Phillies Could Face Luxury Tax With Deadline Moves

Much has been written about the Phillies' need for offense, especially if Chase Utley doesn't return to form when he returns from the disabled list.  While fans expect the Phils to pick up another bat (be they role players or perhaps even a star like Hunter Pence), the club could face a stiff financial penalty with a major addition. 

Jim Salisbury of CSNPhilly.com notes that Philadelphia may be forced to pay the Competitive Balance Tax for the first time, which would happen if the Phillies' season-ending payroll (counting bonuses, incentive clauses, etc.) reaches the $178MM plateau.  As it stands, Salisbury calculates the Phillies currently have a $175MM payroll.  Cot's Baseball Contracts has a $165MM payroll figure for the Phils, but Salisbury notes that the $11MM the Phillies received from the Astros in the Roy Oswalt trade doesn't count for luxury tax purposes.

Only four teams have had to pay the luxury tax  — the Angels (2004), Tigers (2008), Red Sox (2004-07, and last season) and Yankees, who have paid every season since the CBT was instituted in 2003.  Teams are taxed 22.5% for every dollar they spent past $178MM, so the fine isn't a light one.  The Yankees paid $18MM in luxury tax last season for surpassing the 2010 CBT threshold of $170MM.

Philadelphia GM Ruben Amaro said he "doesn't know" if he has payroll flexibility to make a deadline move that would put the Phils in position to pay the CBT.  As Salisbury notes, it will be hard for the Phils to find a taker for such big contracts as Raul Ibanez or Joe Blanton, and while someone like Jimmy Rollins (a free agent after this season) would draw interest, moving Rollins would create another hole in the club's lineup. 

If I had to guess, though, I'd say the Phillies have enough already invested in this season as a World Series-or-bust campaign that if they have the chance to acquire a talent like Pence, they'll make that move and worry about the financial consequences in the winter.  Winning a championship would definitely take the sting out of an offseason luxury tax payment. 


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