The Cubs’ Advantage in Signing Big-Time Free Agents This Offseason

The Chicago Cubs aren’t really expected to be connected to many of the top free agents this offseason. It isn’t a fun reality to accept, but it’s where the organization is right now.

But it’s worth pointing out that, if the Cubs did want to connect themselves to one of those type of players, they might have a signing advantage held by none of their competitors.

The “top” free agents tend to be the guys who received “qualifying offers” from their former teams – a one-year offer of $13.3 million, which, if declined, ensures that the former team will receive a compensatory pick after the first round of the 2013 Draft, should that player depart in free agency. On the flip side, the team signing that player has to give up a draft pick for the privilege of making the signing. The lost pick, for most teams, is their first round pick. While that isn’t a reason not to sign a guy, it certainly hurts to lose your first rounder.

There is an exception, however, for the first ten picks in the Draft – they are protected, and the teams holding those picks risk losing only their second rounder if they sign a top free agent. The Cubs will pick second in 2013, and the risk of losing a second round pick is far less scary than losing a first round pick.

That means that signing one of these “top” free agents, for the Cubs, is considerably less painful than it would be for 20 other teams in baseball. That gives the Cubs an advantage. And it’s an advantage that lasts this offseason only. (Yes, it could repeat next year if the Cubs are terrible in 2013, but, for this crop of top free agents, the advantage is this year only – next year’s is a whole new advantage.)

Interestingly, of the teams picking in the top 10 next year, only the Boston Red Sox figure to be players for the top free agents. So, for virtually every top free agent out there, the Cubs would have a slight signing advantage over every team but the Red Sox – the advantage being that signing such a player is quite a bit less painful for the Cubs than it would be for the other team.

The question, of course, is whether it is worth the Cubs taking advantage of the, um, advantage. The relative difference between a first and second round pick (say, between the 30th overall pick and the second pick in the second round) isn’t huge, although it is existent. If the Cubs are going head-to-head with the Yankees for a free agent, is that difference enough to make it worth the Cubs spending slightly more than the Yankees are willing to spend? And if so, is it worth inking a big money free agent simply because you’ve got that advantage this offseason? Maybe not.

And the crop of free agents that fall into this category must be considered as well. The eight free agents who received and rejected qualifying offers are Josh Hamilton, B.J. Upton, Kyle Lohse, Nick Swisher, Rafael Soriano, Hiroki Kuroda, Michael Bourn and Adam LaRoche. Several – Soriano, Kuroda, and LaRoche – can be dismissed out of hand because there isn’t a spot for them, or they aren’t coming to the Cubs. Of the remaining five, only B.J. Upton and Nick Swisher make some sense as plausible targets (Bourn is an aging speed guy, which terrifies me, Lohse is in his mid-30s and is coming off a career year, and Hamilton comes with so many unique risks for what he’ll receive). Is Upton or Swisher so valuable that it’s even worth having this relative-advantage-draft-pick-thingy conversation? I could see it either way. The Cubs might not like either player, making this entire discussion moot.

The point, for the most part, is simply this: being terrible in 2012 came with a number of going-forward advantages, designed to aid competitive balance in baseball. The Cubs should be considering all of these possible advantages, even those that are a bit more latent, like this subtle signing advantage.

A parting thought: in December 2010, the Washington Nationals were coming off of a 93 loss season, and the 2011 season was expected to be a non-competitive one (they would go on to finish a game under .500). But, for reasons only they could understand, the Nationals dropped a shocking $126 million on outfield Jayson Werth, signing him for seven years. The deal was laughable, and the Nationals were excoriated for signing it. Two years later, the Nationals were among the best teams in baseball, and Werth put up a 125 OPS+ for an eventual playoff team. Perhaps the lesson of the Jayson Werth signing is not that you don’t ink middling stars to nine-figure deals just because it’s a thin market or you’re looking to make a splash. Perhaps the lesson is: you’ve got to sign Jayson Werth when he’s actually available. Had the Nats waited until 2012 to sign Jayson Werth (or his reasonable facsimile), maybe their 2012 season doesn’t happen the same way. Werth wasn’t the difference between a loser and a winner in 2012, but he was probably the difference between a good and a great team.

