Chicago Cubs 2016 NL Central Championship Gear

wallet cashAlthough you can always leave yourself open to being pleasantly surprised, I’d like to encourage you to adjust to the financial reality of the Chicago Cubs’ situation right now: payroll will continue to be relatively low for the near-term future.

We’ve discussed it at length over the past seven months or so, and I think most attentive Cubs fans have understood this to be true for a while now. Going back to February, team owner and chairman Tom Ricketts explained that the $135 to $145 million payrolls of the late Tribune era were “unsustainable,” suggesting that the Cubs are affording what they can right now (which, at the time, looked like a payroll in the $95 to $110 million range). From there, a great deal of ink was spilled on the subject of Cubs finances, and whether the Ricketts Family was living up to its pledge to put every dollar that comes in the door right back into the organization.

By the end of April, we had a pretty good sense of what was what: every dollar of revenue the Cubs generate (revenue that is falling along with attendance) is going back into the organization after taxes and ownership’s debt service payments. With revenues on the way down, however, and debt service payments added to the picture (not to mention a stadium renovation to pay for), payroll was bound to decline, even if baseball operations was using every dollar allocated to their department.* The big payroll dollars weren’t going to come, it seemed, until after the Wrigley Field renovation was well underway and a new TV deal had been negotiated (hopefully the portion that expires after 2014, not just the portion that expires after 2019).

*In many instances, wisely: don’t forget that baseball operations has overspent on the last two drafts, hugely overspent in the international free agent market this year, expanded the salaried staff in the front office dramatically, acquired advanced data systems, upgraded minor league facilities, and helped build a state-of-the-art facility in the Dominican Republic.

Though we shouldn’t have needed any further confirmation that payroll could be relatively lean for a little while, President of Baseball Operations Theo Epstein offered it in an interview on The Score this weekend. The entire interview is worth a listen – it ranges in topics from specific players, to overall progress, to minor league developments, etc. – but the comments I’d like to highlight are as follows:

We are clearly taking the long view here. It is the right thing to do. Some of it is out of necessity, frankly, because we simply don’t have the payroll flexibility that we would need for a quicker talent infusion given some of the limitations and timing of our business plan and the realities of a lot of circumstances surrounding the ball club right now. We need to take the long view. It is not easy. I do enjoy the scouting. I enjoy the draft. I enjoy the player development part of it. I enjoy the young players, I believe in young players. But in an ideal world we would be doing both. We would be infusing a lot more, sort of ready talent in this situation, to speed up the clock a little bit with Major League players. We don’t have that luxury right now.

From there, Epstein goes on to note that, although the plan is to spend more money in free agency in the coming years, that is dependent on the renovation and TV deal(s) coming through as revenue-drivers.

I’ll grant a moment for you to put your hands in your pockets and kick some rocks.

Epstein saying that the baseball operations team does not have the money available to help speed along the rebuild at the big league level is the real bummer. The mere fact of saying it implies that there are or have been big league moves out there that he believes would align with The Plan, but that they cannot make or have not made because of a lack of money. The ability for this front office to sign anyone they believe is worth signing is probably not there right now. That stings.

That said – hands out of pockets, feet at attention – I’m not going to become too despondent for a handful of reasons.

First, given the money coming off of the Cubs’ books in the last year or two, a $100 million payroll isn’t going to cripple the front office. A quick and dirty review of the Cubs’ payroll obligations for 2014 – including generous arbitration raise estimates, and completely ignoring the $13.65 million the Cubs saved this year in trades – puts the organization somewhere in the $62 to $65 million range. Even if payroll is cut further to $90 million, that’s still $25 million to work with in improving the 2014 big league roster.

Second, even in the face of falling payroll and budgetary restrictions, it’s not like the Cubs weren’t able to go out and spend last year. Edwin Jackson was actually one of the bigger free agent signings of the Winter. The Cubs also committed more than $20 million to Scott Feldman, Scott Baker, and Kyuji Fujikawa. The Cubs signed Starlin Castro and Anthony Rizzo to extensions. These are guaranteed dollar commitments that could have waited if the only motivation at play was saving money in the short-term. This is all to say: there is money available to be spent. It isn’t Yankee or Dodger money – hell, it probably isn’t even Oriole or Giant money right now – but contracts can be signed.

Third, the 2014 free agent class is extremely weak, and likely wasn’t the way for the Cubs to improve their near-term roster anyway. You don’t just start spending like crazy because you want to bring payroll back up. You spend when it makes sense to spend, regardless of where payroll stands. This offseason, other than a player or two (Choo? Tanaka?), I’m not sure I see where it makes sense to spend big bucks.

Fourth, I really can see the synergy of the business and baseball plans that Epstein describes. Even if I’d prefer that the Cubs were competitive sooner rather than later – I have written about a terrible team every single day for almost five seasons now – I’ve always been on board with the rebuild. I can see the fruits of that effort down the road, and I can see when it’s going to make sense to spend big. It doesn’t look like 2014 is going to be that year (a season in which I’ve always said I hope to see a team that looks like a .500-ish team on paper going into the season), but we could see some real traction by 2015 from the farm system. That doesn’t just mean players breaking through in the bigs, but it also means trading duplicative pieces for Major League players. And, going into 2015, the Cubs will have secured a new TV deal for the portion of games currently airing at a bargain rate on WGN, and the renovation will have (hopefully!) reached the point where a couple large, revenue-generating signs will be going up in the outfield.

From there, a window opens where revenue begins to increase alongside a more competitive team. That, in turn, drives more attendance, and more revenue. That, in turn, drives more payroll flexibility … just at the time when it becomes the most important, on the opening of a long-term competitive window.

None of this is to say it is time to check out until 2015. Because I remain optimistic that the front office, with the resources afforded them, can put together a .500-ish team on paper going in 2014 (it’s easy to forget how close this year’s team was to being a .500-ish team in the first half, given the underlying metrics), you never know what could happen in the next 8 to 12 months. Maybe Starlin Castro turns it around at the same time Anthony Rizzo really breaks out. Maybe the one or two offseason additions are huge boons to the team. Maybe Jeff Samardzija fulfills the promise of ace-dom, and the rest of the rotation pitches as well as it has, generally, this year. Maybe Javier Baez really is ready by midseason. Maybe Kris Bryant is, too. The ability of the Cubs to spend big money in 2014 on payroll is not going to be the primary deciding factor in that team’s competitiveness.

If the Cubs sit out the spending this Winter, I’m probably not going to be too upset, given the reality of the financial situation, the reality of a weak free agent class, and the reality of various timelines.

Instead, I will continue to follow the renovation and TV deal story lines with as much vigor as ever. Because, even as I say that the ability of the Cubs to spend big money in 2014 on payroll is not going to be the primary deciding factor in that team’s competitiveness, I do recognize that, long-term, teams that can spend money tend to make the playoffs more consistently than teams that cannot.

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