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With the renewal members of the 40-man roster (the guys with between zero and three years’ service time) all now under contract for 2012, the Chicago Cubs’ payroll for the expected 25-man roster is largely set. From a variety of sources, we can piece together that the Cubs’ payroll is between $110 and $112 million, a drop from last year’s $125 million mark, and a substantial drop from the $147 million the team spent in 2010.

The $110/$112 million figure is the lowest for the Cubs since 2007, and includes a number of costs for players not actually on the Cubs ($15+ million for Carlos Zambrano, $5 million for Carlos Pena). The actual, on-field payroll is going to be just about $89/$90 million, the lowest it’s been since 2005. The figure would have put them at just 14th in baseball last year, despite being in the third largest market.

The number is, at first blush, strikingly low. But there are obviously reasons, the biggest of which is the turnover of the roster, and the lack of a major free agent signing. Given the Cubs’ likely chance of competing this year, even with a major addition or two, I can’t complain about the lack of spending on payroll.

Tom Ricketts has said that his family plans to put every dollar that comes in the door back into the organization, so the drop in payroll would suggest an offsetting increase somewhere else.

So, where’s the “rest” of the money going?

Well, you might not be crazy about the answer(s), but it’s ultimately beneficial to the organization. A chunk went to Theo Epstein, Jed Hoyer, and the multitude of front office additions. A chunk went to the Cubs’ new technology solution. A chunk is being used to make various improvements to the Cubs’ minor league facilities. A chunk is being used for the renovations to right field at Wrigley. A chunk is being used for the new facility in the Dominican Republic. The McDonald’s property across from Wrigley Field was technically purchased by the Ricketts family (as opposed to the Cubs), but who knows what its ultimate use will be? It could end up being used for the Cubs, and, thus, paid for by the Cubs. There’s also money undoubtedly being held back to try and sign Jorge Soler, and perhaps other international prospects before the CBA changes everything in July.

We also have to acknowledge the very real possibility that the Cubs’ revenue took a hit last year (and is expected to take another hit this year), so the total dollars that the Ricketts family has to put back into the organization might be reduced.

Finally, even if the drop in revenue, combined with the new “other” spending, doesn’t entirely explain the successive drops in payroll over the past two years, I’m still not going to be critical. I can’t see how it would be in the Cubs’ best interests to spend just for the sake of spending. I think it’s fair to assume – trusting in the goodwill of the Ricketts family as both stewards of the organization and as fans who want to see the Cubs win – that whatever “profit” is banked this year will be made available to help the organization down the road.

  • TWC

    And let the ticket price complaining begin!  (again)

    • Katie

      Oh yes, let’s dig around in that fetid, steaming pile again. Joy! Bliss!

    • butlerdawgs

      Woo hoo!!

    • http://www.michigangoat.blogspot.com MichiganGoat

      Damn you Ricketts and you miserly ways, I want $10 tickets on Sunday, free Old Style on Tuesday and a check mailed to me $1000 for pain and suffering. We had the money to sign Pujols and Fielder but instead we “invested” in baseball minds and software, put together a younger team, and formulated a plan. Insanity pure insanity to waste our money this way. Tear it down, back up the truck, and leave unless you lower prices to A-ball levels. Argh… Revolt!

      Now let’s see who can’t handle a joke ;)

      • deej34

        Did Die-hard post under MG’s handle…?

        Cuz you know, Pujols woulda played third, Prince at first AND CJ and Buerhle for good measure. ;)

        • JasonB

          I thought Soto was at 3rd, Pujols was at 2nd and Barney was at SS with Castro playing DH, which is naturally the only place he can play since he failed at playing SS as a 21 yr old.

      • HoustonTransplant

        I concur wholeheartedly and unequivocally with this statement…if the Cubs did things right, our team would be as follows:

        1B: Prince Fielder (Detroit got him on the cheap)
        2B: Um…I’ll get back to you.
        3B: Aramis Ramirez (he was owed a big chunk of money and was only going to vastly improve despite age and declining abilities)
        SS: Starlin Castro (but he would have gotten a nice pay increase, thus making him the top-paid SS in baseball history
        LF: Soriano (no beef there…good job, Ricketts & Hoyer…star power name (if that’s all the power))
        CF: Albert Pujols (didn’t he play outfield before?)
        RF: A wheelbarrow filled with $18,000,000

        I’ll have to ponder how this front office has screwed up the pitching staff…

        • http://www.michigangoat.blogspot.com MichiganGoat

          MG LIKES, MOVES GOOD PAY TOP TALENT WE WIN 85 GAMES!

