Reconstructing the Phillies’ roster this offseason will be a challenging task for Ruben Amaro Jr. The Phils have $104.5 million already committed to six players in Cliff Lee, Cole Hamels, Ryan Howard, Jimmy Rollins, Jonathan Papelbon and Mike Adams.
That’s nine figures for two starting pitchers, two infielders in their mid-30s, a closer who hasn’t been getting many opportunities to close and a setup man who admitted his velocity may never return after right shoulder surgery. Yikes.
The Phillies have never exceeded Major League Baseball’s luxury tax threshold, which for the last couple seasons has served as a reliable barometer for their self-imposed salary cap. The tax threshold has been $176 million, but next year increases to $189 million. First-time offenders must pay 22.5 cents on every dollar they are over the cap, with the penalty becoming more severe for each additional transgression.
A team’s luxury tax number is based on the average annual salaries of its players, plus contract bonuses and player benefits. So even if the limit is $189 million, a team will have to be in the $175-177 million range to be comfortably under the threshold. That leaves the Phils about $70 million more to spend on next year’s team. While they may not spend that full $70 million on a team that may not contend anyway, they’ll also want to maximize their investments on Lee, Hamels and Howard by adding enough talent around them.
Which leads us to the curious case of Kyle Kendrick.
Kendrick made $4.5 million this season in his third year of arbitration. Because he is a "Super Two" player, Kendrick has a fourth year of arbitration. Kendrick, like Hamels, Howard and Hunter Pence before him, gets that final year of arbitration because of the timing of his initial call-up.
The Phillies like to come to agreements early with their arbitration-eligible players to avoid taking things to an arbiter. They did that with Kendrick prior to 2012, when they signed him to a two-year, $7.5 million deal covering his second and third years of arbitration.
The Phillies have three options with Kendrick this winter: Settle on a multi-year extension, go to arbitration and pay him a high one-year salary, or non-tender him like they did Nate Schierholtz this past offseason.
Two months ago, extending Kendrick looked like an easy decision. Through his first 13 starts he had a 3.22 ERA, a .247 opponents’ batting average, and he averaged 6.7 innings per start. But the dropoff since the second week of June has been sharp -- Kendrick’s last 10 starts have resulted in a 6.09 ERA, a .304 opponents’ average and 5.8 innings per start.
The net is a 10-8 record, 4.36 ERA and 1.31 WHIP through 23 starts -- pretty average numbers. Is that worth the $8-10 million an arbiter might award him? Is it worth $6-8 million per year over a three-year contract extension?
A lot of it is dependent on the other parts of the rotation. Lee and Hamels are locked in at the top. Then there’s Kendrick, fellow Super Two John Lannan (who also enters his fourth year of arbitration), the recovering Roy Halladay, and Miguel Alfredo Gonzalez, who may or may not join the Phillies. MLB.com reported Wednesday that talks with the high-priced Cuban free agent had hit a snag. It doesn't mean Gonzalez won't end up with the Phils, but there could be an issue with his medicals.
Kendrick will be 29 at the end of the month. Locking him up to a three-year deal worth $18-21 million would cover the rest of his prime years and give the Phillies, at worst, a No. 4 starter for a reasonable price. It would also decrease their luxury tax bill next year, as a $6-7 million AAV is less than he’d likely be awarded in arbitration.
A lot of this will be determined by how Kendrick pitches the rest of the season and how the Gonzalez situation plays out.
The Phillies have plenty of money already committed and many spots already filled. If Chase Utley is extended, the Phils will have starters locked up at first base, second base, shortstop, left field and center field. There just aren’t a whole lot of areas to spend, especially if Darin Ruf can push his way into a starting outfield job.
The bullpen is the obvious area to upgrade, but the Phils could instead opt for a free agent SP like A.J. Burnett, Matt Garza, Josh Johnson, Jorge De La Rosa, Phil Hughes or Ervin Santana over Kendrick. All of those players have more upside than Kendrick, though most would require more money over more years.
Something to keep an eye on as we watch Kendrick’s final 10 starts.