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With six of the Chicago Cubs’ seven arbitration cases settled, and the roster rounding into shape, it’s fair to start taking a look at the Cubs’ 2012 payroll obligations, and what the team might have “left” to spend in the next couple of months.

Our general sense has been (a) available payroll will be somewhere around $125 to $130 million in 2012 (depending on team revenues in 2011 minus non-player expenses in 2012), and (b) to date, the Cubs have committed about $100 million. That would mean that the Cubs still have a considerable chunk of cash left that they could spend in 2012 if so inclined.

But are we wrong?

First, let’s take a look at the players the Cubs have under contract for 2012, with a couple of guesses on the bench for purposes of this exercise:

Starting Position Players:

Geovany Soto – $4.3 million

Bryan LaHair – $480k

Darwin Barney – $480k

Starlin Castro -$600k (estimated raise)

Ian Stewart – $2.238 million

Alfonso Soriano – $18 million

Marlon Byrd – $6.5 million

David DeJesus – $4.25 million

Starting Rotation:

Matt Garza – $9 million (estimated raise)

Ryan Dempster – $14 million

Paul Maholm – $4.25 million

Travis Wood – $480k

Chris Volstad – $2.655 million

Bullpen:

Randy Wells – $2.705 million

Manny Corpas – $1 million

Jeff Samardzija – $2.7 million

Kerry Wood – $3 million

Jeff Beliveau – $480k

James Russell – $480k

Carlos Marmol – $7 million

Bench:

Steve Clevenger – $480k

Blake Dewitt – $1.1 million

Jeff Baker – $1.375

Tony Campana – $480k

Reed Johnson $1.15 million

Total Commitment for 2012: $89,183,000

Hey, all right, awesome. That’s even lower than we thought!

But. There’s always a but. In fact, in this case, there are several buts.

The first but is a big one: the Cubs owe the Marlins the difference between Carlos Zambrano’s salary ($18 million) and Chris Volstad’s salary ($2.655 million), which comes to another $15.345 million.

So, we’re up to $104,528,000. Ok. Well, there’s still plenty of room.

But.

The Cubs also owe Carlos Pena a deferred $5 million payment this month as part of his $10 million deal from last season.

So, we’re up to $109,528,000. Things are getting a little tighter.

But the Cubs still owe Jim Hendry and Mike Quade their salaries for 2012. That money doesn’t come directly out of payroll, but it does reduce the total dollars available for spending in 2012, and, like payroll, it varies from year to year (in other words, payments to executives and managers feels a lot like payroll). So that’s a total of about $2 million more.

Now we’re at $111,528,000.

And then there are the new hires in the front office. Theo Epstein is making a little over $3.5 million in 2012. Jed Hoyer is getting an estimated (by me) $1.5 million. Jason McLeod, Joe Bohringer, Shiraz Rehman, and Matt Dorey together are probably at least another $1 million. And then there was the raise for Oneri Fleita. All told, let’s say there’s an additional $6.5 million in executive expenses this year, which is probably conservative.

That brings things to $118,028,000.

(There is one good but: folks have talked at length about a $2 million payment owed to Carlos Silva in 2012, but after some digging, it looks like that payment is being covered by the Mariners.)

There could also be an extra $500k going to someone like Andy Sonnanstine if he makes the roster (I chose Corpas to make the roster to split the baby in terms of Corpas and Sonnanstine, each of whom the Cubs signed on a split deal that will pay them about $1 million if they make the big team), and I may have gone too low on Castro’s raise (as an auto-renew player, the Cubs can essentially pay him whatever they want – stars, however, tend to get raises as a sign of good faith). And we haven’t even gotten into a variety of new, non-player, non-executive expenses associated with improved organizational technology, facilities, scouts, etc.

The point of this exercise is not to put a precise dollar amount on where things stand (we’re close, but throwing in the executive dollars makes the estimate a bit mushy). Instead, the point is only to help us keep perspective on how much money the Cubs have “left” to spend on players. Sure, it could be another $20 million. Or it could be as little as just a couple million. Or none.

