Yet Another Report Suggests Cubs Won't Be Blowing Past the Top Luxury Tax Tier

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Yet Another Report Suggests Cubs Won’t Be Blowing Past the Top Luxury Tax Tier

Chicago Cubs

As you likely know by now, the Cubs’ decision to pick up the Cole Hamels option for 2019, even after the trade of Drew Smyly, left them in a precarious position vis a vis the luxury tax. The moves left the Cubs with a currently-projected $226 million payroll for 2019, which is right at the second tier of the luxury tax, and $20 million shy of the top tier ($246 million), at which, in addition to the draft-related consequences and tax that you get for going into the luxury tax zone at all, you also get your top draft pick knocked back 10 spots. Considering in-season flexibility and bonuses accrued, the Cubs might have only another $10 million in offseason flexibility if they’re determined to stay under that top luxury tax tier.

To that end, we’ve been hearing rumors flying like mad in the last few days about the Cubs’ financial limitations, none of which should necessarily be shocking against that payroll backdrop, but which do strongly suggest that staying under the top luxury tax tier is going to be a goal for the Cubs.

And, to that end, another log for the fire:

As we’ve said, the only way the Cubs could manage a Harper or Machado pursuit after picking up the Hamels option is if they traded some salary OR if they were willing to blow out the top luxury tax tier. So, again, I’m not necessarily surprised by this report, but I do have some concerns. Ownership has long indicated that it will put back revenues, after expenses, into the organization. So either that is no longer going to be the case, or they are not anticipating monster revenues next year.

Either way, the consistent reporting right now – when synthesized – strongly suggests that the top luxury tax tier ($246 million) is something of a hard cap for the Cubs this offseason. If you’re the hopeful type, right now, you’re thinking this is intentional misdirection by the Cubs’ front office. If you’re the pessimistic type, right now, you’re thinking revenues are expected to be down, and/or ownership is not going to allocate all of the residual revenue after expenses for baseball operations as had been the previous practice.

One thing a lot of us will keep coming back to: if the Cubs absolutely could not possibly go over the top luxury tax tier, it was something of a … bold … decision to take on $20 million in AAV for to add to a rotation that had six arms in it. This front office is certainly bold, but one thing it is not is foolish. Perhaps they saw Hamels as much more critical to 2019 than another significant bat, or they felt they could improve the offense in more cost-effective ways than protect the rotation.

I’m content for today to let the offseason continue to develop before passing judgment. So much can change between now and April.

I think it’s fair to say in advance, however, that generational talents in their mid-20s become available in free agency only so often. If you miss your window to grab one – or even just seriously compete to sign one – because of an artificial restriction on spending, fans don’t forget that kind of thing. Moreover, quality contention windows don’t last forever, and are sufficiently special that they must be seized upon as strongly as possible when they do come.

Again: plenty can change this offseason, and rumors are just rumors. But the Cubs’ revenues will come under even great scrutiny than usual, depending on how the offseason plays out.



Author: Brett Taylor

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