Do the Phillies Have Payroll Space to Afford A.J. Burnett?

Yesterday, Travis Sawchik of the Pittsburgh Tribune-Review reported that starter A.J. Burnett, who had been mulling retirement, decided to make his services available for at least one more season. Obviously, the Pirates are interested in bringing him back, but the Orioles and Rangers are two other teams expected to show interest. The Phillies, with a mediocre starting rotation beyond Cliff Lee and Cole Hamels, could also decide to pursue the right-hander on a short-term deal. Sawchik reported that they have interest.

The big question is: do the Phillies have the payroll space below the $189 million luxury tax threshold to fit Burnett? Let’s take a look at the payroll for the 17 players already prescribed salaries. Note that the average annual value of multi-year contracts is used towards the luxury tax.

Player Years Total $ AAV
Ryan Howard 6 $ 143,000,000 $ 23,833,333
Cliff Lee 5 $ 120,000,000 $ 24,000,000
Cole Hamels 6 $ 144,000,000 $ 24,000,000
Chase Utley 2 $ 27,000,000 $ 13,500,000
Jonathan Papelbon 4 $ 50,000,000 $ 12,500,000
Jimmy Rollins 4 $ 38,000,000 $ 9,500,000
Carlos Ruiz 3 $ 26,000,000 $ 8,666,667
Marlon Byrd 2 $ 16,000,000 $ 8,000,000
Kyle Kendrick 1 $ 7,675,000 $ 7,675,000
Mike Adams 2 $ 12,000,000 $ 6,000,000
Roberto Hernandez 1 $ 4,500,000 $ 4,500,000
Miguel Alfredo Gonzalez 3 $ 12,000,000 $ 4,000,000
Antonio Bastardo 1 $ 2,000,000 $ 2,000,000
Ben Revere 1 $ 1,950,000 $ 1,950,000
John Mayberry 1 $ 1,587,500 $ 1,587,500
Wil Nieves 1 $ 1,125,000 $ 1,125,000
Kevin Frandsen 1 $ 900,000 $ 900,000
TOTAL $ 153,737,500

Players like Domonic Brown, Cody Asche, Darin Ruf, Freddy Galvis, Cesar Hernandez, Jake Diekman, Jonathan Pettibone, Justin De Fratus, Brad Lincoln, and others are pre-arbitration. Their salaries will be figured out soon, but will likely be in the $500,000-$550,000 range. Their salary will be prorated for the time they spend on the Major League roster. Also note that if Bobby Abreu makes the roster, he’ll make $800,000. The Phillies used over 50 combined pitchers and position players last season so the cost of role players adds up faster than you’d expect, even if it is prorated. At the very least, they’re paying at least $4 million for the remaining eight spots which will be filled by pre-arb. players. In all likelihood, they’ll pay between $6-8 million depending on how often they’ll have to call players up and down. So we’re at about $160 million.

As per the latest Collective Bargaining Agreement, the Phillies will also pay their share, 1/30, of player-benefit costs. As Wendy Thurm explained at FanGraphs, this includes “things like contributions to the pension plan, workers compensation premiums, spring training allowances, moving expenses and player medical costs”. Last year, a 1/30 share was valued just under $11 million. It should be slightly higher this year but we’ll roll with $11 million. We’re around $170 million, less than $20 million shy of the luxury tax threshold.

Could the Phillies get Burnett for an average annual value of $15-20 million? Although he did not receive a $14.1 million qualifying offer from the Pirates, he earned $16.5 million last season and although he was a flip of a coin away from retirement, he is coming off of a season in which he posted a 3.39 ERA in 191 innings at the age of 36. And, don’t forget, the Phillies will be bidding against at least two other teams, maybe more. It’ll be tough to get him closer to the $15 million or less range. More would hamstring the Phillies from making minor additions during the season, particularly near the trade deadline.

