They traded Cliff Lee to the Mariners.
They traded prospects Kyle Drabek, Michael Taylor and Travis d'Arnaud to Toronto.
They got prospects Phillippe Aumont, Tyson Gillies and J.C. Ramirez from Seattle.
Toronto shipped Taylor to Oakland for prospect Brett Wallace.
"We could have kept both of them," Phillies general manager Ruben Amaro Jr. said about Halladay and Lee during Halladay's introductory news conference Wednesday at Citizens Bank Park. "But it was a baseball decision for me and our organization. We could not leave the cupboard bare. If we had just acquired Roy and not moved Lee, we would have been in a position to have lost seven of our 10 best prospects in our organization. That is not the way to do business in baseball. This move, coupled with Lee's, allowed us to replenish our system for the foreseeable future. There are a variety of reasons to make this move, but more than anything, this is a baseball decision."
Let's look at this baseball decision.
The Phillies tried hard to land Halladay in July, but Toronto wanted Drabek, Domonic Brown, J.A. Happ and Anthony Gose. The Phillies balked, and instead shipped prospects Jason Knapp, Carlos Carrasco, Jason Donald and Lou Marson to the Cleveland Indians for Lee and outfielder Ben Francisco.
The Phillies and Blue Jays talked again about Halladay during last month's GM meetings. Sources considered it a pipe dream at the time, but talks intensified last week at the Winter Meetings as baseball insiders called the Phillies the frontrunners for Halladay.
Talks also might have heated up after the Phillies met with Lee's agent about a potential contract extension. Negotiations never got serious, but the Phillies left with the impression that Lee ultimately planned to test the free agent market after next season.
So they pushed forward with Halladay.
But the Phillies needed a couple things to happen once they agreed on the prospects to send to Toronto:
1. They needed Halladay to waive his no-trade clause, which was not an issue.
2. They needed him to agree to a contract extension. The Phillies imposed a 72-hour window to reach an agreement. If they could not reach an agreement, they would not have made the trade. Halladay ultimately signed a three-year, $60 million extension through 2013. He also has a $20 million vesting option for '14.
CC Sabathia will be paid an average $23 million over the course of his seven-year contract with the Yankees. Johan Santana will be paid an average $22.9 million over the course of his six-year contract with the Mets. Halladay essentially signed an extension under market value to join the Phillies. And because the Phillies knew they would have their ace beyond next season, they felt comfortable losing Drabek, Taylor and d'Arnaud.
But back to Lee.
Did they really have to trade him? The Phillies could have kept Halladay and Lee to create a super rotation in 2010. But Amaro and Phillies president David Montgomery returned to the organization's long-term outlook. They insisted they needed to restock the farm system after losing seven top prospects for Lee and Halladay.
They need prospects because they know they will be unable to keep all their top players once they become eligible for free agency. Jayson Werth is a free agent after 2010. Ryan Howard, Brad Lidge, Jimmy Rollins, Raul Ibanez and Ryan Madson are eligible for free agency after 2011.
Sure, they can fill some of those holes via free agency, but they cannot fill every one of them that way.
And their payroll appears to have a limit. They appear to have budgeted $140 million for payroll in 2010, and they are quickly approaching that number, even after losing Lee's $9 million salary and receiving $6 million from the Blue Jays for Halladay's salary.
"We're not going to draw many more people," Montgomery said. "There are finite revenue opportunities. There is no question about that. But we are at the high end of what we can do revenue-wise. We're on the high end of what we can do on the expense side. But the opportunity to sustain the team's success is what this is based on.
"Why are we where we are today? May I suggest [homegrown players like] Jimmy Rollins ... Chase Utley ... Ryan Howard ... Carlos Ruiz, Ryan Madson, Brett Myers, etc.?"
Amaro said right-hander Joe Blanton, who the Phillies shopped during the Winter Meetings, would have not have provided the haul Amaro said he felt they needed.
"We felt like the best value we would get would probably be with moving Cliff," Amaro said. "I didn't really want to move him, but I felt for the future of our organization that this is the best way to go about getting to the goal.
"My job is to keep this a viable organization for years. Not just for 2010. I think back often when we make these deals to what (former general manager) Paul Owens said -- God, rest his soul -- you know that you've come a long way if you're having one or two players from your own system having an impact every year. That's the goal. We can't lose sight of that. We need to be able to have young players come and help us."
But if the Phillies had kept Lee, he would have entered free agency as a Type A free agent, which meant the Phillies would have received two compensatory draft picks once he signed elsewhere.
"Draft picks are still Draft picks," Amaro said. "There's no guarantee that the first-round Draft pick is going to be the type of player or prospect that we can acquire in this deal for Lee."
The Phillies wanted prospects they knew, not Draft picks they did not know. Phillies assistant general manager Benny Looper was familiar with Aumont, Gillies and Ramirez because he worked with Seattle through the 2008 season. But Looper also said the Phillies had scouted Seattle's system heavily and felt comfortable with the prospects they were getting in return.
And at that point, Amaro said the Phillies felt more comfortable trading Lee and sending their prospects to Toronto.
"We felt we did what was best for our organization," Amaro said. "Is it going to be the right decision? It remains to be seen. I do not know that. Is it risky? Yes, because you're moving a lot of talent from your system. At the same time, I don't mind taking a risk on a guy that I feel is one of the best pitchers in baseball."