I still think the Cubs make large offers on guys like Yoenis Cespedes and Jorge Soler, in part because the amount of money to be spent on amateur players is very much in flux this year, but it may well have turned out that those “crazy” suggestions that the Cubs couldn’t afford a guy like Prince Fielder this year weren’t so crazy after all.

EDIT: To reiterate, the point here is not to contend that executive salaries are “payroll.” In fact, I said the opposite. The point, instead, is to look at known, hard dollar costs to evaluate how much room is actually available for payroll (because, as Tom Ricketts has said, the total baseball operations budget will approximately equal the revenue coming in the door – so revenue minus unknown expenses = expected payroll. To the extent we can discuss some of those non-payroll expenses – like executive salaries – it’s worth doing so).

Inartfully explained in the original post, but I’m not saying executive pay is a part of payroll. I’m saying it’s LIKE payroll, because it reduces the amount the Cubs can spend on payroll.

Think of it this way: if the Cubs spend $5 million on a free agent, the available dollars for payroll go down by $5 million. If the Cubs spend $5 million on a new executive, because the money is all coming out of the same pot – the total baseball operations budget – the available dollars for payroll also goes down by $5 million.

It’s another way of thinking about it, not a mischaracterizing of the line items on a budget statement.

  • Richdanna

    $5M payment on Pena is made in 2012, but appropriated to 2011 payroll. It’s not a function of 2012’s payroll…

    • hardtop

      no, i believe it is. everything i have read indicates that 5 mil would count towards this years payroll.

    • Kyle

      Bruce Levine reported that the Cubs are counting it toward 2012’s budget.

    • http://www.bleachernation.com Brett

      For purposes of the 2011 reporting number to MLB (i.e., the number the Cubs submit to MLB as their 2011 payroll for luxury tax purposes), I believe you’re right.

      For purposes of the Cubs’ 2012 budget (i.e., as a company, the money the team has available to spend in the year 2012), I believe the $5 million is a part of the 2012 budget.

  • King Jeff

    I never have as much money to spend as I originally thought either.  I don’t see a whole lot left for the team to spend any extra money on anyway.  With Fielder out of the question, and the rotation as bloated as it is, does anyone want the Cubs to overpay for Edwin Jackson or the like?  I think we can all be in agreement that anymore spending should be done by bringing in prospects like Soler and Cespedes.

  • Kyle

    All those other things go into the “total baseball operations” budget which we were told is about $200 million.

    But in general, yeah, I agree, we’ve nickel-and-dimed our way up to about our ceiling at this point.

    • Martin

      This.

      I think the Cubs aren’t sitting on a huge amount of money they are not spending (and wouldn’t have for Cespedes and/or Soler), but their player payroll is unfortunately, due to past obligations, higher than fans would hope.

    • Webb

      I’m not sure where you get $200 million but this article does mix and match payroll expense and baseball operations expense. It is inherently deceptive. The new computer programs and additional personnel hired at more expensive rates may diminish what is available for the final major league budget but shouldn’t be counted as part of it. The Cubs might have capped themselves at $115M or so (as an example) to accommodate those new organizational investments.

      • WGNstatic

        It is a good point to distinguish the MLB salaries and the total baseball operations budgets. The $125-$130 M comes from the belief that the team could hold payroll steady from the 2011 season, fair enough.

        There are a couple of important differences however.

        1) The team will be forced to spend considerably less in the draft in 2012 than in 2011. I don’t know exactly how much they spent last year, or what the “cap” is for this year, but that difference could be added to $ the team has left to spend.

        2) As for the salaries for Hendry and Quade. Yes, they need to be accounted for in the 2012 budget. That said, those numbers aren’t represented in the $130M based on the assumption of a flat payroll from last year.

  • MontelleW

    Looking at salaries, I’d say that Soriano and Dempster make up the 1 percent, and the rest of the team are just Occupiers LOL

  • Cubsin

    I hope (and expect) that Theo and Jed have a Plan B if they’re not the high bidders for Cespedes and/or Soler. There must be other viable unsigned prospects somewhere in the world (Cuba, Taiwan, Korea, Venezuela, Australia, Dominican Republic or elsewhere) they could sign in that event.

