By Tim Kelly, Sports Talk Philly editor 
The Philadelphia Phillies spent much of the early part of the 2016 MLB season scouting the country's best prospects, both high school and college, because they had "earned" the No. 1 pick in the summer's draft by having the worst record in the league the year before. The Phillies did go on to win 71 games in 2016, which was eight more than the 63 they won in 2015, but certainly didn't allow them to be competitive for a playoff spot.
While the Phillies weren't competitive from a wins and losses perspective in 2016, they apparently were extremely successful financially.
According to Kurt Badenhausen of Forbes, the Phillies were actually the most profitable team in the league in 2016:
Most profitable MLB teams via @Forbes
1. Phillies $88M
2. Cubs $84M
3. Red Sox $79M
4. Giants $78M
5. Astros $76M— Kurt Badenhausen (@kbadenhausen) April 11, 2017
Of the other teams on the list, all four have made a playoff appearance at some point in the last two seasons. The Chicago Cubs won the World Series last year, the Red Sox have won three World Series titles since 2004 and the San Francisco Giants have won three World Series titles in the last seven years.
The Houston Astros, the only team on the list that hasn't won a World Series in the last decade (or ever), are a World Series contender this year. The Astros are just four seasons removed from winning just 51 games in 2013, the second last losing season in a streak of six consecutive losing seasons. If the Phillies have a losing season in 2017, which is expected, it will be their sixth straight losing season.
According to Forbes, the Phillies had an Opening Day payroll of just $91.9 million in 2016, which is up to $111.9 million in 2017. Despite the drop in attendance that the Phillies have seen at Citizens Bank Park, having a payroll that low, when they were well north of $150 million at the end of their 2007-2011 run of National League dominance, allowed them to make a profit. Badenhausen also says that the new 25-year/$2.5 billion+ TV deal that the team signed with Comcast SportsNet Philadelphia allowed them to turn an operating loss into being the league's most profitable team in 2016:
.@Forbes Phils lost $80M over past 5 yrs, but new $5B TV deal & $60M lower payroll than 5 yrs ago produced big change.
— Kurt Badenhausen (@kbadenhausen) April 11, 2017
Make no mistake, the Phillies would prefer to make a much smaller profit — or probably even lose money — if it meant they could contend for a World Series again. John S. Middleton, who owns just under a majority of the team, is one of the five richest people in the state of Pennsylvania. He's taken a more hands-on approach with the team in recent years, including putting president Andy MacPhail in place and allowing the team's analytics staff, which works under MacPhail and general manager Matt Klentak, to expand rapidly.
Part of rebuilding is getting rid of more expensive contracts — Cliff Lee, Ryan Howard, Chase Utley, just to name a few — and replacing them with younger players like Aaron Nola, Tommy Joseph and Cesar Hernandez. Younger players, especially ones that haven't reached arbitration yet, are by definition cheaper, because they haven't earned higher salaries yet. So naturally, the Phillies' payroll has dropped in recent years.
Over the course of the next few years, some of the team's young talents will become more expensive – Odubel Herrera was the first example of a young player to get a long-term extension. The team is also expected to become active for top free-agents again, which will make more sense when you consider both the emergence of some of the young talents already on the roster and the free-agents available in the next two offseasons.
Without a scientific formula, one may think that the $88 million surplus that the Phillies had in 2016 could dry up pretty quickly. Salaries are expected to balloon over the next five years, with speculation that Bryce Harper, Mike Trout and Manny Machado all could eventually receive long-term contracts worth more than $40 million annually. Players already on the roster, like Maikel Franco, will get more expensive as they approach arbitration as well. That said, if the team plays well, more people will come to the park and prices can be increased for tickets, merchandise and ads. The team will likely also get a larger payout from their television deal later in the decade as well.