As the Cubs look ahead to competitiveness in, say, 2014 or 2015, it’s fair to wonder whether free agency this offseason should be viewed through a similar lens. Nobody’s laughing at the Nationals now.

Brett Taylor is the editor and lead writer at Bleacher Nation, and can also be found as Bleacher Nation on Twitter and on Facebook.

46 responses to “The Cubs’ Advantage in Signing Big-Time Free Agents This Offseason”

  1. MoistassAlou

    Agreed!

  2. Hee Seop Chode

    Kyle is going to love this post.

  3. JoeyCollins

    Does the lost pick go to the players old team or is it just vacated entirely?

    1. North Side Irish

      The pick is lost, but the team losing the FA gets a compensation pick after Round 1.

    2. JoeyCollins

      Thanks. Every time i think i have the MLB draft understood a new rule gets thrown out. I think im starting to get it though.

  4. Spencer

    And the disadvantage is that most every free agent that is somehow lured to sign with the Cubs knows they’re likely to be traded in July.

    1. Chris

      It’s a little harder to trade a guy if you’ve given him a 4-5 year deal, at market value. That’s very different from moving a Maholm or DeJesus contract.

  5. Chris

    Not a fan of Swisher, so the only guy they should consider, IMO, is Upton. And that isn’t a slam dunk for me either. If they were serious about signing Upton, I’d say they’d have to get serious and go after a Greinke and Anibal Sanchez to round out the rotation. These are, arguably, the top free agents out there that are relatively young and could conceivably be here and contributing when the team is ready to turn things around. And signing all 3 maybe means that begins in 2013. Not a likely path for 2013, but I think you have to make multiple moves if you’re subscribing to the practice of signing a guy while he’s available. They have the money and these are the top 3 guys. One costs you a 2nd round pick and the other 2 cost nothing but cash.

  6. lou brock lives

    Swisher is a TOOL & a cancer in the clubhouse. BJ Upton /.298 OBP last year with 169 K’s is right handed hitter & does not fit with stated requirements of our FO team. They want to get more left handed in the OF & at 3B. Look for Coco Crisp & Eric Chavez as your new Cubs for 2013.

    1. Chris

      I was thinking Grady Sizemore for the OF. Chavez on a short term deal would be fine, but I have a feeling he’s going to get better offers elsewhere.

    2. Can't think of a cool name

      Crisp’s OBP is nothing to write home about either.

      1. North Side Irish

        The biggest thing Crisp has going for him is that he’s in the last year of his deal which gives the Cubs time to make a decision on Jackson. That and he’s got truly awesome hair.

  7. North Side Irish

    The advantage should be that they are a major market team selling 2.8M+ tickets a year and can outbid just about everybody. Far more likely that the Cubs hoard their draft picks for another year, add another wave of pitchers to the farm system, and make the big FA splash after next season. Then hope the 2014 pick is no longer in the Top 10 because they are finally on the upswing and we can all complain about losing the #18 pick.

  8. Chad

    This is a great point with Werth. I think if the cubs could sign a guy like Upton (not sure what it would take) to a 5 year deal for example, they should front load it. That way when Soler or Almora are ready they can trade Upton and his contract wouldn’t be a deterrent for other teams that are interested.

  9. BluBlud

    I used what Washington did in a post the other day. The Cubs need to take advantage of what they have in front of them right now. Sign 1 or 2 this year, 1 or 2 next year and you never know what might Happen.

  10. Kyle

    *squee* I love you too, Brett.

  11. BD

    I am not sure how the market for Hamilton will play out, but getting him on a shorter deal is the best option available in that list. I would even sign him for as many years as Upton- that’s how little I think of Upton. I know the potential is there, but just seems like one of those guys who never quite makes it.

