Baseball finances have forever been a bit of a guessing game. Forbes does a nice job of providing estimates, but they are still providing their best “guesstimate” of what a team might be worth or what their revenues look like. Thing is, no MLB team is transparent with the money they bring in, and no MLB team discloses their bank accounts.
This has led to some secrecy and confusion when people discuss the finances in the game. We assume the Cubs brought in more than $450 million in the 2019 season, and we assume that by using public information. We can look at the average attendance at Wrigley Field, multiply that by the average ticket price. The Chicago Cubs had 3.092 million fans in 2019 and the average ticket price was $59.49 (direct sales only). This puts ticket revenue for the 2019 season around $185 million – or around 60% of their roster.
We can also determine a number of other revenue items that are somewhat public, like, TV and streaming revenue. But there are other items that are less public, like some marketing deals, souvenir sales, concessions, among other things. All in all, Forbes put the Cubs around $471 million.
During the COVID-19 lockdowns, Tom Ricketts suggested that 70% of the Cubs revenues come from game day sales. This would put ticket sales, concessions, and merchandise around $330 million. This would leave roughly $145 million in concession and merchandise sales. To note, Forbes suggests the Cubs make about $87 per fan, which puts in-person revenues around $270 million, or $60 million less than Ricketts suggests.
This doesn’t necessarily speak to the purpose of the article, it does help to set the table. Regardless of what game day figure you believe is right, the club lost all of that revenue in 2020. If ripping $270-330 million from a budget wasn’t enough, the Cubs lost 100 games of TV and streaming revenue. Adding insult to injury, the Cubs didn’t see the giant bump in ratings that they expected, sitting right around league-average in the league in viewership bumps.
The Cubs had an adjusted payroll for the 2020 season of $75.6 million. Their CBT, or luxury tax figure, came in at approximately $218.6 million. In 2019, the Cubs estimated approximately $471 million (Forbes). 2020 we scratch $270 right off the top, leaving a difference of $201 million. Then adjust all other revenues by 37% (approximate number of regular-season games in 2020), leaving the Cubs with approximately $75 million in 2020 revenues.
Or, essentially, breaking even.
This isn’t an exact science, but it is a fair representation of what revenues look like. Even adding $10-20 million doesn’t provide a lot of financial security for a club entering its second most important offseason since 2014.
This is where we get to Kris Bryant – as well as Javier Baez, Kyle Schwarber, Willson Contreras, and Anthony Rizzo.
I previously suggested that the Cubs could non-tender several players this winter. I pointed to the bottom of the roster, but now some suggest the top of the roster could be at risk.
In a recent article from Sahadev Sharma and Patrick Mooney at The Athletic, they suggest that budget cuts could extend to an established player.
Right now, a best-case scenario might resemble parts of the last two winters, which disappointed Cubs fans but still allowed Epstein’s group to target role players and sign the undervalued pitchers who thrive within the team’s game-planning system. The worst-case projections would involve cuts far much more dramatic than expected, forcing a non-tender of an established player rather than take a chance of not being able to trade him and getting stuck with the salary in 2021.
Could the Cubs non-tender someone like Bryant, Baez, Schwarber, or Contreras? Or could they buyout Rizzo as well? He is set to earn $16.5 million if the Cubs pick up the option, or $2 million if they buyout the contract.
I don’t anticipate the team buying out Rizzo, but if things become even bleaker this offseason, there is a possibility that he, along with several others, become free agents before December 2nd.
It isn’t a secret that the Cubs need to free up some payroll. Not only for the reasons above but because of the luxury tax and 2021 holds no promises of having fans attend games. If the Cubs are limited to 20-25% attendance, assuming ticket prices increase to around $65 a seat, that’s only $50 million in ticket revenue. Let’s give the price per fan a boost to around $95 in 2021, and the game-day revenues are still around $75 million.
Using same estimates above (ticket revenue accounting for around 60% of payroll) this will put the Cubs around $120 million in total payroll!?
