Phillies

How could qualifying offer and draft picks affect Phillies' free agency plans?

How could qualifying offer and draft picks affect Phillies' free agency plans?

At the much-discussed press conference earlier this month with the Phillies' top three decision-makers, Andy MacPhail referenced lost draft picks when the topic of drafting/player development failures came up.

He pointed out that in the 2018 draft, the Phillies did not have a second- or third-round pick because of the signings of Carlos Santana and Jake Arrieta the prior offseason. They lost their second-rounder in 2019 with the Bryce Harper signing.

The Phillies lost these picks because all three players were extended qualifying offers by their previous teams.

Here's a refresher on the qualifying offer process, which directly affects free agency every year.

• The qualifying offer is the average of the top 125 salaries in baseball. This year, for the first time, it decreased. It was $17.9 million last offseason and $17.8 million this time.

• A team extends a qualifying offer to a player it would either like to keep or look to obtain draft pick compensation from losing. The Nationals know that Anthony Rendon will reject the qualifying offer, thus it's a no-brainer for them to extend it to ensure they receive a high draft pick if they lose Rendon.

• Sometimes, it doesn't work out. The Phillies gave Jeremy Hellickson a qualifying offer and he accepted it in November 2016 for one year and $17.2 million when it became clear a better market for him wouldn't develop. A similar situation could apply this winter to a free agent like Didi Gregorius, who may be good enough to warrant a qualifying offer but may also prefer to take the big one-year salary to prove his worth for future free agency.

• Teams do not lose their first pick when signing any free agent. The highest pick a team can lose is its second pick. If a team signs two players who were given qualiying offers, it loses its next-highest pick. This is why the Phillies lost a second and a third to sign Santana and Arrieta. The second-rounder was forfeited to sign Santana; the next-highest pick (third) was forfeited for Arrieta.

A team with a relatively weak farm system like the Phillies should want to keep every pick, especially with a new scouting director coming in. But it's not always realistic. There are top-notch, win-now free agents available this offseason. You know all the names: Rendon, Gerrit Cole, Josh Donaldson, Zack Wheeler, Marcell Ozuna, potentially J.D. Martinez and Stephen Strasburg. 

Some players cannot be extended a qualifying offer. This applies to players who have already received one and players who were traded within the previous season. Mike Moustakas and Yasmani Grandal are ineligible for the QO because they already played under it. Nicholas Castellanos and Yasiel Puig are ineligible because they were traded during their walk years.

The Phillies shouldn't and probably won't let the qualifying offer affect their decision-making with Rendon, Cole or Strasburg. Where it gets interesting is with a player like Donaldson, who is very good but whose production can also be found elsewhere via trade or the right free-agent signing. Donaldson is better than Moustakas, but is he better enough to also justify losing a high pick? The answer may still be yes but it's something the Phillies will surely weigh throughout the offseason (if Moustakas opts out of his remaining $11 million with Milwaukee).

The top of the market should develop slowly this offseason. Strasburg, if he opts out, would benefit from waiting until Cole signs. Someone like Donaldson may want to wait until the market clears up for Rendon because his leverage would then shoot up. The Phillies struck quickly two offseasons in a row with the signings of Santana and Andrew McCutchen. This time around, the earliest developments could come in the relief and older starting pitcher markets. 

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Braves' signing of Will Smith has ripple effect on NL East and free agency

Braves' signing of Will Smith has ripple effect on NL East and free agency

Two weeks into free agency, the Braves have been more active than any team. Their biggest move was Thursday's signing of left-hander Will Smith, the top reliever on the market.

Prior to that, Atlanta brought back three of its own would-be-free-agents in right fielder Nick Markakis, catcher Tyler Flowers and reliever Darren O'Day.

The Smith signing is definitely the highest impact move of the bunch and makes the Braves a lot better. His deal is for a reported $40 million over three years. He is coming off his first All-Star appearance and back-to-back stellar years. He was 6-0 with 34 saves and a 2.76 ERA for the Giants in 2019, he struck out 96 in 65⅓ innings and he held lefties to a .157/.167/.229 batting line. Read that again ... 157/.167/.229!

Bryce Harper will face Smith many times over the next three years. The teams meet 19 times per season and you'd figure Smith will face Harper in a high-leverage situation whenever the game is late and close. Harper is 0 for 8 with five strikeouts lifetime against Smith. Smith will also factor into plenty of matchups with Juan Soto.

