NEWSLETTER
The Chicago Cubs paid out $80.6 million in salary in the pandemic-shortened 2020 season, according to the Associated Press, behind the Dodgers ($98.6 million), Yankees ($83.6 million), Mets ($83.4 million), and Astros ($81.4 million). It tends to be that these numbers aren’t actually finalized each year until December. We generally have a pretty darn good sense of where the numbers will wind up, but it isn’t until it’s all submitted around the league that we know the numbers for sure.
In the final accounting, the Cubs’ full-season payroll for luxury tax purposes wound up $216.3 million, third behind the Yankees and Astros, which put the Cubs over the luxury tax for the second straight year. Welp, all that previous offseason austerity didn’t wind up meaning a thing. The Cubs still exceeded the luxury tax.
But here’s the thing … it didn’t wind up mattering either way because of the pandemic.
For one thing, the actual payment of a tax was suspended this year. So no $2.5-ish million tax bill for the Cubs.
For another thing, although the penalties associated with being over the tax are still in effect, none will matter to the Cubs this year, since they have no outgoing qualified free agents, and they also won’t be signing any qualified free agents anyway.
For still another thing, even the revenue-sharing component of being over the tax multiple years in a row doesn’t matter this year, because revenue sharing was suspended (there wasn’t enough revenue for the big market clubs to share).
And for the biggest thing of all: the main reason the Cubs were trying to get under the tax in 2020 was so that they didn’t risk going over a third straight year in 2021. It is after year three when the penalties behind the scenes really get substantial. Indeed, the CBA was basically designed to prevent big market teams from doing it – and, you’ll note, no team has done it. (I wrote that Cubs luxury tax piece one year ago today. My, oh my, how the world changed in the intervening 365 days.)
With payroll being cut this offseason because of the pandemic, the Cubs are now not even a remote threat to exceed the luxury tax in 2021. Thus, no more worrying about a third straight year and what it means and yada yada. The Cubs will “reset,” easily, in 2021. To put it another way: it no longer matters that the Cubs went over the luxury tax in year two (2020), because they sure as shit ain’t going over in year three (2021).
So, the Cubs screwed up by making so much of the previous year about getting under the luxury tax, and then failing to actually do it. But then they fell backwards into none of it mattering because the pandemic changed the financial landscape so dramatically. I’d say it’s better to be lucky than good, but nothing about the pandemic (more important) nor the previous offseason plans (less important) is going to make anyone feel particularly lucky. It all still very much sucks.
It’s just that, in this one very narrow way, the Cubs aren’t necessarily worse off than they would have been otherwise.