    (What am I talking about? That fits perfectly with Cubbie history)

  12. hansman1982

    “going-forward advantages”

    GAAA CORPORATE BUZZWORDS

  13. cubs85

    cubs just sign scott baker.

    1. cubchymyst

      some good news on the rotation front

      1. dw8

        This is the boringest free agent signing ever. I’m not saying I don’t like it either. I kinda do. But, it’s real boring.

    2. North Side Irish

      I believe the press release actually says “Cubs sign Scott Baker to a one-year deal so they can flip him at the deadline if he’s healthy”.

      I like the signing because it’s got some upside and the downside is limited to money. Still need two more SPs who are healthier than Baker though.

  14. baseballet

    BJ Upton and Swisher are basically 4 WAR players (although Upton dipped last season to 3.3–the same WAR as Starlin Castro). Upton turns 29 years old next season, and Swisher will be 33. For comparison DeJesus had a 1.7 WAR. Upton is young enough and has power and speed, so I suspect the Cubs will try hard to get him.

  15. DocPeterWimsey

    in December 2010, the Washington Nationals were coming off of a 93 loss season, and the 2011 season was expected to be a non-competitive one (they would go on to finish a game under .500).

    Actually, there were a lot of people who said that the 2011 Nats were an “if everything goes right” team: i.e., they were a 0.500 team that could be competitive with a little luck. That got a lot of attention in the DC area (obviously!) and that Nats tried pushing it in their advertisements with comparisons to the ’08 Rays.

    Most of those same people were also saying that the Nats really were a year away from being truly competitive. Oddly, that got left out of the 2011 promotional campaign: I guess that would have been “or maybe the ’07 Rays!” plugs! Still, it was a pretty accurate prognostication.

  16. SalukiHawk

    Is there a certain date after which compensation is no longer an issue? I’ve always wondered what if not one single team ponies up for say Rafael Soriano because they don’t want to give up even a second round pick for a meddling relief pitcher? Is this player just SOL or is there a certain date after which compensation goes away?

    I was thinking this was going to happen with Carlos Pena last year and I’m sure it almost did if it weren’t for the Rays rescuing him.

  17. fortyonenorth

    I read an article yesterday about the Dodgers spending-spree. The author (maybe it was Morosi) pointed out that the Dodgers are spending precisely how they should be spending. That is, as the top team in the #2 market, right behind the Yankees. If you agree with that thinking, you can see where the Cubs should be spending like the top team in the #3 market. I totally get what Theo’s trying to accomplish, I just don’t think–given the prosperity of MLB, influx of TV cash, etc.–why we need to live like paupers. It’s like Theo lived through the Great Depression or something. Stick the cash under the mattress and hope for the best. I’m not saying his strategy won’t work. It’s just that, I don’t think it has to be as painful as he makes it out to be, e.g. “There are no shortcuts….”

  18. Fastball

    41 I agree. I agree with signing BJ Upton now. I hate Swisher!

  19. Darwin Fred

    Quick and quite possibly a stupid question, but if you sign one of the top free agents and you lose your 1st ( or in the Cubs case, 2nd ) round pick, do you lose the allotted/slotted money for that pick also? I would assume so, but if not, that actually would help you to overslot other picks. I know I’m just whistling in the dark here, but thought I would ask.

    1. Kyle

      Yes. You lose the slot money as well.

  20. dan

    So with this advantage would it be possible to use this advantage to hold up a team like Texas on a for a favorable minor leaque trade if we stayed away from a guy ike Hamiton so they did not get just get a secound round pick?

    1. Cubbie Blues

      Should the 2012 Chicago Cubs use their advantage in the 2012 free agency to their advantage in 2012?

  21. Mike Taylor

    I think we should sign Josh Hamilton. Forget about the risks involved for the moment and consider a 6 year, $160M guaranteed deal, 7th year club option w/buyout. We have the money now and the advantage Brett was referring to is all about timing (which we have as well). The Nationals capitalized on that and signed a big bat. It helped boost them into the playoffs. Hamilton makes our lineup that much better. We lost a lot of one-run games last year and having a threat like that in our lineup helps eliminate those.

