When the Chicago Cubs designated catcher Miguel Montero for assignment last week after comments he made about pitchers struggling to hold runners, it was a given that he’d wind up on some other team. Despite his throwing woes, he’s still a capable lefty bat, calls and receives a good game, and, when he’s not stirring the pot, he’s a solid veteran back-up.
The real question was whether the Cubs would be able to trade him for anything of value after the harried way he was off’d the roster.
The answer came today as a resounding “Uh, kinda.”
The Cubs traded Montero and cash considerations to the Toronto Blue Jays for a Player to Be Named Later or cash considerations (Sharma).
Here’s the thing about this trade: we don’t really know if the Cubs got any value yet.
I say that not only because PTBNLs are, by definition, unnamed at the time of the trade, but also because we don’t know how much cash is involved going in each direction. For the Cubs, that could be huge. (SEE UPDATE BELOW. Original post remains.)
Montero was making $14 million this season in the final year of a deal he signed with the Diamondbacks, and is owed about $7 million for the rest of this season. It’s possible the Cubs covered all of that salary, and there are no real financial implications here.
If the Blue Jays are paying some of Montero’s salary, though, the Cubs can realize some luxury tax benefits here. (We’ve yet to run into this situation in the new CBA era, so it’s possible I am misunderstanding a portion of the rules here. They’re new. I did the best I could here on the fly this morning – but I think I’ve got the gist. As more info comes out on the money in the deal, I’ll revise if I learn that I’m mistaken. Back to the math.)
The AAV of Montero’s current contract is $11 million, half of which was going to count against the Cubs’ luxury tax calculation for 2017 as of this moment … unless the Blue Jays cover most or all of Montero’s remaining salary for this year. In that case, the Cubs’ luxury tax cap payout for Montero in 2017 would be only about $4 million … even though they’ve already paid $7 million in salary for him this year. Good deal, eh?
We know that the Blue Jays are not covering quite all of the salary though, as the reports indicate that the Cubs sent some cash in the deal. In that case, even if the Blue Jays are paying less than half of $11 million ($5.5 million), the Cubs will still realize those savings – however much the Blue Jays are paying – against their 2017 luxury tax number.
All of this is significant because, as we’ve discussed before, the new CBA imposes significant baseball-related deterrents for going over the luxury tax, including worse draft pick compensation and a steeper cost for signing qualified free agents. The Cubs are not going to want to be over that cap this offseason.
So then, if trading Montero saved a little luxury tax space, the Cubs can perhaps be a little more aggressive in taking on salary this trade season.
As for the PTBNL or cash, it’s rare that the player group from which the Cubs are choosing is notable if “or cash considerations” is appended. I would not expect it to be a significant player, if the Cubs get a player at all – perhaps a low-level, older prospect with a middle reliever ceiling or something like that. If the Cubs did cover all of Montero’s salary in the deal, then you might see that the PTBNL group is actually a bit better than usual. My guess, though, is that, given the luxury tax implications, the Cubs’ preference at this time would have been to save some on Montero’s salary.
UPDATE: The Cubs are picking up most of the freight:
No surprise: #Cubs picking up vast majority of Montero’s ~$7M salary. Would have owed all but pro-rated minimum if they had released him.
— Ken Rosenthal (@Ken_Rosenthal) July 3, 2017
The floor on how much the Blue Jays are paying is about $270,000, or half the Major League minimum. It’s entirely possible that’s all they’re picking up right now, and the “or cash considerations” chunk is a decent amount that will have to be decided upon before the Trade Deadline (so the Cubs will know how much space they have to play with).
Or, as discussed above, it’s possible the Cubs weren’t able to get any real luxury tax savings here, and instead merely opted to get the best list of PTBNLs they could (which, again, I still would not expect to be a tremendous group).
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