Are the Cubs Going to Be Willing to Exceed the Luxury Tax Next Year? Strong Signs Point to Yes

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Are the Cubs Going to Be Willing to Exceed the Luxury Tax Next Year? Strong Signs Point to Yes

Analysis and Commentary, Chicago Cubs Rumors

In 2016, after two offseasons of aggressive spending and a trade deadline with a significant pick-up in Aroldis Chapman, the Chicago Cubs exceeded the luxury tax threshold for the first time. Money is of considerably less concern when you’re a major market club looking for its first World Series win in 108 years.

After a much quieter offseason in 2017, the Cubs stayed under the luxury tax threshold last year. That happened mostly organically, but it was not without considerable consequence: with the new Collective Bargaining Agreement’s transactional terms kicking in, exceeding the threshold last season would have cost the Cubs draft pick position when losing Wade Davis and Jake Arrieta, and would have increased the costs associated with signing a qualified free agent if the Cubs went that route.

For 2018, the Cubs – like so many other clubs – have looked again to stay under the luxury tax threshold, presumably in part knowing that they might pursue a qualified free agent or two next offseason in that blowout class. If you’re a large market club over that cap, signing a qualified free agent costs your second highest pick, your fifth highest pick, and $1 million in international free agent pool space (compared to just the second highest pick and $500,000 in IFA money if you’re under that cap).

But, even acknowledging the wisdom in the Cubs’ planning (at present, they have about $5 to $10 million in wiggle room under the luxury tax threshold for in-season moves), there hasn’t been anything to definitively tell us that the Cubs will be pursuing qualified free agents next year, nor that they will go over the luxury tax threshold that time around. Sure, we can do some intelligent speculating based on the additions the Cubs have made and the continuing arbitration raises that are coming, but outside of Theo Epstein saying that the Cubs would still have the flexibility to make a big move next year if a truly impactful player wanted to come to Chicago (*wink wink, nudge Bryce, wink wink*), there wasn’t nothing hard-and-fast to point to that said, yes, the Cubs are perfectly willing to go back over the luxury tax cap (which increases from $197 million to $206 million).

I won’t tell you we now have something quite that definitive, but this quote from Theo Epstein to Patrick Mooney is pretty darn strong (emphasis added): “You have to look at these things from short-term and long-term perspectives. One of our goals was to put the team together this year in a way that would maybe allow us to reset under the CBT threshold. Going forward, we think that made sense in the big picture for us.”

“Reset,” eh? “Going forward,” eh?

Those comments from Epstein are extremely consistent with an organization that knows they’re very likely to go over the luxury tax in the near-term. Again, strictly speaking, the Cubs had already reset in 2017 (so 2018 being under the cap would be less of a reset than a continuation), but if they could stay under it again this year, they might as well, since the financial penalties increase each consecutive year over the cap.

(Photo by Jonathan Daniel/Getty Images)

In other words, it was already reasonable to surmise that the Cubs were planning on the possibility they might exceed the luxury tax cap next year based on where they were in payroll this year, who they’ve already signed, and what raises are going to be coming. But now you’ve also got Theo Epstein all but conceding that staying under the luxury tax cap this year was a goal with future years over the cap in mind.

So, if you want to dream about the Cubs playing around in the deep end of the free agent pool next year, yes, it’s still reasonable to dream those dreams.


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Author: Brett Taylor

Brett Taylor is the Editor and Lead Writer at Bleacher Nation, and you can find him on Twitter at @BleacherNation and @Brett_A_Taylor.