Turns Out, the Cubs Always Knew Financial Limitations Were Coming

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Turns Out, the Cubs Always Knew Financial Limitations Were Coming

Chicago Cubs

I appreciated this read from Barry Rozner at the Daily Herald, which features many more quotes from Theo Epstein that really capture the essence of what is going on this offseason for the front office.

It got me thinking more about The 2020 Plan, why the Cubs have taken this approach, why they have failed so far, and more.

Among Epstein’s comments (emphasis added): “[Sometimes] you know going into an offseason – or a period of the CBA – that you’re going to be really aggressive, that you’re going to acquire through trade or free agency some big-name players, and you’re going to be lauded, hopefully, not just in the offseason, but when your team wins. You’re going to be well thought of . … There are going to be times when you have to get rid of guys maybe a year before people think you have to, or you’re gonna have to reset the roster, or you’re going to run out of financial flexibility and be less active for a couple seasons, and you know you’re not going to be as well thought of.”

That is where things are now for the front office, but according to Epstein, they knew this was coming for a long time, even as far back as 2017, when the new Collective Bargaining Agreement began. And it’s not just because arbitration players would be getting expensive around this time – it’s also because of that Collective Bargaining Agreement.

More from Epstein, via Rozner (again, emphasis added): “We knew once this CBA came out there would be some real challenges toward the end of it for big market teams that had developed a lot of good players getting more expensive through arbitration, had added free agents on top and had won …. The moment this CBA came out, we knew ’20 and ’21 were going to be times people would be scratching their heads because we wouldn’t be able to squeeze any other talent onto this roster.”

Although we’ve been able to extrapolate that from the outside – we’ve discussed at length why teams under the current CBA are going to do everything possible not to exceed the luxury tax three consecutive seasons – it’s the first time anyone associated with the Cubs has explicitly connected their transactional limitations specifically to the CBA. It’s nice to hear the confirmation, even if it is no less maddening.

Many of us who’ve reviewed the CBA closely have come to the conclusion that it was absolutely DESIGNED to prevent big market teams from staying over the luxury tax for more than two consecutive years. Yes, you can do it – you’re permitted! – but the financial consequences become enormous in that third year. It is sold as competitive balance, of course (the luxury tax is actually called the “Competitive Balance Tax”), but it is at least as much about MLB and owners ensuring that one or two organizations don’t take salaries on a runaway train. It was a terrible, terrible setup for the players to permit into the CBA, and you can be sure this de facto salary cap is on their radar for the upcoming contentious negotiations.

So, then, the implication here is that, as the Cubs lived in this CBA world and projected out when their homegrown players were going to become the most expensive, they could already see that 2020 and 2021, at least, would correspond with multiple times over the luxury tax.

At some point, they knew they were going to have to reset.

Against that backdrop, of course, you could say the front office comes in for fair criticism for failing to extend any of their young positional core on manageable deals or for failing to really hit home runs on enough of their big free agent signings … but the flip side there is that some extensions might not actually have helped the luxury tax situation, and every big free agent signing is a risk.

Still, those failings combined with nothing yet accomplished to infuse the organization with more young talent for after 2021? So far, this process does not seem to have gone well for something that was apparently foreseen years ago.

From a competitive standpoint, I understand why the Cubs haven’t been transparent about this stuff from day one. It wouldn’t have helped them in free agent negotiations or extension conversations, and it clearly would have hurt them in trade talks. Heck, now that everyone knows what the Cubs are trying to do anyway, it probably is hurting them in trade talks. It’s annoying that we all kind of had to figure this stuff out on our own many years later, but that’s just the way it’ll always play out on the financial side (the actions speak louder than the words).

Once you accept that the Cubs absolutely, unequivocally decided they could not be over the luxury tax three years in a row during the current CBA, you can see what happened. They realized they wanted to push aggressively in 2017-19 to try to win with this group, and that process took them over the tax in 2019. Looking ahead, they could see that keeping the band together and adding even more would definitely keep them over in 2020, and would also risk removing the ability to realistically get back under in 2021.

So they either could try to dip back under in 2020, when so many contracts came off the books and it felt like an organic time to try to trade some pieces for value, or they could allow themselves to stay over in 2020 (second year in a row) and go scorched earth to get back under in 2021 (when those same pieces would have much less trade value).

The Cubs decided to try to thread the needle of competitiveness in 2020 while dipping back under the tax, and also trying to position themselves not to fall off a cliff after 2021. Again, once you’ve accepted that teams just aren’t going to go over the luxury tax three consecutive years under the current CBA (the Cubs aren’t alone in that), then I conclude they were right to try to dip back under in 2020, rather than leaving themselves completely stuck in 2021 and even worse off in 2022 and beyond.

I do take issue with the execution on this plan, which the Cubs almost certainly too closely tied to being able to get an early arbitrator decision on Kris Bryant and then trade him for a massive haul. Not only has that not happened, but it looks less and less plausible by the day. Moreover, the Cubs haven’t even made any moves that actually set the team up – from a talent perspective – to be in a better place in 2021 and beyond.

In hindsight (foresight, if you’d asked me back in November), the Cubs should’ve very aggressively tried to trade a guy like Jose Quintana for whatever they could get, just to be sure they could stay under the luxury tax in 2020. Yes, it would hurt the competitiveness in 2020, but at least then you’re not bent over a barrel trying to find a good deal for Kris freaking Bryant in February. I don’t know for sure that’s where thing are, mind you, but that’s definitely my concern.

Where things stand now? Unless you want to see the Cubs doing absolutely nothing again next offseason, you’ve gotta root for them to figure out a way to ENSURE that they’re under the luxury tax this year. Sucks, but it’s the reality. Welcome to your brave new world of spreadsheets.

Right now, realistically, the Cubs need to cut at least $5 to $10 million from now until the end of the year to ensure they can stay under during the process of regular season maneuvering and bonuses accrued. They could wait until the trade deadline to cut that salary, but I mean, what kind of an insane bit of planning is that? What if you’re competitive?! Heck, even if you’re not, why would you want to kneecap your own trade leverage (at the best trading time of the year) four months in advance?

What I’m saying, I guess? The Cubs need to move salary out now. They made this plan years in advance, and they knew this time was coming. Now they need to execute on the plan without imperiling more seasons with artificial financial handcuffs.

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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.