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Realmuto in focus for Phils at arb deadline

@paul_casella
January 8, 2020

PHILADELPHIA -- The Phillies have six players with whom they could exchange arbitration figures ahead of Friday's 1 p.m. ET deadline, but the focus figures to be on All-Star catcher J.T. Realmuto. Realmuto, who is set to earn a significant raise from his $5.9 million salary in 2019, is eligible

PHILADELPHIA -- The Phillies have six players with whom they could exchange arbitration figures ahead of Friday's 1 p.m. ET deadline, but the focus figures to be on All-Star catcher J.T. Realmuto.

Realmuto, who is set to earn a significant raise from his $5.9 million salary in 2019, is eligible to become a free agent following the '20 season. Both Realmuto and the Phillies, however, have expressed interest in working out a long-term deal.

That said, don't be surprised, nor concerned, if the two sides instead agree on a one-year contract for the time being. Such a move would likely have more to do with 2020 Competitive Balance Tax implications than any sort of stalemate in negotiations.

Realmuto is projected to earn $11 million in arbitration, according to Cot's Contracts. When adding that total to the Phillies' guaranteed contracts and renewals of players with less than three years of service time, as well as the Cot's projections for Philadelphia's other five arbitration-eligible players (Zach Eflin, Héctor Neris, Vince Velasquez, José Álvarez and Adam Morgan), that brings the Phillies' projected payroll to approximately $203 million. The competitive balance tax threshold for 2020 is $208 million.

Salary arbitration, explained

Therein lies the problem with working out a potential Realmuto extension at this point in the offseason. The Phillies have never exceeded the luxury tax, but would certainly do so if they handed out a long-term deal to Realmuto ahead of arbitration. After all, the number that counts against the 2020 tax threshold is the average annual value of a player's contract, not just his '20 salary.

As for whether the Phillies would be willing to exceed the tax (and pay the accompanying 20 percent penalty on any overages), managing partner John Middleton addressed that topic earlier this winter.

“I’m not going to go over the luxury tax so we have a better chance to be the second Wild Card team,” Middleton said in October. “That’s not going to happen. I think you go over the luxury tax when you’re fighting for the World Series. If you have to sign Cliff Lee, and that puts you over the tax, you do it. If you have to trade for Roy Halladay, and sign him to an extension and that puts you over the tax, you do it. But you don’t do it for a little gain.”

Thus, the Phillies could accomplish both of their goals -- staying under the tax and securing Realmuto for the future -- by settling on a one-year deal in the $10 million to $11 million range, then working out a multi-year extension in Spring Training. Making that scenario all the more plausible is the fact that the Phillies will have nearly $50 million coming off the books after 2020 just with the contracts of Jake Arrieta, David Robertson and Didi Gregorius.

It also helps that the Phils have proven they're willing to continue negotiating with marquee players even after exchanging arbitration numbers. Not only has Philadelphia not had an arbitration case since 2008 (Ryan Howard), but the Phils also reached a four-year, $45 million deal with Aaron Nola last offseason, just one day before they were scheduled to have an arbitration hearing.

While all eyes will be on what happens with Realmuto in the coming days and weeks, the Phillies' five other arbitration-eligible cases all figure to be settled without much fanfare. It's unlikely that any of those cases reach an arbitration hearing, and some could reach a one-year deal before even exchanging numbers ahead of Friday's deadline.

Paul Casella is a reporter/editor for MLB.com based in Philadelphia. Follow him on Twitter @paul_casella.