        • DowntownLBrown

          What was the Wheelbarrow OBP last year? Chance it hits 20 HR?

          • HoustonTransplant

            Um..I’m unsure on the exact number. I wouldn’t put 20 HR’s past it. It’s also no secret that the Wheelbarrow of cash is a defensive juggernaut in the OF, well, vastly superior to what WE have (thanks, Mr. Epstein/Hoyer/Ricketts).

            • Joker

              But the Wheelbarrow of Cash (WoC, for those of us in the know) likes the nightlife a little too much and bristled at the implementation of “The Cubs Way”. See, rumor has it, WoC was a little too much Gracie-esque and the tales of previous slumpbusting scared off Theo and Co. Shame.

  • AP

    I think it’s a great idea to strip down the major league payroll when there’s minimal chance to compete and then move that money to all the infrastructure the Cubs are working on. Then once they get everything lined out the way they want, that money can go back towards payroll since minor league spending is going to be capped in the near future anyway. Spend the money on the young guys now then when they get with the big club use the money to retain them. I think it’s a good move.

    • TWC

      AP, baby, that’s positively lucid and reasonable.  But you’re supposed to be kvetching about the Cubs not signing Fielder, Pujols, CJ Wilson and Jamie Moyer.  Well, maybe not Moyer.

      Did Edwin jackson ever sign, or is be still floating out there in the Borasphere?

      • AP

        I guess I said the loud part soft and the soft part loud. I’m always messing that up. I want to give our whole farm system (including the mascots) to the Angels RIGHT NOW for Pujols and then we will sign him to a 35 year $8 billion deal!!!

      • Andrew

        I think he signed with the nationals on a one year deal, he wanted to do well and test the market next year.

        • http://www.bleachernation.com Brett

          He did, and he will.

    • http://www.bleachernation.com Brett

      Agreed.

  • Jeff L

    No need too. I truly believe that the only fans that are really going to be unhappy by the way the Ricketts are spending and ticket prices will be season ticket holders. Their the ones that are forced to pay in order to keep those tickets. A good portion of us will wait for those season ticket holders to sell their tickets for a fraction of the price. It makes me feel good because I realize the tickets are already bought and I’m technically not rewarding Ricketts for fielding such a terrible team because he chooses to be cheap.

  • baseballet

    The critical question is where will the Cubs’ payroll rank in relation to other top payroll teams going forward. Without a top level payroll it will be difficult to become a frequent competitor for a World Series. The low payroll this year makes me suspicious that the Cubs will be more of a midmarket payroll team going forward rather than one of the top spenders.

    • TWC

      I would be very surprised if this year’s payroll wasn’t the lowest you’ll ever again see on the north side.

    • Matt

      Payroll rank does not equal competitive team. If that were true, the Cubs should have made the playoffs in 2010 and 2011 and the Rays, D-Backs and Brewers shouldn’t have made it this past year. It’s not the quantity of money but rather the quality you get for your money. For too long the Cubs have blindly thrown money around and hoped it was enough to get a championship. I for one am happy to see the Cubs actually spend wisely, with a plan for sustained success. The lowering of payroll now is essentially trimming the fat so that when it comes time to wisely spend the money, they will have the flexibility to do it.

    • JasonB

      They’ll spend the money when the team is ready to win. I don’t get why this is so difficult to understand.

  • DocWimsey

    “that whatever “profit” is banked this year will be made available to help the organization down the road.”

    One thing to keep in mind is that *if* the young talent works out, then there will be significant paydays coming up in the not-too-distant future. People keep pointing towards developing your own players as a “key” to success, but it only can produce sustained success if you can afford to keep those players.

    • http://www.bleachernation.com Luke

      Paying up to keep the home grown talent in one way to sustain success.

      Another way is to trade those young players when they have about two years left of major league control and are at the peak of their value for a plethora of talent that can be groomed in addition to your own drafted talent to form the next wave of talent, that in turn will play four of five years for the Cubs and then be moved on for additional talent, etc. Done properly, each succeeding generation of talent should be, on average, better than the previous generation.

      Naturally you’d have to pay up to keep the few players that you really don’t want to trade at all (Castro, for example). But if there is a very good player development system in place, then feeding that system with trades should turn out an overall higher level of production in the majors over time. Tampa has had to do that a little, but they’ve never been able to pair that strategy with any serious dollar investments. Imagine Tampa with an annual $130+ million payroll, and you might be imagining the future of the Cubs.

