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  • Writer's pictureSteve Potter

11/13/2020 : The 2021 Player Payroll

According to Spotrac the Phillies actual outlay of player salaries in 2020 approximated

$81 million due to the shortened season. That would have equated to $208 million in a full season. For luxury tax purposes the total was $203 million ( Cots Contracts site also approximates that number ) which would put them below the luxury tax penalty threshold of $208 million ... if accurate then no penalty incurred.

Without fan attendance it’s true that significant projected revenue streams were lost ... what the actual 2020 revenues/expenses that were incurred after factoring in TV/Radio revenue, other cash receipts and expenses amounted to we will likely never know ... nor should we. The Phillies reportedly did continue to pay all employees at least thru the end of October. They’ve also reportedly offered an enhanced severance/retirement package to employees that will allow them to capitalize the costs for those that accept the deal and amortize the expenses over future periods. The deferral of such expenses will work as an accounting offset against anticipated future revenues.

All that being said ... across all of baseball it’s expected that 2021 spending will be reduced given the ongoing pandemic and the associated uncertainty of fan attendance ... even partial attendance for spring training games at this point are doubtful.

From my perspective I think the team will reduce player payroll by 10 to 15 % ... they are more apt to rely on younger, less expensive players than the recent trend of being aggressive off season spenders. I suspect that a 2021 payroll limit has been set at a base rate of somewhere in the neighborhood of $170 to $180 million. At present the current projected 2021 base payroll is about $125 million covering 12 contracts ( includes Arb estimates for five players ) . That leaves 28 roster spots to fill. If we assume the budget is set for $180 million then there is $55 million left to spend on those remaining spots.

To me it would be the immediate year’s cash outlay that is the concern ( not the luxury tax ) so signing free agents such as JT Realmuto is not prohibited however getting a player like him to defer a chunk of pay beyond the 2021 season is also likely required.

Say if Realmuto would accept $15 million for 2021 on a five year $125 million deal then $10 million could be deferred over the final four years of his contract when full revenue streams hopefully return. 🤔. In this budget scenario there’s not really room beyond doing one big deal like that but there would certainly be enough left to complete a competitive roster.

Smart choices are going to have to be made both by the players and teams ... that’s not to mention the fact that the CBA expires after the 2021 season which introduces its own set of negotiating headaches 🥴.

The entire 2020 Tampa Rays payroll had the full season been played was $76 million .... in my projection above the Phillies have 2/3 of that amount remaining to fill 70 percent of the 2021 roster ... if the Rays can go to the World Series on less than half of what I’d Phillies project to spend even with a reduced budget ... it can be done ... just sayin 🤷‍♂️

Happy Day, Happy Baseball ⚾️

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