MLBTR is publishing Offseason Outlooks for all 30 teams. Click here for the other entries in this series.

As they continued to build back from a full roster teardown, the Phillies finished the 2017 season with a 66-96 record, good for last in the NL East. But their rebuilding process has begun to bear fruit. Thanks in part to contributions from some exciting young rookies, Philadelphia finished the season strong by posting a winning record in September (15-13). The team is now free of the veteran encumbrances that trailed its last competitive window, so it’ll face some questions on how to allocate financial resources.

Guaranteed Contracts

Odubel Herrera, OF: $26.4MM through 2021 ($11.5MM club option for 2022, $2.5MM buyout)

Arbitration Eligible Players (service time in parentheses; projections via MLB Trade Rumors)

Free Agents

[Philadelphia Phillies Depth Chart; Philadelphia Phillies Payroll Overview]

The Phillies already announced in late September that Pete Mackanin will not return as manager in 2018, but will instead assume a role in the front office. Part of the organization’s focus this offseason will be to find a replacement manager who can get the most out of a very young group of players as they develop at the major-league level. Based on their record after the All-Star break (37-38), it seems as though the worst could finally be behind the Phillies after five consecutive losing seasons. Whoever GM Matt Klentak hires as Mackanin’s replacement will likely be managing the next contending team in Philadelphia.

In addition to steps forward for players like Odubel Herrera, Aaron Altherr and Aaron Nola, the Phillies also saw impressive contributions from many players promoted during the 2017 season. Rhys Hoskins, Andrew Knapp, Jorge Alfaro and Nick Williams all showed well in their first taste of major-league action, with Hoskins in particular looking like a star. Stud shortstop prospect J.P. Crawford saw some playing time in September as well; it’s widely expected that he and fellow infield top prospect Scott Kingery will make major contributions at some point in 2018. Put simply, a major-league club that saw a lot of success from young players this year will see even more reinforcements next season. It’s also worth wondering whether the Phillies will make a push to extend some of these young players. MLBTR’s Jeff Todd already mentioned Nola as an extension candidate. Beyond him, Altherr, Hoskins and Williams have all shown enough talent to be worth a look.

As the youth movement reaches its peak in Philadelphia, the payroll has reached its valley. The only contract on the books for the Phillies in 2018 is that of Herrera, who stands to make just $3.35MM. They owe $3.5MM more in the form of buyouts and debts to former players, for a total of less than $6MM guaranteed dollars. Beyond that, only five of their players are even eligible for arbitration, and most of them are either potential trade fodder or non-tender candidates. Given that the Phillies have averaged over $144MM in payroll over the past seven seasons, a big decisions facing the Phillies this winter is how they ought to allocate their dollars. It’s worth mentioning that they’ve got the payroll space and prospect depth to acquire Giancarlo Stanton, should the organization decide he’s a good fit. It will be interesting to see whether they give out any long-term contracts to free agents this season, or opt to make shorter commitments now and wait until next season when the market is flush with high-end talent. They’ll be one of the few teams who’ll be able to afford the services of 2018 free agent juggernauts like Bryce Harper, Manny Machado, Clayton Kershaw, Josh Donaldson and Charlie Blackmon, any of whom might be worth waiting to negotiate with.

It’s possible that one or both of Freddy Galvis and Cesar Hernandez will open the 2018 season in a different uniform. Galvis stands to make around $7.4MM in arbitration this offseason. Rather than pay that hefty figure for a shortstop with a .287 career OBP, the Phillies would probably prefer to see what they have in top prospect J.P. Crawford. While Hernandez is still under control for three more seasons, the Phillies will likely try to get a look at Kingery at some point in 2018. This could make Hernandez a potential trade asset as well, if the right offer comes along. With such a minuscule payroll, however, they certainly won’t face any pressure to move either player.