      • Bart

        Bang on the money. It’s rare that one can consistently offer insight while not becoming defensive when having his or her offerings questioned. The force is strong with this one. Luke – I look forward to your minor writings garnering major interest.

      • Sweetjamesjones

        Well said Luke.

      • DocWimsey

        It’s improbable that such a scheme could yield sustained success simply because it usually turns out that the acquired prospects do not generate much. For example, the A’s tried this model, but not enough of the players that they got in return for Mulder, Hudson and others panned out, and the A’s ceased to contend consistently. Thinking on it, I am unaware of any team that has managed sustained success this way.

        The Rays probably will go this way soon: they won’t be able to afford to keep all of their pitchers. Now, they managed to get HYLee for Garza, but none of the other guys that they got will be playoff-team calibre starters. They’ll be lucky to do that well when it’s time to trade the others.

  • Steve

    AP hit it dead on. This car doesn’t just need an oil change and tires. It needs to be stripped to the frame and rebuilt.

  • CubFan Paul

    Ricketts is cheap. Theo “building” the organization back up is another excuse Ricketts is using not to spend more.

    This team’s annual revenue is north of $250M a year.

    • http://www.michigangoat.blogspot.com MichiganGoat

      Roar… Destroy Ricketts

    • jamiepaul

      Don’t forget the debt payments on the 800 million dollar aquisition….

    • http://www.casualcubsfan.com hansman1982

      You have to remember that Ricketts likes to roll his $5,000 cigars with $1,000 bills so that eats up most of the revenue, never mind that the Cubs have to pay for revenue sharing, debt payments, upgrades in the DR, upgrades in Mesa, paying a GM and manager to sit at home, paying players to be on other teams, rennovations to Wrigley, basic maintenance to Wrigley, Chicago politics, hookers, blow, smack, and everything else that Billionaires like to buy.

      Remember, Billionaires are Millionaires that lived like normal folk.

      • CubFan Paul

        apologist.

      • DocWimsey

        dude, that’s insulting. Rickett’s rolls his cigars with copies of Action Comics #1. The $1000 are for cleaning up after the dog.

        You so could not bluff your way onto the country club……

        :-)

  • Deer

    It’s ok for Year 1, but if there isn’t a substantial increase next year then that $$ should be used for Wrigley renovations

    • TWC

      I don’t disagree with this at all.

      • Brady

        Ah! Double negative! *head exploads*

  • Jeff L

    It’s really risky to put all your hopes in prospects. They’re untested at the major league level. Truly this offseason I would have loved to see the Cubs go out and spend big on Darvish. A young stud starting pitcher. I think adding him and Fielder would have made this team ready to compete for the division. I would be the first to admit that midway in Fielder’s contract the Cubs would be forced to look to trade him to the American League. I really have the same fear as baseballett… Will the Cubs become a mid market team in the third largest market in the US? Will Ricketts only care about his own pockets and not bringing Chicago a long awaited WS? All signs points to thats the way its going to be but we will have to wait and see.

    • http://www.michigangoat.blogspot.com MichiganGoat

      Yeah Ricketts went and spent the money on Theo and Co. because he’s cheap and only wants to line his pockets, or maybe I believe a deeper plan is in place than competing this year. Oh wait wrong post for this positivity… MOAR, Ricky and Theo bad SMASH!

      • Jeff L

        Goat, you could look at Ricketts spent what 15 mil on Theo so that fans like you would be on board with the “rebuilding process”…. Executives don’t win championships the players on the field do. I would take a great player over an executive any day. You have to remember Epstein never won a championship with Boston without the 2nd highest payroll in baseball!!! I think that’s an important fact you shouldn’t forget.

        • http://www.michigangoat.blogspot.com MichiganGoat

          Jeff L welcome back you’ve been missed.

        • CubFan Paul

          Exactly Jeff

        • HoustonTransplant

          You also shouldn’t forget that the situation Epstein stepped into in Boston was VASTLY superior to the situation he finds himself in in Chicago. It’s easier to spend when you’ve got all your other organizational ducks in a row and you only need to spend your way to winning…our ducks are all meandering, wandering hopelessly around, in, and down the street from the pond of success. We have other things we need to do than spend. We can’t spend our way out of the current state of the organization. I have no fears that he/they will spend when the time is right. Why would Epstein suddenly NOT spend like he did in Boston, once the time is right?

