Are The Cubs Duping The Media?

For several years we’ve heard about the Chicago Cubs signing Bryce Harper. Even if the stories stopped short of explicitly declaring that, they’ve all agreed that the Cubs would be a giant player in the free agent extravaganza of 2019. Everyone has pointed to the fact that the Cubs are in their window to win, they’re printing money, and they’re adding new revenue streams every year including a new TV deal that should add anywhere between $75 million and $150 million a season.

But over the weekend we kept hearing how the Cubs are cash strapped and can’t partake in this offseason’s crazy spending spree.

Good morning! After talking with a handful of MLB sources this weekend, I am starting to believe more than ever the Cubs will not be a factor for Bryce Harper or Manny Machado. The only way that changes is if Theo and Jed and Co. are able to move serious money off the books.

— David Kaplan (@thekapman) November 4, 2018

The @suntimes_sports cover, featuring Bryce Harper, who might not be right for the #Cubs, by @GDubCub – https://t.co/Ym4BlfSTbo pic.twitter.com/XM1gtOmxUe

— Sun-Times Sports (@suntimes_sports) November 4, 2018

Cubs cash broke

So the main stream guys have it, so we’re to believe it, right?

Not exactly my take on it. We’ve seen media members be fed “information” in the past, for it to really be a smokescreen. Teams do this all the time, and all the time media and fans apparently fall for it. The thing that gets me on these stories is, this front office has been the most transparent of any group I’ve ever seen. They have absolutely no problems telling people how things are, if you listen. This front office has told us that they will go over the luxury tax when it makes sense. This front office has told us that the Ricketts will support their decisions financially, whatever that might be. We’ve heard Theo Epstein tell the world that the offense is broke, and they will address that this offseason.

So why wouldn’t the Cubs do the easiest thing and toss money at a giant free agent to fix it?

There is a lot of synergy between the Cubs and the Boston Red Sox. Not only is almost all of Theo’s staff from Boston, but they both run similar organizations, look at the same kinds of players, and generally have similar organizational philosophies. Take last offseason for example. All winter long, hell, since the end of August 2017, everyone knew JD Martinez was going to be a Red Sox. But there was Boston, throwing out smokescreens, denying reports, saying they couldn’t meet the demands – and eventually signing Martinez to a five-year $110 million contract.

In fact, the Red Sox, in recent years, have spent more money on bad deals (Martinez definitely isn’t a bad deal) than anyone and have won four championships since the 2004 season.

No team has handed out more “bad” contracts over the last 15 years than the Red Sox. Yet they overcame them, continued to spend big in free agency, and won the World Series 4 times. It’s called being a big market team. No excuse for the Cubs not to pursue Bryce/Manny this winter. pic.twitter.com/L4blWMjJAZ

— Uncle Jeff (@ebsoftball) November 4, 2018

With all the money the Cubs have, all the future money they will have, and all the franchise changing free agents on the market. We’ve heard for years on how the Cubs are expected to blow past the luxury tax threshold, we’ve heard how much the TV deal will allow the Cubs to put more money into the club, and we’ve heard that they are prepared to be involved in many of the free agent discussions. But now we are all expected to believe they won’t be playing at all?

Poppycock.

Don’t believe these reports. I am not saying that the media members that shared them aren’t doing their jobs, or they are flat out lying – they aren’t. It is the Cubs feeding these guys stories to help their cause for when they do “check-in on the Harper negotiations” or “kick the tires on Manny Machado.” By stating upfront that they aren’t playing along, they are limiting one of the potential big-market clubs from jumping into, and driving up the costs. The New York Yankees did the exact same thing as they have declared to be out of the Harper and will only check in on Machado if the price isn’t extreme.

Do your job

Now again, the Cubs media are doing their jobs. They receive information, they report information. It’s up to the fans and the blog-o-sphere to freak out about what they report. I don’t blame them (media) or the casual fan, or even the blogs (ahem, clicks baby). But I do find it to be strange that the media or fans aren’t double or triple guessing the information. I mean, I am sure they are going through the right sequence of vetting out the information, but the games organizations play are often incredibly transparent.

