Cubs Should Fare Very Well in Arbitration Cases

We are still a couple of months away from when clubs and players need to submit salary arbitration figures, but all salaries will be incredibly important for the Chicago Cubs this offseason. Whether there is truth to the belief that the Cubs don’t have much to spend this winter, or if they are slow playing the market, the current payroll will very much dictate any future expenditures. We know that the Cubs have $165.5 million that is already pot committed to salaried players, and there is another $4.5-$5.5 million earmarked for pre-arbitration eligible assets. This brings the Cubs payroll to just over $170 million. This figure does not include any salary paid to any arbitration eligible player.

What is arbitration

In the event that you do not know what salary arbitration is, basically any MLB player that has three or more years of Major League service, but less than six, are eligible for salary arbitration. Now there are some caveats, most notably, if a player signed a guaranteed contract for the upcoming season. There are other stipulations, such as a player being a “Super-Two” which would allow for a player with less than three years service time but more than two years to become arbitration eligible. A player will have up to three arbitration years, which you might find referred to as Arb-1, Arb-2, and Arb-3 years.

In arbitration, the organization and the player will submit salary figures to each other. It is incredibly common that the team undercuts the players figure, but more times than not the numbers are close enough that the two sides can come to an agreement rather quickly. In the event that the two sides cannot come to an agreement, they will both argue their cases in front of a panel of arbitrators in February. This is something teams do not like to do as they will need to plead their case in front of their player, his agent, and the panel on why he isn’t worth the money they are asking for. They will highlight every flaw in the player’s game, and it becomes an awfully messy situation. Luckily, the Cubs rarely go to a full out arbitration case with their players, Justin Grimm being the only player to do so under Theo Epstein and Jed Hoyer’s watch (which they won) and the second since 2010 (Ryan Theriot, which the Cubs also won).

This is a very high-level overview of the process. The full process and explanation can be found on the MLB site in their glossary section.

Which players are arbitration eligible?

For the 2019 season, eight players are eligible for arbitration. Next season two more players will earn arbitration rights. The eight for this year are; Kris Bryant (Arb-2), Kyle Hendricks (Arb-2), Javier Baez (Arb-1), AR shortstop (Arb-2), Kyle Schwarber (Arb-1), Mike Montgomery (Arb-1), Carl Edward Jr (Arb-1), and Tommy La Stella (Arb-2).

For the guys that are going through their second arbitration, here is a breakdown of their current salaries:

• Kris Bryant – $10.85M
• Kyle Hendricks – $4.175M
• AR shortstop – $3.2M
• Tommy La Stella – $950k

The remaining four that have not gone through the process before earned these salaries in 2018:

• Javier Baez – $657k
• Kyle Schwarber – $604.5k
• Mike Montgomery – $611.25k
• Carl Edwards Jr – $594k

You can already tell, arbitration can do a number on a team’s budgets, especially when there is a $3-$10 million jump in individual player salary. This is a reason that some smaller market teams (notably the Tampa Bay Rays) have found some success in trading away parts before players hit their first year arbitration. They can grab a major haul, and they can continue to control finances, which is an incredibly important task for these markets. Now, in turn, they will likely keep some players that they deem important, but the main idea is they will flip a player that just finished their third year of service for one, two, or three players that haven’t started their service time clocks yet.

Second year arb-eligible projections

Kris Bryant

Back in January of this year, we were all impressed by Bryant’s huge arbitration increase, which is the most ever by a first-year arbitration eligible player. Surprisingly, it was a painless process and the two sides came together quickly on a number. With Scott Boras as his agent, I had suggested that the Cubs were buttering them up for Bryant’s impending free agency, paying them back for the service clock games they played in 2015, and possibly mending the fences for Jake Arrieta and other Boras clients that would seek future homes.

This year the case for Bryant is a little more clouded. He began the 2018 season like the MVP that he is, slashing over .311/.428/.595, was on pace for 34 home runs, 98 RBI, 119 runs scored, and was just hitting the ball all over the ballpark. Then in an innocent slide in the first game of a twin bill, Bryant slid headfirst while stealing second base. Since that point Bryant hit .249/.339/.378, had two stints on the disabled list, and finished the season with a disappointing 13 home runs. It isn’t an off base idea to say, the Bryant injury is the reason the Cubs didn’t win the National League Central.