  • Wilbur

    So, while this year there’s not much margin, next year and beyond look good as Pena’s $5m, Zambrano’s $15+m, Dempster’s $14m and Byrd’s $6+m all come off the books. That’s $40+m that is available toward’s all the foreign, FA, and amateur talent the front office is targeting. I’m assuming the projects for Wrigley upgrade, Dominican Academies and Mesa improvements are financed and aren’t paid in lump sums from this part of the $200m baseball operations budget.

    2012 is apparently the “we hit bottom” year on the field and in available capital and we start heading North in 2013. I can live with that (hopefully anyway, as I’m getting a little long in the tooth).

  • Jeff L

    Brett, I truly have never seen anyone add up the executives salaries in addition to the players for the total payroll.

    • http://www.bleachernation.com Brett

      It’s not payroll. I’m saying it’s LIKE payroll, because it reduces the amount the Cubs can spend on payroll.

      Think of it this way: if the Cubs spend $5 million on a free agent, the available dollars for payroll go down by $5 million. If the Cubs spend $5 million on a new executive, because the money is all coming out of the same pot – the total baseball operations budget – the available dollars for payroll also goes down by $5 million.

      It’s another way of thinking about it, not a mischaracterizing of the line items on a budget statement.

      • Cubbie Blues

        IF

        X=baseball operations budget

        Y=payroll

        Z=X-Y

        Are we sure that the executives’ salaries aren’t taken out of Z?

        • Pat

          It doesn’t matter. There are X dollars to begin with (last year’s revenues). EVERYTHING else comes out of that pot. Executive salaries, building the Dominican facility, electric bills, payroll, whatever. Payroll (Y) is whatever is left after the other expenses. If payroll would usually be Y, but the team spens 5 million on new computers, etc., payroll now becomes Y-5.

          • Cubbie Blues

            Not if Y is earmarked specifically for player contracts and everything else gets taken out of Z. With Z including the funds for execs, scouting, facilities etc. basically everything else for operations. Maybe I’m wrong here but I am looking at Y being a constant for player salaries and Z being the variable where the rest of operations is budgeted out of.

            • Pat

              Ricketts has been very clear on multiple occasions as stating that baseball operations (including MLB payroll) will be whatever is leftover from the previous year’s revenue, minus expenses. It is not a constant. It is the last piece of the puzzle (the leftovers). Theo has some flexibilty in spending the baseball operations budget (going low on the draft if he wanted to increase MLB payroll), but the baseball ops budget is not a constant. It is revenue – business ops/expenses.

              If you want verification you could (though I advise against it) read Yellon’s interview with Ricketts on BCB. Ricketts adresses the issue specificallly.

              • Cubbie Blues

                Yes, but that still doesn’t preclude MLB payroll (Y) from being a constant for this year. They already know what last year’s revenue is (X). Out of that Y could be set and the rest is what everything else is taken out of.

                It’s impossible, at least for me, to be sure that either way is correct. We don’t know if there is a budget line, possibly a large sum, that is set aside for these type of added expenditures.

                I’m not trying to be a contrarian but I just don’t see how we can be positive which budget catagory the executives salaries comes out of, weather it is MLB payroll (Y) or the remainder of baseball operations (X) minus MLB payroll (Y) which would be (Z).

                • Pat

                  I don’t think the budget category matters. You have Total Available Cash (TAC). Everything has to come out of that. If you spend more on execs, that is less available for payroll (or anything else).

                  Again, Ricketts has prettu clearly stated that baseball ops is not the constant, but rather whatever is left over.

                  • Cubbie Blues

                    It is a constant for this year because they know what revenues were for last year. Everything for baseball operations is then budgeted out of that. I just don’t see where we can know, without seeing the line items, what are hard line earmarks and what is flexible. As I see it that just comes down to hat Theo finds the most critical.

        • http://www.bleachernation.com Brett

          Not certain, but, as others have said, I suspect not.

          • Cubbie Blues

            Thanks Brett, that was basically all I was trying to figure out. It just seemed like everyone was defenant that executive salaries were taken out of payroll and I was just pointing out that it we do not definitively know that.

