Last Sunday I wrote how the Chicago Cubs were interested in bringing Jake Arrieta back. Today we (re)learn that the team would only do so on a four-year pact. This idea isn’t new, but with the rehashed interest it was certainly important to reaffirm.
The Cubs want to fill that last rotation spot with someone long-term – just not as long-term as Jake would like. With Scott Boras and Arrieta looking for a six-year contract, the Cubs are only willing to go four.
This isn’t a slight to Jake in any way, he has earned the chance to ask for and receive a deal as lengthy as he’s asking. The Cubs have long term luxury tax concerns restricting them from going a fifth or sixth year. The real problem for Jake is, most other teams are finally treating the luxury tax as a salary cap as well.
MLB has had a luxury tax in place for several seasons, just long enough for the Yankees to pay $304 million into it. While a small market organization might have troubles paying a salary related tax, under the current CBA it is the draft pick compensation that is the real penalty.
Under the current agreement, a team that signs a free agent who has declined a qualifying offer, would give up their second and fifth highest draft picks. Additionally, if a player leaves a team over the luxury tax threshold, they could only gain a draft pick after the fourth round.
Adding Jake’s presumable $27.5 million to what might be a $175-185 million payroll puts the Cubs over the tax. If Jake signs for six seasons, the Cubs could see a core player leave for free agency – and only receive a pick between the fourth and fifth rounds in return.
The Cubs have been adamant about their interest in signing Jake for several years. The Cubs looked to extend Jake as early as two seasons ago. Jake has been adamant that he was willing to bet on himself. After the 2015 season I argued that Jake should have accepted the deal on the table. Reason being, Jake has earned $26.3 million over the past two seasons. Had he signed an extension after the 2015 season, it would have been in the $20 million a season range. If his extension was through the 2020 season, he would have earned $140 million.
Now let’s say Jake gets his $25 million AAV deal for five seasons this offseason. He would earn $125 million plus the previous $26.3 million. Or a difference of $11.3 million.
Seems almost foolish (as foolish as $11 million can sound) that Jake would have gone to free agency over an $11 million difference. You can’t blame him after that 2015 season, or the beginning of the 2016 season, but hindsight is an expensive test.