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Phils, Realmuto exchange arbitration figures

Extension beyond 2020 remains an option; Neris also unsigned
@paul_casella
January 10, 2020

PHILADELPHIA -- The Phillies did not reach an agreement with J.T. Realmuto before Friday's deadline to exchange salary numbers for arbitration, but the door remains open for the two sides to work out a long-term deal. Realmuto filed at $12.4 million, while the Phillies filed at $10 million, a source

PHILADELPHIA -- The Phillies did not reach an agreement with J.T. Realmuto before Friday's deadline to exchange salary numbers for arbitration, but the door remains open for the two sides to work out a long-term deal.

Realmuto filed at $12.4 million, while the Phillies filed at $10 million, a source told MLB.com's Mark Feinsand. Realmuto made $5.9 million in 2019, while earning his second All-Star selection and first Gold Glove Award.‬

Though Realmuto and the Phillies are now in line for an arbitration hearing next month, a source told MLB.com that mutual interest remains to work out an extension that would keep him in Philadelphia. The inability to settle on a deal prior to the deadline is not expected to impact long-term negotiations with Realmuto, who is set to become a free agent following the 2020 season.

Salary arbitration, explained

The Phillies also exchanged figures with right-hander Héctor Neris, meaning the club could potentially have a pair of arbitration hearings in February. Neris filed at $5.2 million, while the club countered at $4.25 million, a source told MLB.com. The Phils reached one-year deals with their other four arbitration-eligible players: Zach Eflin ($2.625 million), Vince Velasquez ($3.6 million), José Álvarez ($2.95 million) and Adam Morgan ($1.575 million).

Philadelphia has not gone to an arbitration hearing since 2008 with Ryan Howard, though the organization did find itself in a similar position last offseason after exchanging figures with ace Aaron Nola. On the eve of the scheduled hearing, however, the two sides agreed to a four-year, $45 million extension.

While it remains possible that a similar scenario might unfold with Realmuto, don't be surprised -- nor concerned -- if Realmuto ultimately lands a one-year contract for the time being, whether it's at an arbitration hearing or settled beforehand. 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 Baseball 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 Cot's Contracts' $4 million arbitration projection for Neris, that brings the Phillies' projected payroll to approximately $201 million. The Competitive Balance Tax threshold for 2020 is $208 million.

Therein lies the problem with working out a potential Realmuto extension at this point. The Phillies have never exceeded the luxury tax but would certainly do so if they handed out a long-term deal to Realmuto prior to Spring Training. 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% penalty on any overages), managing partner John Middleton addressed that topic 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 multiyear 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.

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