NEWSLETTER
Last week, in between stops at the Fourth of July parade with the kiddos and the place where the fireworks were going to be (but which we couldn’t actually stay for because, like, kiddos – they had corn dogs and a dog frisbee catching contest, so it was fine), I wrote a long piece about the Chicago Cubs’ international spending proclivities.
The piece – which was kindly shared by Grantland’s Jonah Keri this morning – detailed an approach that the Cubs could be taking, in which they wantonly blow past any and all spending restrictions with an eye toward accumulating a massive infusion of young talent this year, before trading away pool space next year for further assets. It’s broken down a good bit from there, but, given a report today from Jesse Sanchez, it could be even more timely today than it was last week.
Today, Sanchez reports that Taiwanese pitcher Jen-Ho Tseng, a top 30 prospect in this year’s class to both Baseball America and MLB.com, is garnering a lot of attention and could sign for at least $1.5 million. He’s a big 18-year-old kid who is already mature as a pitcher, and is a well-known commodity in the scouting community. The Cubs, Sanchez says, are the favorite.
Yes, you’re instinct is correct: adding Tseng to the guys the Cubs have already reportedly agreed to sign would put the Cubs right up against the largest penalties the CBA levies for overspending in the international market. In other words, you could certainly see the Cubs’ aggressive pursuit of Tseng as a sign that, yes, they’re planning on throwing the spending restrictions out the window this year, and making the best of what that means for their 2014-15 class.
That all said, Sanchez isn’t so sure that the Cubs are going to blow so far past their spending pool as to incur the stiffest of penalties. He points to the fact that the Cubs haven’t yet officially inked Jimenez as evidence that the Cubs are going to try and stay within some limitation, which is a very fair point (if the Cubs were just going to blow it all out, they’d sign Jimenez now, and deal with the consequences later). Although I can see an angle where blowing past the budget is a laudable strategy, Sanchez could see the Cubs getting almost everyone they want and still avoiding the worst of the penalties, as he hints in a recent article at MLB.com. Then again, depending on how the final signing bonuses add up, Sanchez also notes today on Twitter that the Cubs could slip into the max penalty range (at which point, they might as well just go nuts). The story is a fluid one, and is among the more fascinating things to follow in the Cubs’ world right now – and that’s in a month with trades, Draft signings, and more.
Circling back …
So long as the Cubs do not exceed their spending pool by more than 15%, they will not face the most serious penalty: a 100% tax on the overage plus the inability to sign anyone next year for more than $250,000. Instead, the penalty – if you fall within the 10% to 15% overage range – is a 100% tax on the overage plus the inability to sign anyone next year for more than $500,000. With the Cubs expected to have a large pool again next year, that is a much more manageable penalty (but would still leave the Cubs with the intriguing optional approach of trading away pool space for players/prospects).
Where, then, do things stand assuming the Cubs ink all of the deals that have been reported?
Eloy Jimenez – $2.8 million
Gleyber Torres – $1.7 million
Jen-Ho Tseng – $1.5 million
Jefferson Mejia – $850,000
Erling Moreno – $800,000
Yohan Matos – $270,000
That’s a total of $7,920,000. The Cubs’ pool currently stands at $5,520,200 after considering the trades they’ve already made to add pool space. Per the CBA, the Cubs can add up to 50% to their original bonus pool ($4,557,200), which means they can increase their pool to a maximum of $6,835,800. A 14.999% overage yields a total of just $7,861,100.
In other words, if all of the reported signings go down as they have, and if the Cubs give Tseng $1.5 million, they’ll fall into the most severe penalty range even if they add the full 50% increase.
What does this mean? Well, as long as the Cubs are OK with paying the overage tax – it’s just money – then, if they want Tseng or any other headliners left in the class, the Cubs are going to have to blow their cap completely. And if they’re going to blow their cap by a tiny bit to get Tseng, they might as well go nuts on anyone else who’s willing to sign.
That all said, the numbers are so, so close here that a small discrepancy in the reported signing amount and actual signing amount could make the difference between a 14% overage and a 15% overage. For example, this morning, Sanchez tweets that Erling Moreno is actually getting just $650,000 from the Cubs, contrary to the original reports of $800,000. That $150,000 difference would actually take the Cubs back into the under 15% penalty range. Then again, Sanchez said that Tseng was getting “at least” $1.5 million. If he goes well over that, then the calculation goes back out the window. (I’d guess that, on many Asian prospects like Tseng, there aren’t the same kind of semi-pre-arranged deals as there are in Latin countries. That is to say: his price could vary in ways we don’t see with Latin prospects by the time they sign.)
If I were you, I wouldn’t get too hung up on the math just yet. The point of this exercise is only to say that the Cubs are heavy on Tseng, and, if all the other signings go as reported, being heavy on Tseng could be further evidence that the Cubs plan to blow the budget this year. Whether it plays out that way, we’ll have to see.