Because of the injury, I am a bit uncertain on what Bryant will earn. According to MLB Trade Rumors arbitration projections, they have him estimated at $12.4M. This would be a relatively small increase, but Bryant’s 2018 season shows he was “worth” a small increase. According to spotrac, Bryant’s “market-value” is still around $24.5M as a free agent player. If you factor WAR into a salary projection, which in 2018 it appears each win is valued at around $8 million, Bryant was worth $15.2 million as a 1.9 WAR player. In this sense, and factoring in everything, I feel that the Cubs and Bryant will end up somewhere in the $13.5 million range.

Kyle Hendricks

Whew, here is another guy that had a Dr Jekyll and Mr Hyde type of season. Up until May 30th, Hendricks had a 3.19 ERA, was pitching into the seventh inning, and was holding hitters to a decent .232 BA and a .275 OBP. His next 14 games were very, very ugly.

From May 30th until August 15th, Hendricks owned a 4.91 ERA and just wasn’t fooling anyone. Hitters had a 9.7 H/9 against him, and were getting on base at a .335 clip. Perhaps it was due to some tinkering with Hendricks mechanics, or maybe he was just going through a mid-season dead-arm period.

After the 2017 season, a year in which Hendricks was pretty good, he earned an increase to $4.175M. He finished the 2018 season with a 3.44 ERA (his second highest) and a 3.5 WAR. I don’t like using a pitcher’s WAR to determine value, as Hendricks would be worth around $28 million based on his 2018 performance. As much as I love him, he isn’t a $28 million annual salary pitcher. MLB Trade Rumors projects his 2019 salary at $7.6 million, which is yet another hefty raise from 2018, and very likely where he will end up.

AR – shortstop

I have stopped using his name in any article on the website, and after I declared as such, there was a piece in which I needed to use his name, and I was called out for it. So, however bad it might look, I will only refer to the clubs troubled shortstop as AR or shortstop until further notice. This is a rough one for me because I genuinely liked the guy until the off field rumors appeared to be proven correct. In any event, I am sure you know exactly who I am talking about.

In 2018 the shortstop earned a raise to $3.2 million. MLB Trade Rumors projects his 2019 salary at $4.3 million. While the off field issues remain, including the remainder of his 40-game suspension, his 2018 play was adequate to earn him a raise. He had a 2.0 WAR, projecting out to a $16 million type of player. His offensive woes and troubles will pull his salary number down, and I wouldn’t be surprised if his agent, Boras, fights this one all the way to an actual arbitration panel. Still, it would be better for all to just agree around that $4 million mark and call it a day.

Tommy La Stella

Tommy has turned his image around here in Chicago. Going from the butt of a Ryan Dempster joke to a guy that the team turned to as a quasi-leader and a ringleader of some practical jokes himself.

La Stella transformed himself from a guy the team pushed away for Chris Coghlan, into a guy they needed. That is impressive. He also led baseball in pinch hits in 2018, was again a tough, scrappy hitter, and has cemented himself as a legit roster piece.

He made a cool $950k in 2018, and should get a little bump in 2019. Again, MLB Trade Rumors has him at $1.2M, which seems about adequate for a role player coming off the bench.

First year eligible players

Javier Baez

What more can be said about the most exciting player in the National League? Every single game he will do something that makes even the most verse and experienced baseball fan say wow. If you’re lucky, he will do so while hitting, fielding, and base running.

Baez earned his first Silver Slugger award in 2018, is a finalist for the NL MVP award, hit 34 homers, drove in 111 runs, stole 21 bases, had 83 extra base hits. He was equally dangerous on the base paths, where he essentially stole extra bases regularly by just having an insane sense of where a ball was, where players were, and the likelihood of him reaching the next base. Defensively, a lot of people will knock him down a peg for his 17 errors (spread across 2B, SS, and 3B), but he did end the year with a total of 10 DRS spread across all three positions, which was 16th best in baseball (if he qualified).

If it weren’t for Francisco Lindor, Baez will earn the highest increase this offseason for a first year eligible player. MLB Trade Rumors has him at $7.1 million, I would venture that they come in around $7.5-$8 million.

