NEWSLETTER
Our expectations for the Chicago Cubs baseball operations expenditures over the next year more or less amount to me shrugging my shoulders and saying, “Probably bad?” whenever I’m asked.
The thing is, visibility on a baseball ops budget – especially with the Cubs – has been a really rough number to peg long before COVID-19 was a thing. The Cubs were never going to tell the public what they intended to do with any kind of precision, and even the best financial data available came with all kinds of caveats because of the nature of revenue-sharing, related business entities, and organizational costs.
I think we generally have developed a good sense of where things stood by the time the offseason kicked off, however, and I don’t know that any year’s maneuverings over the past decade have been shocking to me (in terms of the amount spent or not). But it’s guesswork, rather than factwork. We kinda have to synthesize the things that we know about revenues, the competitive landscape, the organizational positioning, the luxury tax status, and what the front office and ownership says/does, and from that, we can usually say, within a few million bucks, roughly where we see spending going.
So, circling back to this offseason, I’m saying: it already was gonna be really tough to figure this one out, given the transitions coming for the organization. And now you’ve got a pandemic from which the Cubs suggest their 2020 losses were “biblical,” and which causes revenue expectations for 2021 are necessarily going to be a really wide range rather than a precise number.
I’ve done some super rough estimating on my own to peg a POSSIBLY-available payroll range from as low as something like $150 million to something as high as $180 million (down from $210 million in 2020). That difference is enormous, and don’t you kinda have to enter into the offseason planning only to spend at the low end?
And even that extremely wide range could wind up too narrow! What if the season gets shrunk again? What if Marquee loses more carriers? What if the maximum attendance capacity gets no higher than 20% next year? What if Spring Training has zero attendance, and the rooftops don’t get used much either? What if no one wants to use luxury suites in 2021, or ballpark ad signage? What if the vaccine developments fail? What if, even with a vaccine and higher attendance capacity, fans are just too leery (or broke) to come back en masse? What if some come, but they don’t spend nearly as much as they used to?
I ask these questions not because I have answers to them. I ask them because the Cubs don’t even have answers to them. So, yeah, the range of possible budget projections is gonna be really wide, and the low-end is necessarily gonna be really ugly.
To that end, the latest from Sahadev Sharma and Patrick Mooney on the budgeting process includes this appropriately grim paragraph:
Right now, a best-case scenario might resemble parts of the last two winters, which disappointed Cubs fans but still allowed Epstein’s group to target role players and sign the undervalued pitchers who thrive within the team’s game-planning system. The worst-case projections would involve cuts far much more dramatic than expected, forcing a non-tender of an established player rather than take a chance of not being able to trade him and getting stuck with the salary in 2021.
A reminder that a non-tender is just a situational use of the word “release.” It’s what happens when a guy is still under control, is eligible for arbitration, and you decide you don’t want to be on the hook for his projected salary. Here are the Cubs’ projected arbitration salaries for next year, and the three big money guys are Kris Bryant, Javy Báez, and Kyle Schwarber. Anthony Rizzo is not arbitration-eligible, but is in largely the same situation: he’s controlled via a team option for 2021, which would pay him $16.5 million (if declined, he gets a $2 million buyout). So you can basically include him in this group of four one-year guys about whom these considerations apply, as Sharma and Mooney do in the narrative portion of their piece.
As you digest and maybe even read the rest of the yikes-fest, let me start you off with a silver lining: that best-case scenario (the part where the Cubs have enough money to at least try to pick up some undervalued players) would also include the possibility of redeploying salary that’s traded away or non-tendered. So it doesn’t *quite* mean that there could be no new significant additions. It just means – as I’m hoping you already expected – there wouldn’t be any huge signings unless there were big reductions in payroll elsewhere. Also, the non-tender market might be so robust this year that the Cubs could actually get some really interesting players for modest prices; just don’t expect any domestic superstars, because obviously. Yup, that’s my SILVER LINING about the BEST-case scenario!
The worst-case scenario, well, I don’t have much to offer you. It’s something I think we all probably knew was possible, but it sucks to see it said aloud from writers with sources in the building: the Cubs may simply have to non-tender a core player to get the payroll down to a level commensurate with whatever budget they’re afforded this month.
In that scenario, what you’d see is the Cubs frantically trying to trade one of Kris Bryant, Javy Báez, and/or Kyle Schwarber before the December 2 non-tender deadline – and that’s assuming the Cubs didn’t already decline Anthony Rizzo’s option five days after the World Series (don’t even let me think about that).
It’s not like teams didn’t already know about potential non-tenders from the Cubs or elsewhere, but it would be quite a scramble in late November to get ANYTHING at all in return if teams know that you’re either trading Bryant this week or making him a free agent next week. The only trade partners you’d find are the ones who don’t want to risk losing out on the guy in free agency – and the price in return in those situations is unimpressive.
You are immediately reminded of Theo Epstein’s preemptive strike to the market in his season-ending comments, emphasis added:
“Uncertainty rules the day, and we have to hunt for information every day and try to make a proper forecast, because you can’t always wait for full information before you have to make a decision and act. But I think there are going to be certain fundamentals that are true of this winter and that have been true for decades. One of those is especially relevant in our situation: a one-year deal for a really talented player is a valuable thing. That’s to our benefit both with what we can do in constructing the 2021 team having an additional year of control on certain players, and also potentially to our benefit in the trade market as we look to make some changes. So, I just think that’s a fundamental – if you can bring back some talented players who’ve done some special things in this game on one-year deals, and have those either to build your roster or to go out in the trade market, that’s a good position to be in.”
If the worst-case budgetary scenario comes to pass, then Epstein knows he absolutely has to find any value he possibly can for any trade piece he possibly can. Not fun, folks. Not fun.
I am also reminded in this moment that the Cubs just laid off 100+ employees, a brutal and sad thing in its own right. Even if those employees were all very well-compensated at $100,000 annually, that’s a cost reduction of just $10 million to the organization. If the Cubs felt they needed to that – to change 100+ employee lives and family lives in such a way – then ask yourself what they’ll be thinking about the prospect of some of these one-year contracts.
Anyway. We’ll leave it there for now, because none of this is a certainty yet. Heck, none of it will actually be a “certainty” until it actually happens. We don’t know what the budget is going to look like, but obviously the Cubs are going to have to craft one soon and proceed as if it’s legit.
