We’re redux-ing an exercise we performed at the outset of the offseason. Namely, seeing where things stand financially for the Cubs in 2015, now that we know a whole lot more about the spending picture. The purposes back in November for doing this were tied mostly to “how much can the Cubs spend from here?”, while the purposes now are tied mostly to “how high are the Cubs pushing the payroll at this point?”
Most of the big signings are completed, and most of the arbitration cases are settled. So, away we go …
Chicago Cubs 2015 Commitments
Guaranteed Contracts (via Cot’s Contracts and other published reports, rounded where appropriate):
Jon Lester – $15 million*
Miguel Montero – $12 million
Edwin Jackson – $11 million
Jason Hammel – $9 million
Starlin Castro – $6.9 million
Travis Wood – $5.7 million
Anthony Rizzo – $5.3 million
Jason Motte – $4.5 million
Tsuyoshi Wada – $4 million
Jake Arrieta – $3.6 million
Jorge Soler – $2.7 million
Chris Denorfia – $2.6 million
Chris Coghlan – $2.5 million
David Ross – $2.5 million
Welington Castillo – $2.1 million
Felix Doubront – $1.9 million
Ryan Sweeney – $1.5 million
Gerardo Concepcion – $1.2 million
Jacob Turner – $1 million
Kyuji Fujikawa – $500,000 (buyout)
*(Although the AAV of Lester’s contract is $25.833 million, it has a very unique structure, including a huge signing bonus, $15 million of which was paid in 2014. So, technically Lester receives only $15 million from the Cubs in 2015, which is his salary for the year. That skews the payroll picture quite a bit, but that may have been the point (i.e., preserving financial flexibility in the 2015 payroll).)
Arbitration Eligible Players (midpoint of salary requested and salary offered):
Dexter Fowler – $9.7 million
Pedro Strop – $2.5 million
You also have to account about $10 million for other players on the 40-man roster and health insurance benefits.
Total: $117.7 million.
Prior to the offseason, I pegged the Cubs’ upper limit at about $110 million in 2015 payroll, up from about $90 to $95 million spent in 2014, based on a variety of assumptions about the baseball-related spending that current revenue levels could support.
Even then, I admitted I was being conservative, but I also wanted to account for the front office likely wanting to leave in some flexibility for mid-season additions or international surprises. We’ll see if the Cubs pare payroll from here by dealing guys like Castillo, Wood, and/or Jackson. If not, and if the Cubs enter the year at a payroll level higher than I’d suspected, well, I mean, that’s definitely one time I’d be more than happy to be wrong.
As for whether there’s room to make a significant addition from here (in terms of payroll cost), I doubt it. The Cubs are likely to see healthy revenue gains this year, but I’m not sure that is going to make an impact on the baseball operations side until it’s quite clear that those revenue gains are actually coming. Consider that attendance is probably going to be up – and the Cubs are more sensitive to revenue fluctuations tied to ticket sales than most teams – and there are many new corporate deals in place, but the 2015 bridge TV deal probably isn’t going to net a huge amount of additional revenue over 2014. Further, any additional revenues tied to the renovation efforts may not be entirely clear until later in the process.
(For more on the Cubs’ financial picture, and why expenditures are artificially limited right now, see last year’s detailed analysis.)
One other big thing to consider: payroll isn’t the only expenditure for baseball operations. The Cubs are rumored to be blowing their international budget again this July, which would mean more spending on the amateur side when compared to 2014.
That is all to say, while I’d expect payroll to increase again in 2016 from these levels, I suspect the Cubs are close to their 2015 limit for now. The best guess here is that they look to trim a little, and then “leave some powder dry,” as they like to say, for possible midseason moves.