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Where is the Phillies' money going?
by Scott Butler 1/3/17

John Middleton Phillies

Where is the Phillies' money going? It’s a legitimate question and one we will never truly get an answer to, but that answer will be revealing as to just how committed the franchise is to winning. 

The Associated Press released the final 2016 MLB payrolls and the Phillies dropped all the way to the fifth lowest payroll last year. It looks bad – and it does look really bad – for a team that signed a $2.5 billion television deal to spend $20 million less than a team like the Marlins and just a smidgen more than Oakland. I pointed out last week that these are not financial decisions. The Phillies front office is making the best decisions to build a consistent winner.  That said, this slow rebuild could very well be a FANTASTIC financial decision and one that has the owners stuffing wads and wads of million dollar bills in their oversized wallets. And all the while, guys like me don't even question their motives.

Thinking about it makes you realize how nice it must be to own a sports franchise.  Owners do not lose money. They may have down years but they very rarely, if ever, lose money. Players like Howard take heat for under performing on their over inflated contracts - those are considered "bad" contracts. And then when players sign team friendly contracts - as Odubel Herrera just did - the team gets applauded.

There's nothing wrong with that as fans - that is the way we should feel. Howard's contract hurt the chances for the Phillies to succeed, while Herrera's contract might give the Phillies a chance to spend those savings on someone else. Still, somehow the owners always come out ahead.

In the current situation, we have a team that is making smart baseball decisions and it just so happens that these smart baseball decisions earn the owners more green. So how much do the Phillies stand to make off a team that is likely headed towards its fifth straight 89+ loss season?

Let's do a seriously hypothetical exercise to find out. According to the above Associated Press article, five teams spent above the $189 million luxury tax threshold last season. It is reasonable to assume the Phillies should be spending around that mark each season, regardless of how well they are doing in the standings or how many people rotate through the turnstiles at the park.

Given that logic, the Phillies should spend $787 million from 2016 to 2019 if they spent exactly to the luxury tax level each season ($189 in 2016, $195 in 2017, $197 in 2018, and $206 million in 2019).

The Phillies spent $103 million last year and let’s say this year they spend $130 million and then $150 million in 2018 - all reasonable figures considering the youth on the roster- for a total of $383 million. That's $404 million beneath the theoretical $787 million they "should" be spending.

Imagine a payroll of $404 million in 2019. Would the Phillies do that? Of course not. I can't see the Phillies ever spending $86 million over the luxury tax, but we just saw them spend $86 million less than that mark. But that's the whole point.

Having said that, the Phillies have been spending money in ways that don't show up in the public financials. They just bought a new super computer for their analytics, they hired someone from Google as part of an entirely new analytics department, and they just hired former Twins GM Terry Ryan as a scout, who probably did not come cheap. My hope is that John Middleton and company have not been just depositing their winnings in the bank and instead have been going on a secret spending spree that results in the best scouting, the best analytics, and the best baseball minds.

If winning is priority number one, John Middleton can use it to his advantage. Who knows, maybe when we our third straight championship in 2022, he will smile to himself knowing his secret and unselfish spending is what made it all happen. Hey, it's possible. I mean, the Villanova Wildcats are the defending champions and ranked number one in the country.

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