John Middleton Says Phillies Would Go Over Third Luxury Tax 'For The Right Player'

While expressing continued confidence in ownership, Phillies' president of baseball operations Dave Dombrowski declined to get into the specifics of the club's payroll expectations for 2025 in his season-end press conference earlier this month. 

But in a recent conversation with Scott Lauber of The Philadelphia Inquirer, managing partner John Middleton made it pretty clear where ownership stands. 

"Given where we are in contract cycles and minor league people coming up, I expect player payroll to be higher [than this year] rather than lower," Middleton revealed. "I'd be surprised if it's the same, and I'd be stunned, very stunned, if it's lower." 

According to Spotrac, the Phillies' carried the fourth-highest payroll in baseball this season at $247 million. Only the New York Mets ($317 million), New York Yankees ($309 million) and Houston Astros ($255 million) had higher marks. 

With that said, the Mets (Pete Alonso), Yankees (Juan Soto) and Astros (Alex Bregman and Justin Verlander) all have major payroll commitments coming off of the books this offseason. The only three free agents that the Phillies have are Jeff Hoffman, Carlos Estévez and Spencer Turnbull. So it's actually the Phillies who have the highest total in payroll commitments in 2025 currently at $222 million. That's more than $20 million more than the next closest team in the Yankees. 

That doesn't mean the Phillies will have the highest payroll in 2025, because you can rest assured that the Mets, Yankees and Astros won't be sitting on their hands this winter.

But given that the Phillies need to re-sign and/or replace their two highest-leverage relievers, add starting pitching depth and try to figure out left and center field, $222 million isn't going to be their Opening Day payroll in 2025. Not even close. 

The Phillies have now gone over the luxury tax threshold in three consecutive seasons. That means that as long as they are over the first luxury tax threshold without going back under it for a season moving forward, they will pay 50% on every dollar over it. In 2025, the first luxury tax threshold is $241 million. The second is $261 million. The third — which Lauber notes "comes with a 92.5% surcharge" — is $281 million. 

Could the Phillies surpass the third threshold in 2025 as they try to get over the hump in the postseason with an aging core? 

"For the right player, I have a high degree of confidence that Dave and I would go over the third limit," Middleton said. 

Obviously, the player that most Phillies fans have their eyes on is Juan Soto. A free-agent entering his age-26 season, Soto is seeking a $700 million contract, according to Jon Heyman of The New York Post. Whether he gets that figure or not, it's going to take a major contract to land the four-time All-Star. 

Juan Soto Reportedly Targeting $700 Million Contract - ⁦@OnPattison⁩ https://t.co/7NbIhlXeu2

— Tim Kelly (@TimKellySports) November 1, 2024

Anything can happen, but from here, it's hard to see what the Phillies can offer Soto that the Yankees and/or Mets won't be able to. The Phillies should still see if they can woo Soto away from New York City, but don't bet on that happening. 

But if the Phillies want to re-sign Hoffman, it's going to take a chunk of change. We've previously written about the possibility of the Phillies trading for a star closer, but in terms of prospect capital and money, that wouldn't be cheap. 

If the Phillies Decide They Need an Elite Closer, This May Be the Offseason To Do It - ⁦@OnPattison⁩ https://t.co/aRjoFide6w

— Tim Kelly (@TimKellySports) October 11, 2024

Last offseason, the Phillies made a push for Yoshinobu Yamamoto, before he ultimately decided to take a 12-year/$325 million deal from the Los Angeles Dodgers. The Phillies remain at a geographical disadvantage when pursuing Japanese players, but it's a market they need to get a foothold in. If Rōki Sasaki is posted this winter, the 22-year-old righty —who has a 2.02 ERA in four seasons in Nippon Professional Baseball — will get a deal in the hundreds of millions. 

The point is, the biggest organizational advantage that the Phillies have is their deep pockets, and an owner willing to spend the money he has. It doesn't appear that will be changing anytime soon.