Kyle Schwarber

Here’s an interesting case. It is mostly interesting to me because of the “what if’s” that you can play with Schwarber. What if he didn’t blow out his knee in Arizona in 2016, would he be even more developed at this point? What if he didn’t stumble so much in 2017, would he still be a lead-off candidate? Where would his defense be? Where would his bat be?

But we aren’t playing the what if game, we are playing the production equals value game. In 2018 Schwarber’s value was more than it has ever been, which might surprise some Cubs fans. He finished the year with a 1.5 WAR, which is fractions higher than his rookie season WAR of 1.3.

This would put Schwarber at a $12 million value, and honestly he projects like a Jayson Werth type of player. This would place him in the $3 million range in this season, as he continues to progress it would likely place him in the $5-7 million next season, and likely around $12 million if all continues to progress the right way. But, here is the what if part of Schwarber. Does he progress, does he fulfill what he should be? As far as this offseason, MLB Trade Rumors suggests he will earn $3.1 million, that is very likely where he will fall.

Mike Montgomery

Montgomery is another interesting case. Do the Cubs grade him as a reliever or a starter or a swingman? Montgomery and his team will absolutely want to submit numbers as a starter, as that is the highest value. He probably should be thought of as a starter at this point.

In 2018, Montgomery’s 3.69 ERA as a starter was 1.44 runs better than his ERA as a reliever. He was especially good in both June and August, two months in which the Cubs had questions with several starters in the rotation, or had injuries to multiple pitchers.

Montgomery should see a good raise, and I think I might agree with MLB Trade Rumors on his 2019 salary. $3.0 million just seems about right for a guy that isn’t exactly a starter, isn’t exactly a reliever, and isn’t exactly a swingman (except I guess he kind of is I guess).

Carl Edwards Jr

Edwards had some fits late in the 2018 season, and he was equally questionable during the 2017 playoffs. Is this a sign of a relief pitcher that by nature can be fluky, or is this a sign that he isn’t as good as what his regular numbers show him to be?

Edwards has a career 1.069 WHIP, which is very good, especially for a guy that has been prone to walks (4.9 BB/9 in his career). He finished 2018 with a career low 2.60 ERA, again, very good. The season as a whole was rather good, had a 0.66 ERA in March and April, a 2.35 in July, and a 0.73 ERA in August. But it was the other months that raised eyebrows, and the biggest question was his performance in September where he posted a 5.14 ERA and a 2.571 WHIP. This means he allowed 2.5 hits or walks per every inning he pitched in September, luckily he only threw in 7.0 innings.

In an otherwise remarkable season, it was Edwards head issues that caused a horrific end to his 2018, and likely cost him a crooked number or two in arbitration. MLB Trade Rumors places him at 1.4 million, and I still think he will be closer to the $2.5 million mark. I base the number off of his entire season, his 1.4 WAR, his 2.60 ERA, and his other than his May and September, phenomenal season.

Estimated projections

If MLB Trade Rumors is right, and they have been pretty darn close for the last couple of seasons, the Cubs will be in store for an $18.5 million increase in these eight player’s salaries. The club paid the eight $21.642 million in 2018, and the $18.5 million increase would put these players at around $40.1 million. Add this to the $170 million we figured all contracted players and pre-arb players should earn in 2019, and the total payroll for next season at around $210 million.

Even adding a couple of smaller pieces to the 2019 club, it isn’t too hard to believe that the Cubs payroll will surpass the $220-225 million mark, and will likely run to around $230 million without much thought. Perhaps this is what the club means when they start talking about tight budgets, especially in terms of Bryce Harper or Manny Machado? Adding one of those two would push the total payroll to $260-270 million. This would be a near $90 million increase over the 2018 number. Then when adding the 42.5% tax on top of it all, that would pot commit the Cubs to around $298 million.

Besides the point, the Cubs should fare very well in arbitration this year, thanks to off the field issues, injuries, and underperformance. If you asked me two years ago if the Cubs would add just $18 million this offseason, I and several others might have called you nuts. But here we are, and there is a possibility that the low number could help the Cubs in this season’s offseason, as well as future salary progressions.

Baseball finances are fun…