NEWSLETTER
We know all the competitive reasons that this Trade Deadline figures to be the quietest we’ve ever seen. So many teams are “in the race” thanks to the short season and the expanded postseason that sellers are few and far between. What you’re buying is barely a month’s worth of the regular season. Your time in the postseason, even as the best club, might last only two or three games. The season could get shut down by the pandemic after you make a big trade. On and on.
But there’s another really significant reason I expect the Trade Deadline to be very quiet: money.
Although unloading contracts is not always a primary element of trade season, the money owed by one team and picked up by another team (and being able to play around with those dollars) is part of what makes buyer-seller trades so doable. The fact that you can coordinate on how the financial aspect of a deal is going to work out makes it all the more possible to come to terms on the actual player acquisition cost.
This year? Front offices across baseball are having their budgets slashed mid-season. Teams are furloughing and laying off staff just to save whatever money they can. Taking on any additional player salary, even a couple hundred thousand dollars, is going to be an enormous ask for most organizations. So, with one less variable to play with in trade talks, it’ll make deals all the more difficult to put together – especially ones involving significant players who make significant dollars.
I’ve internalized that reality, but it also offers up a corollary proposition that we aren’t really seeing discussed: in a world where many teams are so hard up for cash that they would desperately unload any chunks of salary they could, doesn’t that mean the opportunity to be a buyer in this market is as good as ever? If you’re willing to take on a contract in this market – be it a rental or even a longer-term deal – wouldn’t you expect the player acquisition cost to be tiny?
Moreover, if you were willing to take on a flat-out bad contract, couldn’t you get the selling team to attach more to the deal? Like, for example … a top prospect?
Getting an Impact Player and a Top Prospect for Only Money
Imagine a scenario where there’s a Player X on a long-term contract that, in a normal world, looks fine. Not great, but fine. But in pandemic world, the contract now looks a little scary to a more squeamish owner, who has seen his highly-leveraged organization lose a hundred million dollars this year. That team would desperately, desperately love to move that contract, even if Player X is a pretty decent contributor.
Now imagine that you’re a competitive team that would love to have Player X, both this year and beyond. And since you are one of the few organizations willing to roll the dice on the financial side of things – you’re betting that baseball is going to be OK in the long run – you have the money to take on that contract. So you say sure, we’ll trade you a nothingburger piece for Player X *and* a top prospect, but we’ll take on Player X’s full contract. In that way, you’ve suddenly added a great Trade Deadline piece for the next month+postseason, you’ve gotten Player X for more years to come on a contract that may yet turn out to be OK if baseball bounces back, *AND* you’ve just “bought” a top prospect.
Sound too good to be true? Well, I strongly suspect that, this year, it is not.
I’m telling you that with as jacked up as MLB finances are right now, I really don’t think people are properly evaluating the role money is going to play in what teams can and will do going forward. There are teams out there that would absolutely move $50+ million off their books in exchange for losing a top prospect. And if there were a trade partner out there who actually kinda-sorta wanted that $50 million contract anyway? It’s a win-win.
Will Any Teams Actually Take the Opportunity?
Yet I don’t know that we’ll actually see any club doing this. (Eh, maybe the Dodgers.)
Look no further than the contentious negotiations to try to make this season happen. Whether we think it’s right or not, team owners believe themselves to be suffering biblical losses this year, which means the prospect of adding even a small amount of money this year to the expense side of the ledger is going to be met with almost universal resistance. And the risk associated with putting a new contract on the books for 2021+ when we don’t know what the state of the pandemic will be? Look, I get that most, if not all, owners are just going to refuse.
… which, in turn, is exactly why this is an opportunity unlike any other. I’m not sure we will ever again see a time when this many teams are this desperate to shore up their books. To be sure, those same teams are going to be jealously guarding their prospects (their value has gone way up in this environment!), but if such a team’s owner catches wind that he can save tens of millions of dollars right now by giving up a prospect? Let’s not be naive. There are extraordinary deals that could be made right now.
But, again, this is probably all academic at this point. I just wish the Cubs would go ahead and start having some conversations with some of the most hard-up clubs about how they could take a good player off their hands at full price so long as a great prospect comes along for the ride. Then again, for all we know, the Cubs – having just launched a network that lost more than half its inaugural games – are one of the most hard-up clubs …
Obligatory Cubs Luxury Tax Discussion
You can’t talk about the Cubs and money right now without getting into the luxury tax. The short version is that the luxury tax situation doesn’t really impact any of the above, as it relates to the Cubs.
Last offseason, the Cubs spent most of their efforts ostensibly trying to get the 2020 payroll under the luxury tax. That would reset the penalties, and give them a chance to enter the post-2020 offseason with maximum flexibility – no risk of being a three-time offender in 2021, which is something the organization was simply not going to do.
So, let me be clear: those efforts to get under the 2020 tax mattered ONLY in a world where the Cubs were going to want to spend ABOVE the luxury tax level in 2021. But now that the pandemic has eviscerated team finances and blown up the player market, I cannot see a realistic scenario in which the Cubs go over the luxury tax in 2021, regardless of what happens to their payroll in 2020. They just aren’t going to sign a bunch of mega contracts this offseason to push the payroll way up. Sorry, but start bracing for that reality now.
And in this new pandemic world, the 2020 luxury tax situation no longer matters with respect to future Cubs plans (because, again, I don’t see them going over in 2021 anyway). Moreover, the revenue-sharing penalties aren’t going to hurt as much (because there’s so little revenue to share!), and the free agent/qualifying offer penalties aren’t going to hurt as much (because so few free agents will even get such an offer in this environment, and certainly no exiting Cubs!).
So, whatever. It’s almost impossible to get under the luxury tax this year for the Cubs (barring some rules change about the way it is going to be calculated this year, and nothing like that has been made public), and it doesn’t really matter all that much if they do anyway, so you could argue that nothing the Cubs do at the deadline should be financially motivated one way or the other. Well, at least relative to the luxury tax, I mean.
If ownership wants to go into their own pockets to allow the front office to “buy” up some young players on the super cheap (in terms of acquisition cost)? God bless them. As I said, I don’t think many, if any, owners are going to do that this year. But that’s the opportunity that is available, and since the Cubs’ luxury tax situation really isn’t a huge reason not to, I’m just saying: the Cubs could add impact players for this year while also taking on their contracts and maybe netting prospects, too. I don’t expect it. I won’t rip the teams that don’t do it.
I’m just sayin’.