          • DocWimsey

            It was not quite that simple in Boston, and it’s not like the Sox strayed under Theo, either. Yes, the Sox were a good team already: they were as far superior to a 0.500 team as the Cubs are inferior to one. However, they were a team with a good shot to win 90 every year, not a team with a good shot to win 100 every year. Theo made some great signings and the farm system under him was superb: the Sox have gotten more wins from their draftees from the 10 years than any other team in MLB, and most of that was under Theo’s watch.

          • Jeff L

            Because owner of the RedSox John Henry had an open wallet for Epstein and Tom Ricketts doesn’t… I think in probably 5 years time when the TV contracts are up with WGN and CSN and Ricketts gets a huge contract with them we will finally see a payroll that can bring a championship to the Cubs. Until then every year tagline will be which prospect is going to have a big year for the Cubs lol

            • DocWimsey

              But, again, look at how successful the Sox farm system has been the last few years, and look at how instrumental that system was already in 2007.

        • DocWimsey

          *sniff* I’ll never forget when that pile of dollar bills morphed itself at the plate and sent that Fuentes pitch deep into the Denver night! (The odd thing was that the bills all had pictures of John Adams, not George Washington…..)

        • Sweetjamesjones

          “Executives don’t win championships the players on the field do.”

          I think this could go both ways.

      • Dave H

        Bring Hendry back! He would’ve signed somebody big! He would’ve gotten us a WS! GRRRRRRRRRRR!

        • Dave

          I am not a Hendry supporter but in all fairness the Cubs had their most successful decade with him as GM since what the 1930′s.
          Three division titles and another two other winning seasons between 2003-2009.
          Isn’t this the type of success we are hoping for under Theo and Co but hopefully with a WS title to show for it?

      • JasonB

        So Fielder and Darvish turn a 74 win team into a 90 win team? I’d love to see the math on this one.

  • deej34

    As a lifelong Cubs fan who just moved to Chicago, lives 4 miles from Wrigley, and plans on going to AT LEAST 40 Cubs games things summer….. I’d like to think that money saved now will benefit us when we are in a position to win. One or two major free agents from the playoffs or hopefully, the series!

  • Andrew

    I think it’s all about positioning for the future, as well. Give the kids a chance to prove they’re ready. Use the extra money to fill in the holes once you know what you actually have, or if you happen to REALLY like what gets developed within the system you use the money to keep these guys.

  • http://www.bleachernation.com Luke

    I read this as the Cubs having $30 million to $40 million per year to invest on key free agents over the next year or two. By the end of this season there should be a young foundation in place, and not coincidentally the Cubs will have dollars available to invest in players around that foundation. In another stunning non-coincidence, the next couple of free agent classes look much stronger than this past class at every position except first base.

    It’s almost like someone fairly intelligent made a long term plan that was based on an understanding of how successful franchises have built up to and maintained long term success and committed to putting that sort of plan in place.

    • ferrets_bueller

      [instant gratification moron]A long term plan?  Whats that! Win Nao, plz!! [/instant gratification moron]

      • JasonB

        And potentially the deepest position just so happens to be the one where we’re probably going to need to fill holes externally (starting pitcher).

    • MichiganGoat

      ROAR, haven’t you heard Ricketts is cheap and all this “talent” and “plan” mumbo jumbo is just to confuse the fan. Until Ricky opens up a 200M payroll there can be no victory. ROAR, ROAR, ROAR

      • Brian

        What? There’s a master plan to keep the fans confused, but no plan for the future of the team! What?

      • ferrets_bueller

  • ferrets_bueller

    People need to realize, the Cubs may be in a large market, but they are not getting anywhere near the money from other revenue streams that other teams are getting, like the Yankees, Angels, Rangers, etc…and wont, until the WGN deal expires.

     

    Also, on another point….what the hell were they supposed to spend on this offseason, anyways?  Overpriced crap?

    • CubFan Paul

      “the Cubs may be in a large market, but they are not getting anywhere near the money from other revenue streams that other teams are getting” -False

      the Cubs are TOP Five in Revenue, only behind the Yanks and Mets (and now probably as you mentioned the Angels & Rangers)

      • http://www.bleachernation.com Luke

        This is the most recent data I could find, and its about a year old.

        http://www.forbes.com/lists/2011/33/baseball-valuations-11_land.html

        In terms of just revenue, Cubs trailed only the Red Sox and the Yankees.  I suspect the Angels have vaulted past the Cubs now, and if the Dodgers and Mets haven’t yet, they likely will before the Cubs are able to rework their TV deals.