      • Jeff L

        Brett, in terms of calculating payroll and how much Ricketts has to spend first you have to know exactly what his budget is. You also have to know what his budget is for. Is he saying that we will have 130 mil just for player acquisitions or not. He really hasn’t come out and said anything of the sort. So, until we know what kind of budget he wants for the actual payroll we are all just guessing. As for executive salaries in addition to player salaries I assume Ricketts being a billionaire can afford a 150 mil dollar payroll if he wishes to. Bottom line is till we know exact figures to come out of Ricketts mouth we are all guessing.

        • Kansas Cubs Fan

          “Sure, it could be another $20 million. Or it could be as little as just a couple million. Or none.”

          I’d call that guessing.

        • http://www.bleachernation.com Brett

          Dude – of course it’s educated guessing. The Cubs are private entity. You want to get me access to their books? I’ll give you all the “exactly” you want.

          Until then, you get obvious, and transparent, guesswork.

          • Jeff L

            Mostly, in the past couple years the owner actually came out and said what kind of payroll the Cubs will have. I just think it doesn’t matter what the payroll is or how much salary the Cubs have. Until Ricketts covers his loans for buying the Cubs, he’s going to keep lowering payroll. My guess is you will see the cubs around 80-90 mil in 2 years time.

  • JB88

    If you are going to include the FO’s, Hendry’s, and Quade’s salary, it would seem more appropriate to look at the overall operational budget, not the roster payroll. In fact, I think going forward, it might be better to look at the operational budget reducing payroll and other things to get a more accurate gauge on what the Cubs are willing to spend in free agency.

    • http://www.bleachernation.com Brett

      The problem in doing that – and the reason I haven’t – is because a huge chunk of the total budget is a black box. How much are all the minor league managers and coordinators being paid? The marketing team? How much does the electricity at the ballpark in Iowa cost?

      And so on, and so on. The point is to look at known costs, however you want to label them, and think about how it impacts the available dollars for payroll.

      • JB88

        Oh, I get all that, and I’m sure there are flaws in my approach, but if you are going to include other operational expenses in with the payroll, it becomes difficult (to impossible) to truly determine how much is remaining for the payroll because of all the other reasons you mention.

        For example, do you reduce the operating expenses further because some portion of the McD’s purchase or the right field renovations are going to come out of the operational budget? Are the Cubs accounting for the increased FO costs by reducing other costs elsewhere? Did the Cubs agree to increase their operational budget in order to induce Theo to come here?

        I agree there are a ton of unknowns and I appreciate you pointing out that there are extinuating circumstances that may reduce the payroll, but I’m not certain the best way to frame it is to include FO payroll along with the roster payroll.

        • http://www.bleachernation.com Brett

          I think you’re kind of proving the very question this post addresses – the Cubs might not have much money “left” for payroll in 2012. I chose to point out some non-payroll expenses that are known. The fact that there are many that are unknown only amplifies the point.

  • rich

    I agree Jeff why are the bosses wages counted Brett? I see that it’s all under the cash flow, but why no other has ever stated that or have they!

    • http://bleachernation ferris

      if there was a cap it’d be seperate…..

  • Tommy

    Hey Brett – Randy Wells called and wants to know why you stuck him in the bullpen!

    • http://www.bleachernation.com Brett

      Ha. I don’t actually think he’ll end up there (I think someone gets traded). But, for purposes of this, I had to put someone there…

    • gratefulled

      LOL!!! First you call him Well, and then assign him to the bullpen. Is there something we need to know about your animosity towards Randy Wells?

  • fearbobafett

    i think he was trying to go with the baseball operating budget that Rickett’s continually says will be Theo’s to do with as he pleases, which would include the suit’s salaries.

  • Buck

    OMFG just seeing..

    “Alfonso Soriano – $18 million”

    ..makes me want to tie my noose to Harry’s mic hand.

    Being a Cubs fan, Enron investor, HD-DVD collector and serial skank-bedder I seem to do a great job of compartmentalizing my own and my team’s transgressions by sweeping them under my “mental rug” with great effeciency. But dammit, Brett! Printing these things makes the rug move ever so slightly and my bar tab tends to get quite large when I need to get the broom out.