The Phillies could free up some space by cutting Mayberry during spring training. He and the Phillies agreed on a $1.5875 million salary to avoid arbitration. It, like the scores of others earned in a similar fashion recently, is not guaranteed. If the Phillies cut him, they would only owe him either 30 or 45 days’ pay, depending on when the decision is made. But that’s about the only payroll flexibility the Phillies could create. They would have to be able to grab Burnett at about $15 million on a one-year deal, otherwise they likely don’t have the space. Moreover, Amaro has stated he plans to stay closer to last year’s Opening Day payroll of $160 million than the $189 threshold.

Leave a Reply

*

33 comments

  1. Bubba0101

    January 29, 2014 09:34 AM

    They need to stay away from him. Keep the payroll flexibility if, for some miracle, they are in contention at the deadline. He’s a head case and not much of an upgrade so that he would make us a playoff team.

    • Phillie697

      January 29, 2014 12:47 PM

      See hk’s comment below. If by some miracle we are in contention, I’m pretty sure going over the luxury tax threshold wouldn’t be much of an issue.

      • Bubba0101

        January 29, 2014 03:56 PM

        It will be an issue because the front office will not go over the luxury tax. As much as they tried to spend like the yankees in 2009-2012, they would not go over the luxury tax. It makes no sense for them to do it because they arent competing for a WS this year and itll only hinder their spending abilities in the future.

    • Brian Schwartz

      February 04, 2014 01:24 PM

      You do realize the starters outside of hamels and lee are mag, kendrick, pettibone, who knows what. To say Burnett wouldn’t be an upgrade is absurd.

  2. hk

    January 29, 2014 10:23 AM

    Why do we speak of the luxury tax limit as if it’s a hard cap? If the Phillies sign Burnett and get right to the limit and Burnett helps them into contention in mid to late July, the tax on every dollar by which the Phillies exceed the tax is only 17.5% (of the overage). If they add a player with a $15M salary at July 31, the prorated portion of that player’s salary would put them over the limit by ~$5M, which would cost them an additional $875K.

    • Bill Baer

      January 29, 2014 10:27 AM

      The penalty increases for consecutive years gone over. So while it might be nice to go a little over now, it might cost you more next year when signing a FA will really help and you’re right at the threshold.

      • hk

        January 29, 2014 10:46 AM

        I am aware that it increases if you are over in consecutive years. However, next year they will have Mayberry, Kendrick, Adams, Roberto Hernandez and possibly Rollins coming off the books plus Burnett if they sign him to a one year deal. If they sign Burnett and are in contention in June with the ability to pick up some salary for the stretch run, I would hope that they would do so and then worry about next year, next year. Plus, even at a rate of 30% on the overage, if they are at ~$194M, we are only talking about paying ~$1.5M.

    • pedro3131

      January 29, 2014 10:54 AM

      Is AJ Burnett going to get us into contention? Is he going to take us from a low 70s win team to a high 80s one?

      • hk

        January 29, 2014 10:59 AM

        Pedro,

        That depends upon how many wins you (or the front office) project for this team. As Bill mentions in his prior post, random variation can add upwards of ten wins to a team’s projected won-lost record. Therefore, if you project them to be a 77 win team without Burnett and an 80 win team with him, it’s worth the money to find out. It only costs money to sign him – not money and a draft choice – and if random variation does not work in the team’s favor, they may be able to trade Burnett at the deadline. On the other hand, if you project them to be a 70 win team without Burnett and a 73 win team with him, it’s probably not worth spending the money.

      • Josh G

        January 29, 2014 11:21 AM

        Id like to reiterate what hk mentioned – if the Phils are not in contention another team WILL want to trade for him and it is common knowledge that we could use some A or AA talent

  3. Ryan Sommers

    January 29, 2014 10:53 AM

    Player benefit costs contribute to the luxury tax liability? that;s socialest

    • CJ

      January 29, 2014 12:15 PM

      Ha. Professional sports leagues themselves are socialist. Works well. In sports.

      • sweatingisnormal

        January 29, 2014 02:45 PM

        Let’s not confuse monopolies with socialism…

    • Phillie697

      January 29, 2014 12:49 PM

      A luxury tax or a salary cap isn’t socialist? :P

  4. nik

    January 29, 2014 10:56 AM

    Phillies need to flaunt some of that Comcast money. Would be a great good will gesture to the fans and who knows, they might even be somewhat competitive.

