who was a free-agent-to-be.

Instead, the Phillies decided to keep Hamels around. 

For another six years. Possibly seven.

As reported by Bob Nightengale of USA Today, the Phillies have locked Hamels up to a six-year extension worth $144 million. His new deal also includes a vesting option for a seventh year that could make his deal worth over $160 million.

This is one of the largest contracts in the history of baseball and the second-largest contract ever given to a pitcher behind New York Yankees ace CC Sabathia. It is certainly the largest contract ever given out by the Phillies.

And this, naturally, makes things complicated.

Even before the Phillies locked Hamels up, there was some chatter about what they were going to have to do with their payroll in order to accommodate a new deal for Hamels. If they did manage to extend him, the thinking was that the Phillies were going to have to make a move to shed payroll.

Phillies general manager Ruben Amaro, Jr., told SiriusXM radio's Jim Bowden that he doesn't think this is the case:

Tricky. He doesn't think the team has gotten itself into a mess financially, but he also indicated that the team is willing to trade players. Kinda leaves things open to interpretation.

We can start by interpreting what kind of financial obligations the organization is going to have on its hands in 2013. This table, which uses information from Baseball-Reference.com, should help:

Player 2013 Salary Signed Through
Cliff Lee $25M 2015, with vesting option for 2016
Cole Hamels $24M* 2018, with vesting option for 2019
Ryan Howard $20M 2016, with team option for 2017
Roy Halladay $20M 2013, with vesting option for 2014
Chase Utley $15M 2013
Jonathan Papelbon $13M 2015, with vesting option for 2016
Jimmy Rollins $11M 2014, with vesting option for 2015

*This is assuming that Hamels' deal is structured similarly to Lee's, a notion proposed by Matt Gelb of the Philadelphia Inquirer.

So in 2013, the Phillies are on the books to pay a grand total of $128 million to just seven different players. 

Not included in this discussion is the team's $5.5 million mutual option for Placido Polanco or the club's $5 million team option for Carlos Ruiz. In addition, Hunter Pence is headed for arbitration, and he could earn a payday of around $15 million.

If the Phillies keep the three of them around, they'll be dishing out over $150 million to just 10 different players.

This is significant because of where the luxury tax threshold is going to be at in 2013. Per MLB.com, the new collective bargaining agreement that was signed in November raised the luxury tax cutoff to $189 million in 2013, 2014 and 2016.

No team wants to have to pay the luxury tax. Even the New York Yankees are sick of having to do so. The Phillies don't want to put themselves in a position where they have to pay it, much less in a position where they have to keep paying it year after year. The price goes up for repeat offenders.

If the Phillies commit $150 million to 10 different players in 2013, they're going to have very little financial wiggle room when they sit down to fill out the rest of their roster. Their payroll is at right around $175 million this year. There's a chance it could be closer to $200 million in 2013.

Jeff Zelevansky/Getty Images
Ruben Amaro's problems are just beginning.

Unless, of course, the Phillies do something about it. And whether Amaro wants to admit it or not, that means jettisoning payroll via trades.

One of the team's most expensive players is going to have to go. The problematic part for the Phillies is that they don't have a ton of options in that regard.

Hamels obviously isn't going anywhere. Trading Halladay is out of the question, and it would be tricky anyway seeing as how his value is hurt by the injury he suffered this year and the short amount of time remaining on his contract. Nobody's trading for Utley or Howard given their recent health woes. The Phillies are not going to get good value for Papelbon.

This leaves the Phillies with three dealable assets among their most expensive players: Lee, Rollins and Pence.

It just so happens that there are plenty of rumors surrounding these three players.

Ken Rosenthal of FoxSports.com recently reported that the Phillies are "eager" to move Pence, in large part because they realize he's going to make well over $10 million in arbitration this winter. ESPN's Jayson Stark, however, has reported that the Phillies aren't going to just give Pence away to save money. They want "young, big league-ready" players for him, and they have very specific demands about what kind of youngsters it would take to get Pence.

That's a lot to task for a guy who is only under club control for one more season. Pence has value out on the trade market, but not as much as the Phillies apparently think he does. They'd have to settle for less than what they want if they decide to trade Pence.

Rollins, meanwhile, has even less value out on the trade market.

Victor Decolongon/Getty Images
Rollins has picked it up at the plate recently, but he's still hard to move because he's old and expensive.

Jon Heyman of CBSSports.com has reported that the Los Angeles Dodgers were interested, but they can probably be checked off the list now that they've acquired Hanley Ramirez. That's a blow for the Phillies because the Dodgers could have picked up the rest of Rollins' contract, as they did with Ramirez.

If the Phillies move Rollins, they'll probably have to eat the bulk of his contract. 

For example, they'd have to do that if they were to trade him to the Oakland A's, who Danny Knobler of CBSSports.com has reported have considered Rollins.

Eating money would kinda defeat the purpose. The Phillies need to clear money, not pay it.

So this leaves Lee, and you probably know where the discussion is going from here.

Stark noted in his report that the Phillies have talked about trading Lee, and they haven't even bothered to discourage other teams from checking in on him. 

And this makes perfect sense. The perception is that Lee has pitched poorly this season, but he hasn't pitched as poorly as Phillies fans think he has. His 3.95 ERA is still above average, and Lee's 3.40 FIP (per FanGraphs) suggests that he's been a victim of bad luck. So does his .319 BABIP.

Drew Hallowell/Getty Images
Lee ranks third in baseball with a K/BB of 4.87.

In other words, Lee is still a good pitcher. The fact that he's under contract through 2015 with a vesting option for 2016 only bolsters his value. Whoever trades for him won't be getting a rental. They'll be getting an ace who will be around for at least another three years. 

The list of teams that can afford to take on Lee is small, but one team that must be counted as a legit possibility, according to Ken Rosenthal and many others, is the Texas Rangers. They have the prospects to acquire Lee and the funds to afford him. They can always make it easy on themselves by choosing not to re-sign Josh Hamilton.

The beauty of trading Lee is that the Phillies will still be able to clear a significant amount of payroll even if they're forced to eat some of Lee's contract. They'd still be limited to a select number of trade partners even if they do eat some of Lee's contract, but trading him is by no means impossible because of how desirable Lee is. He's nowhere near being in the same boat as immovable players like Alfonso Soriano and Barry Zito.

Aside from them not telling teams to buzz off when they call about Lee, there's been little indication that the Phillies are actually interested in trading Lee. They seem more interested in moving Pence and/or Rollins, not to mention free-agent-to-be Shane Victorino.

But remember, it hasn't even been 24 hours since Hamels agreed to his extension. The Phillies haven't had much time to solidify their plans regarding the 2013 season. And though they're in no hurry to trade Lee, Rosenthal and Jon Paul Morosi of FoxSports.com have heard that rival teams think it's just a matter of time before the Phillies come to grips with the reality of the situation.

Give them some time. All we know for now is that they're far from finished making moves.

 

If you want to talk baseball, hit me up on Twitter.

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