Phillies and Nick Castellanos agree to $100 million deal, as John Middleton clears the luxury-tax threshold

CLEARWATER, Fla. — Move over, Steve Cohen. There’s another big spender in the National League East.

John Middleton, frontman for the Phillies’ ownership group, bellied up to the billionaires’ bar here late Friday night and plunked down a cool $100 million to win the bidding on a five-year contract for free-agent outfielder Nick Castellanos, a major-league source said, confirming reports by Audacy Sports and ESPN.com.

The Phillies haven’t announced the deal because it’s pending a physical. But it represents a stunning wallet flex only two nights after the team agreed to a four-year, $79 million contract with Kyle Schwarber.

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Doubling down on sluggers — Castellanos from the right side, Schwarber from the left — will boost the Phillies’ payroll to approximately $240 million, $10 million over the initial luxury-tax threshold in the new collective bargaining agreement.

Repeat: The Phillies are over the luxury-tax threshold, a space they have never occupied in their history. Although Middleton has long maintained that he would pay the surcharge if management identified a move that would cement the Phillies as World Series contenders, the former collegiate wrestler is now firmly in the class of ownership heavyweights with the Dodgers’ Mark Walters, the Yankees’ Hal Steinbrenner, and of course, Cohen of the rival Mets.

It remains to be seen whether Castellanos and Schwarber are those players. Between them, they have two All-Star appearances and zero top-10 MVP finishes. But the Phillies have been absent from the postseason since 2011, the longest active drought in the National League. The roster is top-heavy with a handful of prime-age superstars, the farm system lacking in elite major league-ready prospects.

Money is the team’s biggest potential difference-maker, so Middleton and fellow owners Jim and Pete Buck are going all-in.

“Being able to see that just goes to show that this organization wants to win, they’re committed to winning,” said Bryce Harper, who was “blown away” by the news when he woke up Saturday. “I’m pretty excited right now.”

Signing Castellanos, who received a qualifying offer from the Reds, will also mean forfeiting a second-round draft pick. Phillies president of baseball operations Dave Dombrowski preferred not to do that. But the change in approach reflects what Middleton and Dombrowski see as a chance to slug a path back to October.

The strategy is clear: The Phillies hope to outhit what almost certainly will be ugly defense. Castellanos, like Schwarber, is a below-average outfielder. The Phillies have below-average defenders at every position save catcher (J.T. Realmuto) and second base (Jean Segura).

But can they mash? Absolutely. Since 2017, Castellanos has 124 homers and an .857 on-base plus slugging; Schwarber, who is due to report to camp Sunday, has 137 homers and an .836 OPS. They’re also coming off their best seasons. Castellanos, 30, reached career highs with 34 homers and a .939 OPS for the Reds; Schwarber, 29, did the same with 32 homers and a .928 OPS for the Nationals and Red Sox.

Add them to Harper (146 homers, .950 OPS since 2017), Rhys Hoskins (118 homers, .862 OPS), and Realmuto (91 homers, .805 OPS), and the Phillies have their deepest, most fearsome offense since the days of Ryan Howard, Chase Utley, Jimmy Rollins, Jayson Werth, and Raúl Ibañez.

“This is something that our ownership and our GM and president really gave us an opportunity to bring somebody in here, a guy like Castellanos. What a huge asset for us,” Harper said. “But also now we owe that back to them, right? We owe that to our fans, we owe that to the city of Philadelphia, and we owe that to our ownership.”

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At the outset of the offseason, the Phillies set out to add a middle-of-the-order bat. Even after the roster-freezing, 99-day owners’ lockout ended on March 10, when the luxury-tax threshold rose by 9.5% over last year’s $210 million mark and the National League adopted the designated hitter, team officials believed they would come up with one big-ticket offensive addition.

The notion that the Phillies could land two big-ticket free-agent sluggers didn’t pick up steam until later in the week, after they reached agreement with Schwarber. By Friday, they were deep in talks with Scott Boras, Castellanos’ agent.

For three years in a row, Phillies ownership treated the luxury tax like a limbo stick (or a salary cap, as some may argue) by approaching the threshold but not going over it. Last year, they came within $600,000 of the $210 million barrier.

But while the bar rose in the new CBA, the penalties for exceeding it (a 20% surcharge on every dollar up to the next threshold of $250 million) remained static. If ever there was a time to surpass it, this seemed to be the year.

The Mets had never gone over into tax territory either. But Cohen laid out $258.5 million this winter for Max Scherzer, Starling Marte, Mark Canha, Eduardo Escobar, and Adam Ottavino in an attempt to buy back the NL East crown.

Dombrowski also has a knack for talking ownership into taking a payroll to new heights. In Detroit, he got late Tigers owner Mike Ilitch to authorize a nine-year, $214 million contract for Prince Fielder. With Boston, he convinced Red Sox owner John Henry to spend big on David Price (seven years, $217 million) and J.D. Martinez (five years, $110 million).

Last week, Dombrowski declined to reveal the Phillies’ budget except to say he didn’t find it to be restrictive.

“As far as the [luxury tax], I’d say we have ownership that’s absolutely fantastic,” Dombrowski said. “They want to win. They’re very supportive.”

Harper’s influence, direct or otherwise, likely played a role, too. A few days ago, he discussed the Mets and Dodgers extending beyond the tax threshold, even referring to Cohen reverentially.

“Mr. Cohen, he’s done a great job evolving his team and doing what he kind of wanted to do,” Harper said. “He’s putting his splash on the market, on baseball. It’s great for the players to have that. I’m not going to deny that. He’s doing what’s best for the Mets and their fan base and that organization.”

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Middleton can now be mentioned in a similar vein. Only the Mets, Dodgers, and Yankees are expected to have a larger payroll when the season starts. It isn’t crowded in the big-spenders’ club.

If the Phillies’ owners stopped at $230 million, it would have been wrong to cast the owners as frugal or question their commitment. But just in case there was a doubt, Middleton erased it with a swipe of his debit card.

Now it’s up to his investments to pay off.