NEWSLETTER
Understandably, most MLB teams operated in the early part of the offseason as though they could not be sure what the revenue picture would look like for them in 2021. Budgets were described as a range of possibilities, rather than a set number. Much of that was a pre-vaccine environment, and it was impossible to reliably project the state of the pandemic eight+ months in advance.
But as the offseason went on, as the state of things evolved, and as it became clear that some fan attendance was very likely to be permitted in 2021, teams shifted the range of their budgets. To be sure, some clubs are still going to be more impacted than others by the lack of fans, but all are now seeming to operate in a world where they know revenues will be down in 2021, but not anywhere close to the losses in 2020.
For the Cubs, this has meant a significant paring back of payroll compared to what we’d seen in 2018-2020, but there was at least enough wiggle room created to fill the most glaring holes on the roster (if not enough to add a perfect fit like Kolten Wong, but whatever). It’s a competitive roster that, while not maxed out on the financial side of things, was not solely limited by a lack of projected revenue. Here’s hoping that next offseason – if things go well enough with the Collective Bargaining Agreement talks – the Cubs’ budget projection will be back to something approximating normal. The Cubs figure to have tons of holes, and the free agent class will be loaded.
In the meantime, though, there is one additional period of time where the intersection of money and uncertainty could impact the Cubs: mid-year trade season.
For example, let’s say the Cubs are surprisingly quite competitive, and it looks like they could make a real run if they added Player X, who has a substantial salary. Are the Cubs going to be able to make that move? Are they going to be able to take on salary so as not to have to “pay” extra in prospect costs? Typically, the Cubs reserve upwards of $10 million for in-season moves. Will this year be typical in that regard?
Well, with the expectation that some level of fan attendance will be permitted at Wrigley Field as soon as Opening Day, the Cubs may have the confidence now to say in-season moves will be possible.
“The potential is always there,” Hoyer said of in-season acquisition moves, per The Athletic. “We’re going to learn a lot about the finances over the course of the next few months. What percentage of fans, when things open up, those are all real questions that we’re still figuring out. You want to be on that side of the equation, for sure. That’s where we would like to be. If we play well and there’s clear things we need to do to add to the team, then I’m confident we’ll be able to do that ….
“[Attendance] makes a huge difference to our finances. Given (last) year, we were probably on the more pessimistic side of things (with our payroll range at the start of the offseason). Whether it (became) more optimistic or less pessimistic — however you want to phrase it — that was something that we felt good about. Hopefully, we’ll get news here in the next little bit that we can have a percentage of fans. That would be fantastic. From there, it’ll probably be determined based on the state Chicago’s in and (the national outlook) as far as people getting vaccinations.”
In other words, the Cubs are at a point where they know now they’ll be able to do SOME things if TRULY justified by the team’s performance and need, but we’re back to thinking about what they could do as a range. Which, well, that’s fair. If we’re talking about every adult having had access to vaccination by June 1, then we might be talking about nearly full attendance capacity from July on. And if that happens, the Cubs’ budget for in-season acquisitions might go way up. If, by contrast, things don’t go that way – or fans just aren’t ready to come out in droves at full capacity – and attendance is more like 25-30% on average for the full season, the same flexibility just won’t be there.
Unfortunately for the Cubs, the fruits from the Marquee launch were always going to take more than a year to really show up, and thanks to the pandemic arriving the same year as the launch, I would hazard a guess that the projected take from Marquee got pushed back even further (if it wasn’t permanently decreased). The Cubs also have increased their luxury boxes and clubs and areas in recent years, which wind up accounting for a disproportionate chunk of your attendance revenue. Think those will do nearly as well in this environment as they would in normal times?
That is all to say, I do believe the Cubs when they say the pandemic hit their ledger harder than most clubs, and their ability to add and spend will therefore be impacted more than most clubs. That’s not an excuse for ownership being overly tight, if they don’t fully spend what revenue should permit, but it is an explanation for baseball operations. Which, in turn, is to say: if you want to see the Cubs able to spend on in-season moves, get some long-term extensions in place, and be flexible in free agency this fall, then you should be rooting for a substantial turnaround in revenues this year.
