Philadelphia Phillies: Why Addition by Subtraction Could Work
The Philadelphia Phillies are about to be in an unfamiliar spot.
Well, besides their last-place standing in the National League East.
Although they have signed Cole Hamels to a new six-year contract extension, the Phillies are not likely to acquire a big-name player before the trade deadline in preparation for a postseason run, as they have in recent seasons.
Instead, the Phillies could be on the other end of those deadline deals by trading away players rather than acquiring them. However, they can still make a few trades that allow them to make a run at the postseason.
They wouldn’t be the first team to bounce back from a double-digit deficit in the standings to make the playoffs.
But what’s more important are the players—and contracts—that the Phillies trade in the process.
Despite potentially trading their center fielder, right fielder, a starting pitcher, third baseman and an additional player or two, the Phillies could actually put themselves in a better position for future seasons.
Addition by subtraction could work for the Phillies.
For one, this season’s All-Star Futures Game featured more former Phillies minor league players than it did current minor league players.
Recent trades have left the Phillies without a great deal of soon-to-be-ready minor league prospects. However, this season’s trade deadline could provide the opportunity to make trades for minor league talent rather than trading it away.
Trades involving players such as Shane Victorino, Joe Blanton, Ty Wigginton, Juan Pierre, Placido Polanco and Hunter Pence could add multiple prospects to the Phillies' minor league system.
Of course, the talent level of the prospects that the Phillies would get in return varies from player to player.
Trading a combination of any of these players would also give the Phillies more financial flexibility with an ever-increasing payroll.
With Hamels now in the fold, the Phillies are set to pay nine players over $130 million next season, which leaves less than $50 million to complete the rest of the 25-man roster before the team would be hit with the luxury tax next season.
The team’s current payroll is likely already over the luxury tax threshold.
Subtracting two of the three contracts of Victorino, Blanton and Polanco, as a recent article by Matt Gelb on philly.com explained, could save the Phillies approximately $6 million.
That amount could push the Phillies payroll below the luxury tax threshold, which means the team would avoid paying the 20 percent tax this season and not be at risk for paying the 30 percent tax next season.
As Gelb’s article also explains, a team who exceeds the threshold for the first time next season would only have to pay a 17.5 percent tax. If a team can get below the threshold for the following season, they will be treated as first-time offenders the next time they exceed the threshold.
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Therefore, by subtracting a few contracts this season, the Phillies will set themselves up to possibly allow their payroll to exceed $178 million next season while paying a lesser tax.
By 2014, the luxury tax threshold increases to $189 million. This means that the Phillies could pay the tax next season, but if their payroll is less than $189 million the following the season, they would not have to pay the tax for a second year in a row.
If the Phillies can get their payroll below $178 million this season, they might be more willing to go over that mark next season.
Potential free agents such as Michael Bourn, Melky Cabrera, Grant Balfour and Brandon Lyon could then become options.
Subtracting a few contracts from the team’s payroll this season will allow the Phillies to add more talent for next season with more room for spending.
And soon after the luxury tax threshold increases to $189 million in 2014, the Phillies should be preparing to sign a new television contract, according to another article by Matt Gelb that appeared on philly.com prior to the start of the season.
The deal will at least allow the Phillies to spend as much as the new luxury tax threshold after 2015 if they so choose.
But what about for next season?
If the Phillies are able to move certain contracts this season, they will have more money to spend in the offseason to fill a number of needs.
Third base, the outfield and the bullpen are all areas that could need either replacements or improvements. Carlos Ruiz and Pence are also set to receive pay increases on a roster that already has over $100 million going to just nine players.
With a lack of major league-ready prospects at positions of need—and hardly any room to work with if the team wants to avoid the luxury tax—the Phillies' best chances of adding for the future must come by subtracting from the current roster.
The past few seasons have seen the Phillies use an addition by subtraction method at the deadline, with big-game acquisitions being added and prospects being subtracted from the minor league system.
However, this season could be a good time for the team to reverse this method in their mid-season dealings.
If the Phillies find the right deals, addition by subtraction just might work.
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