    • ferrets_bueller

      “Being a Cubs fan, Enron investor, HD-DVD collector and serial skank-bedder …”

      LMFAO, thats an awesome post, and applies to me as well (well, I didn’t invest in Enron though…and collect CDs, not DVDS), but….damn.  Maybe we’re Cubs fans for a reason, bahaha.

    • gratefulled

      14 million for Dumpster makes me crave whiskey

      • BetterNews

        Dempster will be done after this year, that is something to look forward to payroll wise.

  • Andrew

    Concepcion just got citizenship in mexico, should be a FA soon, maybe we have enough for the Cuban trio. Also no reason to assume this will be the final payroll. Garza and Byrd potential trades would probably alleviate at least 13-15 mill off payroll. byrd alone would be prolly 5-6 mill off payroll depending on who comes back, and a trade with the Red Sox seems somewhat likely since it makes a lot of sense.

    Also, don’t we still have 41 roster players with Wood signed or did I miss somebody getting waived? If so a trade somewhere might be imminent.

    • http://cubbiekingdom.wordpress.com hansman1982

      Last I checked, 2 nights ago, we were at 41.  Last year we spent 2 weeks at 41 on the roster and I think we may see that being the case until either the Garza situation or the compensation issue is settled.

  • Matt Murton

    Anyone else mortified about the fact that Soriano makes more than the 8 other position players combined?

  • Dave H

    Staggering to think that a third of the salary is for just two players.

  • Beer Baron

    On the positive side, this year they won’t have the option of dropping $14 million on the draft like they did last summer, so there will be some extra cash that was likely put into the baseball operations budget that can now go to salaries instead. Plus some additional revenue with the new signage in the bleachers will add to the budget, and the possible/probable trades of Byrd and or Garza could free up even more cash.  On the negative side, if we get our wish and Soriano is traded, the approximately $45 million we’d eat is all due within 18 months, so would be largely in this year’s budget.   Either way, seems there is easily enough to make a run at the Cuban players since those contracts would be spread over 5 years, but probably no other free agents other than maybe some non-guaranteed spring training invite types. 

    The figure that matters is 2013 – this year is a wash but I suspect they are freeing up room and trying to stock pile any extra cash this year so they can make a big push at next year’s free agent class.

    • http://CubbiesCrib.com Luke

      Not so fast on the draft money. Right now (subject to change of course), it looks like the allotted draft pools in 2012 will be based a figure slightly lower than 2011 slot numbers. That would me the Cubs will have to cut significantly from their 2011 spending.

      However, the Cubs will also have two supplemental round picks to factor in at, probably, about $1.5 million each. They may also have the option of trading for one or more compensation round picks and receiving a portion of the funds allotted for those (not sure if that is going into effect for 2012 or not).

      Also, the cubs can spend up to 105% percent of their slot without incurring horrific penalties. In the right situation, they might be willing to spend up to 110%.

      Add it all up, and I am fairly confident the Cubs will have about $11 million – $12 million to spend in 2012, but that their actual spending could break $13 million depending on this, that, and the other.

      But for now, take most of that with a nice big chunk of rock salt; it is still somewhat in flux.

  • rbreeze

    Creative accounting will win in the end.  The Cuban’s are long term investments.  If they are that high on them, then they will find the money and make the books work just fine!

  • die hard

    So you have made the argument as I have to make do with Soriano even as a platoon player in LF with Campana or as I have suggested many times as a 1B with Lahair so Campana can start ever day and steal 50 bases ahead of Castro.

  • baseballet

    I’m curious as to how the Cubs’ expected payroll going forward will compare to the rest of baseball. Will we still be considered on that lofty second tier of spenders, right below the Yankees and Red Sox? Or have the recent big money signings by the Rangers, Angels and Marlins signaled a changing of the guard in the hierarchy of top payroll teams?

    Maybe the stagnant payroll has dropped the Cubs down to the third tier of spenders. It will be interesting to see the final payroll numbers for 2012 to see how many teams outspent the Cubs. Will we have to start thinking about the Cubs as a middle market team rather than a major market team?

    • Pat

      Assuming no new massive revenue streams (the board is nice, but I can’t see more than a couple million a year from that), and no ticket price increases, I would think the amount spent should remain fairly stable over the next few years.