The Braves tried various closing formulas in 2018. They went through Arodys Vizcaino, A.J. Minter, Luke Jackson, Shane Greene and Melancon. For most of the season, the ninth-inning was a weakness, yet the Braves still won 97 games. 

Melancon will return in 2020 and could still close, but Smith is another very good option if he falters. It would probably make more sense for the Braves to try to use Melancon as the ninth-inning guy to free up Smith for high-leverage spots against lefties in the eighth or even seventh inning.

Why did Smith sign so quickly? For a couple reasons. First, $40 million over three years is a sweet contract for a reliever. He may not have beaten this deal even by waiting. But his representatives also effectively leveraged Thursday's qualifying offer deadline against teams interested in Smith. There was at least a threat that Smith could accept the Giants' one-year, $17.8 million qualifying offer if a better alternative was not presented by Nov. 14. That created more urgency on the Braves' part.

Removing Smith's name from the free-agent relief market further depletes an already light market. The top two potential free-agent relievers were set to be Smith and Aroldis Chapman, but Smith is a Brave in mid-November and Chapman returned to the Yankees on a new deal.

With Smith off the board, the top free-agent reliever might be longtime lefty starter Drew Pomeranz. In 25 appearances with the Brewers after a midseason trade, Pomeranz had a 2.39 ERA and 0.91 WHIP with 45 strikeouts in 26⅓ innings. He's generated a ton of buzz this winter and should also find a lucrative multi-year contract.

Chris Martin, Sergio Romo, Will Harris, Daniel Hudson and Dellin Betances are the best free-agent bullpen arms left. There are also trade candidates like Ken Giles, Raisel Iglesias and maybe Ian Kennedy if the Royals eat most of his remaining $22.5 million.

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Why J.T. Realmuto’s contract extension with the Phillies might take some time

Why J.T. Realmuto’s contract extension with the Phillies might take some time

SCOTTSDALE, Arizona — The Phillies went into this offseason prioritizing a contract extension for All-Star catcher J.T. Realmuto.

Even as the Phils pursue pitching and possibly a third baseman, they are quietly trying to hammer out that extension, according to multiples sources. 

But the extension might not come before the New Year. It might not even come before the opening of spring training.

Don’t panic. Realmuto solidified his status as the top catcher in baseball by winning the Gold Glove and Silver Slugger awards in 2019. The Phillies very much want to prevent him from becoming a free agent after next season and Realmuto, for months, has professed his affection for the Phillies and Philadelphia as well as his desire to stick around.

“Everything I’ve experienced in Philadelphia has been awesome so I wouldn’t be opposed to spending the rest of my career there,” he said in July. 

In order to preserve some payroll flexibility for the 2020 season, it is possible that the Phillies could sign Realmuto to a one-year contract this winter — he projects to make about $10.5 million in his final arbitration year — then subsequently finalize a separate multi-year extension that would kick in at the start of the 2021 season. The extension could be finalized and announced later this offseason or even in spring training.

Realmuto, who turns 29 in March, is projected to get an extension of four or five years with an average annual value of $20 million or more. By starting the extension in 2021, the AAV of Realmuto’s deal would not count toward the 2020 payroll and thus affect luxury-tax calculations. For tax purposes, the Phillies currently have about $116 million committed to nine players for 2020. Even with Realmuto’s 2020 salary still to be determined and raises due to a number of other players, the Phils do not appear to be in jeopardy of reaching the $208 million tax threshold in 2020 and have the room to pursue top free agents. But pushing Realmuto’s extension back to 2021 would allow for even more room under the tax threshold and that could come in handy this winter or even at the July trade deadline.

After the 2020 season, the Phils will gain some payroll flexibility as Jake Arrieta’s $25 million AAV and David Robertson’s $11.5 million AAV come off the books just as Realmuto’s extension would kick in.

The Phillies have never exceeded the tax threshold. Teams exceeding it for the first time pay 20 percent on every dollar they go over. Last month, owner John Middleton offered his thoughts about exceeding the tax threshold.

“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. “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.”

Other than expressing a desire to extend the relationship, Phillies general manager Matt Klentak has steadfastly declined comment on the status of talks with Realmuto on a possible extension. Klentak continued that tack at this week’s GM meetings.

“We love J.T.,” Klentak said. “Every week, it seems like he’s winning a new award. What all of that is doing is confirming what a lot of us have felt for a long time. This guy is the real deal. He can do everything. At some point in this offseason, we will likely talk to him about trying to keep him in the fold beyond his control years and hopefully we’ll line up on something.”

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