With a high-upside youngster tabbed for each position on the diamond, the Phillies are most likely to concentrate their financial resources on pitching. Their starters as a group finished in the bottom third of baseball in ERA last season, and their young staff could benefit from having a seasoned veteran in the rotation. They have the money to spend on a top-of-the market starter like Jake Arrieta, if the front office wants to be aggressive, or any other open-market hurler that holds appeal. Another option would be to make a big push for the coveted Shohei Otani. Indeed there are 29 other teams that will be doing the same, but the potential to join an organization with such a bright future could be a draw for the Japanese phenom. The Phillies will probably want to add a couple of veteran arms to their bullpen as well. Adam Morgan had an incredible second half and cemented himself as a clear fixture behind Hector Neris, but overall the relief corps is in need of support.

Philadelphia had some success last year in taking on bad contracts, eating the salaries of those players and then flipping them for prospects. They acquired left-hander McKenzie Mills for Howie Kendrick, and got infielder Jose Gomez along with right-handers J.D. Hammer and Alejandro Requena in a trade that sent Pat Neshek to the Rockies. Mills, Gomez and Hammer all currently rank within the Phillies’ top 30 prospects (via MLB Pipeline), with Gomez leading the way at #16 in the organization. In essence, the Phillies used their financial muscle to “buy” some upside prospects. It’s a sound strategy. If any of these prospects pan out, it will be as though the Phillies used their extra payroll space last year to save money in the future; more cost-controlled players on the major league club means fewer dollars spent on free agents. It’s easy to imagine the club employing the same strategy during the coming season.

Following five losing seasons and a complete teardown of the major-league roster, the Phillies’ farm is stacked. Even after promoting three top-100 overall prospects last season in Hoskins, Crawford and Alfaro, their system still has four more in Mickey Moniak, Sixto Sanchez, Adam Haseley and Kingery. They also own the #3 overall pick in 2018’s June amateur draft. This abundance of talent in the minors will give the Phillies a wealth of options when they decide to make a playoff push, including the ability to use some of these youngsters as trade chips to fill holes on the roster with established major league talent.

As it stands right now, the Phillies will open the 2018 season with Aaron Nola at the top of the rotation. Behind Nola, however, likely follows a messy group of struggling youngsters. Ben Lively, Mark Leiter, Jerad Eickhoff, Vince Velasquez, Jake Thompson and Nick Pivetta all endured major ups and downs last season. Even if they don’t manage to add an elite starter like Arrieta through free agency, they’ll probably opt to sign at least one or two mid-tier options. Jason Vargas, Scott Feldman, Jaime Garcia, Doug Fister and Andrew Cashner all come to mind as pitchers who could probably be had on short-term contracts.

With veteran Andres Blanco set to depart in free agency, the Phillies will need a backup infielder to open the season. Blanco himself could be brought back at a cheap price, but he performed below replacement level last year. Outside of Kingery, Philadelphia’s farm system doesn’t really have any major league-ready middle infield options. Stephen Drew, Erick Aybar, Danny Espinosa and Eric Sogard are some examples of cheap veterans they could use to fill in around the infield. On the other hand, they might simply opt to make a low-profile minor league signing instead. They could even test their luck with the Rule 5 Draft; they had great success in identifying Herrera in 2014 and could try to strike gold again.

Third baseman Maikel Franco had a tremendously disappointing 2017 campaign, and it might be time to start looking for other long-term options at the hot corner. Mike Moustakas represents the top option on this year’s free agent market. Todd Frazier is another third baseman they could look into. However, since the Phillies would be considered long shots to contend in 2018, they might be better off giving the 25-year old another chance next season, and explore the free agent market next year if he doesn’t bounce back. At that time, superstars Manny Machado and Josh Donaldson will become available for bidding.

The Phillies will be an interesting team to watch this offseason. They have the financial resources to sign big-name free agents and take on a large contract in a trade, but it’s just as easy to imagine them making only small, short term signings while they continue to evaluate high-upside youngsters at the MLB level. Either way, expect the Phillies to improve on their 2017 record next season. With the wealth of young talent in the organization, the club should be on the rise for several years to come.