      Keep in mind though, that is NOT saying it will be at the level the Tribune had it the last few years. Ricketts financed almost 700 million dollars of the purchase price and it will take about 30 million a year just to pay the interest. Assuming they want to pay it down at some point (the main block of 450 million can’t be paid down for several years due to the structuring of the deal with theTrib, but the other 245 – 265 could be), you could be looking at another 20 million a year to reduce the principal.

      Now the Trib was keeping profits, which Ricketts is not, but I doubt it was enough to cover the additional costs and keep payrolll around 145 million. The spending the last couple of years would seem to back this up.

      Also, assuming they do not get taxpayer funds to renovate Wrigley, they will have to put aside funds for that as well, since with their existing debt load I doubt they could get private financing of the fulll amount needed.

  • john

    Brett, for the application process—do we send apps to brett AT bleachernation.com?

    • http://cubbiekingdom.wordpress.com hansman1982

      I would recommend deleting your reply and re-reading the post in question.

    • MontelleW

      PHAIL!

    • http://www.bleachernation.com Brett

      Yes.

  • jim

    better?

  • Yuri Yurieovich

    haha is this guy an idiot?

    • andrewmoore4isu

      he might be an idiot, but you’re obviously a jackass for posting about it.

    • http://www.bleachernation.com Brett

      And yet you spent the time reading, and then commenting about, an idiot. You win at the Internet!

  • Yuri Yurieovich

    as r u

  • http://bleachernation ferris

    i think the rsox are gonna come after byrd even moreso now.

  • DRock

    Still bummed we are not getting Fielder…We would probably have signed either Pujols or Fielder had it not been for the ridiculous contracts Hendry gave to Soriano and Zambrano. Hope this Rizzo kid pans out for us…

  • http://jjcubs jj

    there has been a lot of accounting, checks and balances in the preceding blogs worrying that the cubs are going over there budget and gettinging rid of garza and other players. I haven’t read where tom ritter said the cubs are running out of money, You don’t get rid of your ace pitcher for prospects. I think the cubs will end up with the cubans and the prince for 5 years and 150 million.

  • BetterNews

    JJ–You feeling o.k.?(LOL)

  • Toosh

    Per Cot’s. Last year’s Opening Day payroll, $134,004.000. This year, $109,528,000. Front office difference, $4,500,000 more this season. That leaves a positive balance of $19,976,000 in those 2 areas for this season with which the Cubs can work.

    • BetterNews

      With a little accounting juggling I sure there’s more than that.

    • Pat

      How is the front office difference 4.5 mil, when Thei alone is 7 mil (3.5 salary, 3.5 covering of completion bonus)? Plus paying 2 GMs and 2 managers?

      • Toosh

        Per the above article, “$6.5 million in executive expenses this year” minus $2 million “the Cubs still owe Jim Hendry and Mike Quade”.

        • Pat

          Brett’s guess was 6.5 PLUS the two million for Hendry and Quade, so you can’t subtract that amount as Brett already did. Besides which, as I mentioned, not only is Theo getting 3.5 in salary, but also the team is covering the 3.5 million “completion bonus” Theo would have received from Boston if he had stayed this year. That’s an additional 9 million, minimum.

          • BetterNews

            I don’t think the bonus gets factored in.

            • Pat

              How could the bonus possibly not get factored in? They have to pay it. With money. Money that can then not be used for something else. This is like the argument that signing bonuses aren’t part of payroll.

          • Toosh

            I’m not going to debate the numbers. There’s a lot less money on the books this season (so far) than last. The Cubs can do with the difference what they please. I’d put some into improving the facilities for the team at Wrigley Field.

  • barroof

    Hendry would have paid $30,000,000 for the McDonalds. WOW. Can’t believe this is our roster and we’re one of the top spenders. Problem is we’ll have to start over paying again next year to get us out of this mess.

    • gratefulled

      “Hendry would have paid $30,000,000 for the McDonalds.”

      Freaking hilarious. Thank you Bleacher Nation.

  • ty

    On the West side Nolan Ryan and company keep moving on Up!

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