Cutting back to $120 million isn’t likely, but slashing it down to around $150 million for the 2021 season can absolutely happen. How does a club that had a $218 million payroll in 2020 reduce it to $150 in just one offseason? Aggressive trades and possibly non-tendering higher-paid, late in their arbitration years players.
This brings us to Bryant. He should be the guy a team builds a roster around, but also represents someone that would bring in a lot of valuable assets. The issue here is, do teams believe durability is an issue? Personally, I wouldn’t put much value on his injuries. They have mostly resulted from hard play and not an indication that his body isn’t holding up. When he has been healthy, his production has been better than ever. I also see Bryant’s ability to go out and continue to play – even when not 100% – as an asset and not a determent to his stock.
Bryant will be a name floated around this offseason. He is entering his final season of team control and will represent about 12.5% of a $150 million budget. If there’s a sense that the club and Bryant will not reach an extension agreement and they plan on reducing salary, non-tendering Bryant could be an option if they cannot trade him before December 2nd. This will ensure his $18.6 million (or his 2021 salary figure) is removed from their books.
Javier Baez has a similar story. He has broken down towards the end of every season he’s played. Again, like Bryant, he has continued to play through these nagging injuries. The performance down the stretch from him has been rather, nonexistent. He owns a career .242/.280/.454 slash line in August and .241/.294/.377 line in September and October. Of course, defensively, he is a whiz, but his 115 wRC+ between 2017 and 2019 is 72nd in baseball and only eighth among shortstops.
The Cubs and Baez have been discussing a contract extension (both the Cubs and Javy have confirmed this) but have not come to a reasonable agreement. This suggests the sides have been off, which also suggests Baez’s camp is looking for more than what the Cubs are offering. As a player that is entering his last season of control, he is also someone the Cubs would consider moving if talks continue to prove unsuccessful.
To a much lesser degree, Contreras might be on the block. I continue to suggest that Contreras will bring back the most talent if he were traded. His much-improved defense and offensive production, I suggest the Cubs keep him around. Plus, with an estimated 2021 salary between $5 and $7.5 million, he is still relatively a low-cost player.
The other player I can see a hard push to look to move is Schwarber. Kyle has been one of Theo Epstein and Jed Hoyer’s favorite players from this core. But, eventually, there needs to be an inspection of their thoughts on a player and the actual results of that player. I love Schwarber, and I think in the new baseball (which will have a DH in the NL and the reliance on power) Schwarber is a great fit. The issue is, the Cubs have a lot of swing and miss and they struggle verse velocity. If all things remain the same, left field is a spot that the Cubs could get better in terms of contact rate.
Schwarber will carry a salary between $7.1 and $9.4 million in 2021. His smaller price can suggest that he is retained, but with free agency looming he will likely be shopped. There’s value in him around the league, and since he is much more than just a bat now (after much-improved defense) he presumably has value to all 30 teams.
All these players will need a decision on their Cubs future by December 2nd, the non-tender deadline. If what Sharma and Mooney suggest is true, the Cubs will need to trade one or more before that date. Then there is a real possibility that the Cubs just non-tender them (not offer a contract) releasing them to free agency.
Could you imagine all the hoopla over the 2015 grievance (that was completed last offseason) being negated because the Cubs decide to non-tender Kris Bryant? I can’t imagine that situation actually happening. I can see them non-tendering Albert Almora Jr., Colin Rea, Ryan Tepara, Dan Winkler, and Jose Martinez. It is now a possibility that they also non-tender Bryant, Baez, Schwarber, and Contreras. There is also a future where the Cubs move on without Rizzo at first base.
The five players in question represent roughly $60 million in the 2021 budget. If this is an approach the Cubs move forward with, I would expect two players of this group to be on another team in 2021. Which two? Who knows at this point?
What players would you trade or which ones would you non-tender if you were the Cubs? Let us know in the comments below.