I fully expect the Cubs to be very much “in” on Harper, Machado, and every other bigger name they can be in on. I’m also going to go on record and say the third level of penalties for going over the Competitive Balance Tax. They are already over the $206 million limit (assuming regular arbitration increases), there is less than $40 million to the $246 million mark which includes additional tax and hit to their highest draft pick. The money is a real thing, which makes any contract the Cubs do sign a much larger investment, but if their top draft pick is moved back 10 spaces, it shouldn’t matter. Next season’s draft is not going to be very good, and the difference between a 27th pick or a 37th pick isn’t going to be too much.

Just for the sake of argument, let’s say the Cubs have a payroll of $245 million. After the tax, their penalty would be $12.5 million in 2019. Now of course there are additional penalties for the next season, and the season after that, if they remain over the CBT, but let’s stay on 2019 for now. If the Cubs increase their payroll to $270 million in 2018, their tax would effectively be $27.2 million. This would make the Cubs effective all-in number just under $300 million (only accounting for AAV).

Using 2017 numbers (which both the revenue and operating income have changed in 2018) the Cubs had $355 million in money to allocate towards player salaries, or just pocket as profit. They spent $186 million on player expenses, leaving $169 million in profit, which of that I am certain went to other things like The 1060 Project. In any event, the Cubs ticket prices increased in 2018, but the player salaries increased as well to around $194 million ($240 million if you consider all payroll and incentives). This would still leave somewhere in the neighborhood of $115 million and $161 million in profit.

Now, the Cubs would operate with a very thin margin in 2019 if they were to sign Harper. I mean, if Harper gets a $45 million AAV deal, that would leave the Cubs with only $70 million in profit for the season. This of course with no guarantees of playoff baseball. I mean, with only $70 million in the bank, the Ricketts can only afford 466 fully decked out Tesla Model S’s.

2020 and the TV deal

Now enter the infamous Cubs TV deal and the 2020 season. This has had many wild estimates on how much it would be worth to the Cubs, but a conservative figure would be around $75 million a season. This is basically $75 million a season the Cubs made up out of thin air. So now we add $75 million to the kitty, which would leave the Cubs with anywhere between $190 and $236 million in additional revenue. By the way, keep in mind that the actual TV revenue will be much more than this $75 million number.

In just one season we now have a team that likely can’t spend enough money, regardless of the team’s own free agents that are coming up. Which, points me towards the Cubs impending free agents, and just how the Cubs could afford to pay them with a huge salary like Harper’s joining the club.

After the 2019 season, the Cubs have these players contracts coming up.

2019
Ben Zobrist – $12.5M – Not likely to return
Cole Hamels – $20M – Not likely to return (unless the two sides re-write his 2019 option into a multi-year deal)
Steve Cishek – $6.5M – Not likely to return
Pedro Strop – $6.25M – Could return
Brandon Kintzler – $5M – Not likely to return
Brian Duensing – $3.5M – Not Likely to return

2020
Tommy La Stella – Arb – Not likely to return
Jon Lester – $20M – Not likely to return
Tyler Chatwood – $13M – Not Likely to return
Kyle Hendricks – Arb – Undecided
Jose Quintana – $10.5M – Not likely to return
Brandon Morrow – $12M – Undecided

2021
Anthony Rizzo – $14.5M – Undecided
Javier Baez – Arb – Undecided
Kris Bryant – Arb – Undecided
AR – Arb – Unlikely to return
Kyle Schwarber – Arb – Undecided
Mike Montgomery – Arb – Undecided
Allen Webster – Arb – Unlikely to return

Just looking at those names, and the salary clout they command, this team will find itself swimming in money in a short period. Now of course, if the Cubs don’t re-sign their guys, they will need to either dip into the free agency pool, again, or reach down into their minor leagues for the talent. We all know that the Cubs lack major league ready talent at the top of their system, but there are several intriguing pitchers at the lower levels, and this past international signing the Cubs did very well for themselves.

But they are two to three years away from making a big league roster, which almost perfectly lines up with the time frame in which many of these current players will be leaving.

I guess what I am saying here is, none of this is by accident. The way salaries line up, the new wave of prospects, the current free agency, looming Cubs free agents, and the news that was leaked to Cubs media. There is a grand conductor of this orchestra and his name is Theo Epstein. He’s played this perfectly, and we should all 100% believe that he will put the Cubs in a position to sign a major free agent this offseason.