  5. Joecatz

    January 29, 2014 12:16 PM

    I don’t think this is a luxury tax issue as much as it is a decision to go for it now with Burnett or hold on to the eggs till midseason. Every move they’ve made so far was made with the idea of playing to win with everyone healthy till the deadline and reassessing. If they sign Burnett they have no space to avoid the cap at the deadline.

    • Chris S.

      January 29, 2014 12:37 PM

      Yeah, but if the Phillies are out of the race with Burnett it is a potential trading chip for the Phillies. I say go for it because I think the Phillies will be out of it, but if they manage to stay in the race Burnett would be a nice 3rd starter to have down the stretch. If they fall out of the race what they get back for Burnett would probably be better than who they would pick with their second pick in this years draft.

      • Joecatz

        January 29, 2014 01:29 PM

        That’s assuming Burnett isn’t smart enough to insist on a no trade which he would insist on

      • hk

        February 01, 2014 07:38 AM

        Chris S.,

        The Pirates did not make Burnett a qualifying offer, so the Phillies would not lose their 2nd round pick to sign him. All that he would cost is money.

  6. Josh Stein

    January 29, 2014 12:54 PM

    It looks like the Phillies are close to getting rid of paps so that’s an extra 2-4 million off the books

  7. Andrew Cleveland Alexander

    January 29, 2014 05:24 PM

    Another way the Phillies could create a bit more wiggle room would be to sign Burnett and then trade Kendrick. That would deduct $7.6 million worth of payroll, while perhaps bringing back a midlevel prospect or a bullpen piece or something. Yes, the move would be zero-sum in terms of depth, but you’d be swapping in a true #3 starter for a swingman/#5 type who is being thrust into the #3 role by default. Then you’d still slot in the Former Fausto for #4 and have a competition among Gaudin, Pettibone and MAG for the #5 slot, with Biddle waiting in the wings at AAA.

  8. Larry

    January 29, 2014 08:58 PM

    Well he’s a ground ball pitcher in CBP. I think there is potential especially in this division. It’s just a one season contract, I think I would go for it. Looks like HK did the mathematical research and it seems like a viable option. I’m not sure what else they can do at this point for 2014 FA. Most of the wanted players have been signed.

    He’s 37 years old. I think he’s old enough to join this aging group of veterans for a short term deal…..He’s been very durable actually. I think I see an upside for just 1 season.

  9. crow

    January 30, 2014 09:02 AM

    Howard’s AAV is effectively 6yrs/143 because he signed his extension with a full year remaining on his previous contract. So $23,833,333

    • crow

      January 30, 2014 10:06 AM

      I think you’ll find, as well, that Rollins’ AAV is $9.5M because he has a player option of $5M for his 4th year if the vesting option terms aren’t met. That makes his contract effectively 4/38 for AAV purposes.

      • Bill Baer

        January 31, 2014 03:18 AM

        Thanks, Crow. Didn’t know that player options counted in the calculations. Edited the post.

  10. Phil Auxt

    January 30, 2014 09:58 AM

    The Phillies have to try something new. They have the talent. It’s just not working. Burnett could be a blessing.

  11. Mark66

    January 30, 2014 03:23 PM

    Given how poorly the front office has chosen players in recent years a one year deal with Burnett would be a good gamble if their is nothing wrong with his health, arm. When you see how other teams have spent MONEY in recent years, the Phils have spent MONEY very poorly.

  12. jim

    January 31, 2014 05:44 PM

    Sign him. If the old timers stay healthy he at least could help. If not then we wasted money once again. But, it’s not our money so who cares. I doubt we get 190 innings from anybody else we try to throw out there.

  13. Rocky

    February 06, 2014 09:04 AM

    Everyone is talking as if this would be a one year deal. I’m assuming Burnett will want at least two years, and possibly pull an Arroyo and ask for a third season Or we could see a two-year deal with a fairly easy 3rd year vesting option or large buyout.. We’ve seen Amaro overpay in years before (see Ruiz, Carlos as the most recent example).

Next ArticleScouting Notes from Nine Baseball's MLK Invitational