NEWSLETTER
To all the hopeful fans and breathless punditry who’ve thought the Cubs were going to go nuts in the waning hours of the offseason, I think you are in for a disappointment.
If Cubs owner Tom Ricketts’ comments this week weren’t enough to confirm that the team does not have its eyes on a last-minute spending spree, Patrick Mooney has it via sources in the org: “Cubs chairman Tom Ricketts confirmed the team’s payroll will likely settle around this year’s $237 million luxury-tax threshold …. Team officials also expect to have the flexibility to go over the luxury-tax threshold if opportunities are available at the trade deadline.”
Now, you could take the positive part away from that if you like: the luxury tax threshold will not STOP the Cubs from making IN-SEASON additions that come with salary. I guess that’s good news. But that’ll happen only where the right players present the right opportunities for the right upgrades. Because, as we saw last year, the Cubs aren’t going to go over the luxury tax to make minor in-season additions.
The negative takeaway? Well, it’s more or less what Ricketts suggested with his comments: the Cubs see the $237 million first luxury tax tier as something of a soft cap for offseason commitments.
That means you can kiss your hopes of multiple impact signings from here goodbye. The Cubs are, depending on your source of preference, projected to be roughly $30-ish million under the first tier of the luxury tax right now. So signing Cody Bellinger to a deal with an AAV in the $25 million range would all but eat up that gap on its own. Maybe the Cubs could also squeeze in a guy like Ryne Stanek, but a Matt Chapman or Jordan Montgomery? It’d be a total non-starter.
Yeah, I suppose you could start trying to get ultra creative and unload Drew Smyly’s deal, and then maybe maneuver multiple impactful signings, but that feels like a reach at this point of the offseason.
So, if the luxury tax is a soft cap for Cubs commitments during the offseason, it’s yet another way the rest of this offseason feels like Bellinger or bust, eh?
One other thing: we’ve talked often about how, because of the baseball-related consequences, it doesn’t ever make any sense to just barely go over the luxury tax, whether by in-season or out-of-season moves. Your draft picks/multi-year tax escalations/revenue-sharing impacts/etc. are all affected whether you’re over the tax by one dollar or by one billion dollars. The only difference is the money.
So if the Cubs are ALREADY PLANNING that they would go over the luxury tax ONLY in-season and ONLY if the right upgrades come along, then it’s a pretty good bet that, even if they go over, it won’t be by much. Why? Because it’s not like you’re ever adding $30 million in salary at the deadline. You’re adding just the pro-rated salary left on a guy’s deal (assuming you take it all), for about two months of the season. You can make massive, massive additions at the deadline and see your payroll jump by like $10 million total.
That is all to say, if the Cubs are already thinking they might go over the luxury tax, then why the hell wouldn’t they just do it now, when they can get impactful players in the door for the WHOLE season, and when they can actually gain some efficiencies by going way over, instead of just barely over in July?
That’s not a rhetorical question, by the way. It has an answer. It’s not an answer I know for a fact, but it’s one that is sure suggested by the circumstances: money is an issue, and the Cubs would prefer not to go over the tax at all. They might do so if this and if that come July, but it’s pretty obvious – unless this whole thing is EXTRAORDINARILY ELABORATE subterfuge so that the Cubs can get two of the Boras free agents – they are trying to stay under the tax.
Moreover, since those Cubs sources say they would be willing to go over the tax in-season if that’s what it took, then we know the baseball consequences of being over the luxury tax aren’t steering this ship. Instead, it’s just about the money. Which is swell.