    Imagine the Isolated Power in the 3-4-5 slots in 2014 (since Soler projects to be a Giancarlo Stanton-type that hits better, I’m really excited about 2014; plus James Shields will be a free agent)! There’s no pressure to win next year, which should help Josh tremendously with his mentality. Some say it’s too big of a risk, but with roughly $55M in payroll currently (Scott Baker included), Anibal Sanchez (15M AAV) and Josh Hamilton (25M AAV) would put it at a respectable $95M and competitive (and we can then forget about our current 3B woes and make it that much easier to wait on our future there).

    –2013–
    RF DeJesus (L) / Sappelt
    SS Castro
    CF Hamilton (L)
    1B Rizzo (L)
    LF Soriano
    C Castillo
    3B Valbuena (L) / Vitters
    2B Barney

    –2014–
    CF Jackson (L)
    2B Baez
    LF Hamilton (L)
    RF Soler
    1B Rizzo (L)
    SS Castro
    3B Vitters
    C Castillo

  22. ruby2626

    Although we are the #3 market I doubt seriously if our revenue stream despite outrageous ticket prices is 3rd. We’re getting way below market value for our broadcasting rights and that CSN contract doesn’t expire until 2019 or close to it. I heard the Angels got a ton for their broadcasting rights and promptly went out and signed Wilson and Pujols, can only imagine what the Dodgers get. Really hope we have an out clause in our contract be great to bring in more cash for the payroll.

    1. Frank

      According to an article on Bleacher Report (I know), the Cubs rank 6th in revenue, behind the Yankees, Red Sox, Phillies, Mets and Angels.

    2. Kyle

      After the 2011 season, Forbes estimated the Cubs’ revenue at precisely No. 3 in baseball at $266 million. We were $17 million ahead of No. 4 and $33 million ahead of No. 5, so it’d be pretty stunning if we fell too far.

      Don’t let anyone tell you different: The Cubs draw in a metric ton of revenue. They like to cry about how small Wrigley is and how little signage there is, while glossing over their epic merchandising, high ticket prices, extremely solid season ticket-holder base, and the fact that they literally have people paying them to watch the game from outside the stadium (the rooftop deal). Oh, and did I mention they have one of the only spring training operations that brings in revenue?

  23. Billy Price

    My sense is Epstein and Co. are just biding time and instructed to save money as their primary goal. They will use the smoke and mirrors of building the farm system, but really they are only interested in a dictum from Ricketts that says we just paid near a billion for this thing and until we build some equity, you guys (FO) need to sit on your hands. They pillaged the team in the name of prospects and did not get any real value for the things they gave up.

    Their signings were directed, in their words, to use as bait for mid seasons prospects. Their handling of moving Dempster was like the Monkey and football scenario we have all heard about.

    When Theo had Boston money to spend, they were almost like the genius crew in the Bronx but he left a mess there and he is building a bigger one here.

    Not a fan of deception and misdirection and this guy is a maven when it comes to both.

  24. Gary Mueller

    The Cubs might actually have a decent rotation in 2014. If you keep Garza, Shark and Wood, then add in Vizcaino and draft Appel that is a pretty decent rotation. So I would expect 2014 to be the season the Cubs start to turn it around. So the question is are there any FAs who would help the offense in 2014? Swisher and Hamilton are a little old. Upton is intriguing with his power and speed, but his downsides are the OBP and that he is right handed, just like Soler and Almara. I am guessing Upton would rather play with the Braves right now anyway. I do like the idea of signing Melky Cabrera as a stopgap in CF. As far as the hole at 3B goes, it looks like Stewart will get one more chance, but I would bring in Casey McGehee to platoon. Then just keep my fingers crossed that Jackson and Vitters develop enough to contribute in 2014.

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