        However, those thinking the Cubs should operate just like the Yankees might want to check out the difference in total revenue between the two teams.  That’s $180 million gap is a game changer for New York.

        • CubFan Paul

          thx luke. i forgot about the Sawx. either way Ricketts is pinching pennies

        • baseballet

          Yes, I’m encouraged by the strategy of building a home grown core of players and developing the team patiently, the right way. It could be that that is the explanation for the low payroll this season. My worry is that going forward the Cubs will have a middle tier payroll rather than a top tier payroll. We don’t know for sure if the Cubs will spend like one of the top four or five teams in baseball once the rebuilding gains some steam. I haven’t heard Ricketts say that he intends to do so. I’m hopeful but I don’t take it for granted that that is what he will do.

          • AP

            I hope the Cubs eventually spend like they have the ability to do and I imagine the payroll will increase once the scouting and drafting caps kick in. I also think that if the Ricketts’ choose not to be a big spender like the Yankees and Red Sox, they can still be more than competitive in the NL Central. In fact, they can be the 800 pound gorilla in the NL Central without getting anywhere near other big spending teams. If they do that the right way, they can get in the playoffs every year and once there, the small sample size of the playoffs creates the opportunity to win it all. See: 2001 Diamondbacks.

          • DocWimsey

            Keep in mind that the “right” way to build a team is to get pitchers who prevent runs and batters who create them. There is no “right” way to do that: free agents, trades, farm systems are all tools, but a WAR of 5 from a free agent means the same as a WAR of 5 from a farmhand or from a trade acquisition.

            A separate issue is *keeping* a good team. The only way to do that easily is to spend $$$$. If your farmhands turn into All-Stars, pat yourself on the back and then either break out the wallet or break up the team; if you do the latter, then get ready for a few years (and sometimes decades) of mediocrity.

          • JasonB

            If you haven’t heard Ricketts say this, you haven’t been listening to him talk. He has always said that the cash generated will get reinvested back into baseball operations. Either he intends to eventually use the cash on player salary, or Wrigley is going to have $2 billion in total renovations.

            The guy makes the biggest FO coup in the history of baseball and still doesn’t get any respect from fans.

            • CubFan Paul

              “and still doesn’t get any respect from fans”

              that’s because the on field product in 2011 and now 2012 is shit. -Ian Stewart, no power David Dejesus, Slow Soriano, Gambling on LaHair, Barney, Maholm’s shoulder, the bust known as Volstad, no MLB caliber pitching replacements in 2011 etc..

              he’ll get respect will he purposely fields a winner and not purposely doing the Opposite

  • http://bleachernation.com Tarheel Cub

    Spending does not guarantee winning – period! That point has been proven over and over. Ricketts & Epstein will spend the dough when the time is right. There is a chance we could spend more this year – buying out more dead weight contracts. Sometimes addition comes from subtraction.

    • DocWimsey

      Nothing guarantees winning. However, it has been proven (over and over) that $$$ does greatly increase the chances of winning: year after year, the playoff teams are disproportionately pulled from the high-spending teams. Now, there are myriad reasons why the Cubs have not won a pennant in over 60 years, but their (historically) pecuniary ways are one of them.

    • http://www.viewfromthebleachers.com Norm

      Is anything ever guaranteed in baseball? They may not win – in the sense that “win” = “World Series Title” – but teams that spend money are more likely to be good consistently over a number of years.

      • DocWimsey

        Indeed, it turns into an almost circular argument. There are X big-spending teams. Most years, X-1 of them fail to win a WS. That means that big-spending does not win WS titles because not all of the big-spending teams won that year.

  • http://bleachernation.com Tarheel Cub

    We are by no means spending like bottom feeders…. we still carry signifigant payroll. I agree you have to “pay-to-play” with the big boys, but this is a transition year… implementing new philosophies and pushing out old… and I am not talking money. Now If we don’t jump back into free agency next year, I am gonna be in your corner all the way.

  • brittney

    I think they are holding back some money so they can extend garza (which I am all for) and possibly pulling of a pretty damn good trade or two this year then extending the player(s). Theo and rickettes has something up their sleeve. I’m glad they’re not spending a ton of wasted cash (i.e. soriano, big z ect) when it truely is a rebuilding process. Get your core in line then go spend the cash next season. Maybe the things they’re doin internally to the club will actually sway a player to sign. Those little things do actually help.

  • Benjamin Raucher

    Does this mean another losing year?

    BENJAMIN MARCUS RAUCHER

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