Report: Phillies, Comcast SportsNet reach agreement on TV deal
David Murphy of the Philadelphia Daily News is reporting that the Phillies and Comcast SportsNet have reached an agreement on a TV deal. Details including financials and duration have not been released yet, but rumors indicate the deal is for 20 to 25 years for a “massive” amount of money. Matt Gelb of the Philadelphia Inquirer suggests it is worth “billions“.
The contract will begin following the end of the 2015 season, when the Phillies’ current TV deal expires.
Following the sale of the Dodgers to the Magic Johnson Group and with their massive TV deal on the horizon, the Dodgers traded with the Red Sox to acquire Carl Crawford, Adrian Gonzalez, and Josh Beckett, taking on roughly $270 million worth of salary in the process. The Dodgers opened up 2012 with a $105 million payroll, but more than doubled that to begin 2013 at nearly $217 million. They added roughly $20 million more during the season, finishing at $237 million.
That is one example of the kind of financial flexibility that the Phillies could have in the coming years. Of course, they will be mindful of the luxury tax threshold, which will be at $189 million through 2016. If the Phillies exceed $189 million, they will be charged a penalty, which goes to “potential refunds”, player benefits, and the Industry Growth Fund. This past season, the Yankees and Dodgers were the only teams to exceed the luxury tax threshold. Per ESPN, the Yankees were penalized over $28 million (penalties escalate for consecutive infractions: 17.5% the first year, 30% for a second consecutive year, 40% for a third consecutive year, 50% for a fourth year or longer) while the Dodgers were penalized $11.4 million.
With the new deal, the Phillies will feel only a minor pinch, as the Yankees and Dodgers have felt, should they decide to exceed the luxury tax threshold. Still, they will want to show discretion with their spending nonetheless. Right now, they can confidently get involved in the bidding for Japanese pitcher Masahiro Tanaka. In order to sign Tanaka, the Phillies would need to first relinquish $20 million for a posting fee (per the new agreement between MLB and Nippon Professional Baseball) given to the Rakuten Golden Eagles, then pony up the requisite money to sign the free agent himself. Rumors have a potential deal at six years and in excess of $100 million. Yu Darvish signed for six years and $56 million with the Rangers in January 2012 but the Rangers also paid a $52 million posting fee. That deal was also inked before the influx of money from the national TV deal, a portion of which gets divvied up among all 30 MLB teams.
The Phillies could also become big players in the free agent market next year. Among the players they could potentially be interested in include shortstops Asdrubal Cabrera and Hanley Ramirez if they don’t sign an extension with their current teams (Indians and Dodgers, respectively), as well as outfielders Brett Gardner and Colby Rasmus, and starters Jon Lester, Justin Masterson, and James Shields. They could also offer salary relief to teams as the Dodgers did with the Red Sox, but it remains to be seen which opportunities will present themselves.
The new TV deal won’t affect their 2014 season very much. The Phillies have already finished a majority of their business, though they could still make one more big signing (it would almost certainly have to be Tanaka, as the top free agents remaining are tied to draft pick compensation, so the Phillies would have to give up a second-round pick). There is no amount of spending the Phillies could do between now and the start of the season that would make them legitimate contenders in the NL East in 2014. The most likely scenario is that the Phillies finish with with a bottom-ten record once again, giving them a protected pick in the 2015 draft. That would give them the flexibility to spend freely on big name free agents and put together a competitive roster.
One more draft pick early in the first round along with continued development of their Minor League system, plus a new cavalcade of free agents thanks to the new TV deal, sets them up well to consistently compete in 2015 and beyond.