Financial State of the Central, Pt. 5: Cubs Have Money to Sign Monster FA and Keep Roster Together…For a While
Over the past month, I have addressed the financial states of the Brewers, Cardinals, Pirates, and Reds. Now it is time to discuss the Cubs. For those readers not on a mobile device, I recommend opening this Cubs payroll tracker link in a second window and using it for reference.
The Cubs roster needs over the next four seasons can be broadly summarized as follows:
- 2019 – No needs
- 2020 – Bullpen
- 2021 – Rotation
- 2022 – Infield
This creates an interesting financial decision for the Cubs this offseason. What does a team with no real needs, but plenty of cash to spend, do when presented with what is perhaps the greatest free-agent class ever?
In my mind, the only logical place to spend money would be on one of the two young superstars: Bryce Harper or Manny Machado. Only these two players represent a significant upgrade to the current Cubs roster in both the short- and long-term.
Yet signing Harper or Machado would saddle the Cubs with a $30-40 million annual commitment right before they have three consecutive years of significant roster overhaul. Can they can afford to both sign Harper or Machado and still re-sign or replace their other players?
To answer this question, we need a comprehensive picture of the Cubs’ financial outlook over the next three years. We need to know how much money the current roster is likely to cost, including arbitration raises for all of the Cubs’ young stars through 2021. So I estimated arbitration salaries for all current players using historical comparisons.
The results show us that the Cubs have the following money already committed over the next three years:
|Year||Current Roster Payroll|
Also, the 2019 Cubs are projected to only have $2.7 million in cap space. As such, I expect 2019 will be the year the Cubs finally blow past the cap and spend to their financial limits.
Which brings us to the next step in creating our comprehensive picture, an estimate of the Cubs’ upper spending limits. I used two different methods — both shown below — to calculate how much money the Cubs have to spend between 2019 and 2021. A detailed explanation of how these numbers were calculated would take an entire post in itself, but the curious among you can follow along in this spreadsheet and this accompanying explanation.
Available Payroll for Free Agents 2019-2021
|Year||Low Estimate||High Estimate|
|2019||$21.5 million||$40 million|
|2020||$61 million||$75 million|
|2021||$80 million||$93 million|
This table already factors in luxury tax payments. As such, all of this money can be used for free agent signings, including re-signing current players as their contracts expire or replacing them with new free agents.
But is this enough money for either Harper/Machado and keeping the roster together?
Well, in 2020, the Cubs will need to replace Pedro Strop, Brian Duensing, and Steve Cishek (I presume Brandon Morrow’s option will vest). All three were either free agents or signed extensions this past offseason, thus all three are being paid at market rate. Thus, replacing them should cost about their current salaries ($16 million), with a 5 percent bump for inflation. That equals $17 million annually.
I also choose to assume that the Cubs farm system will provide at least one high-leverage setup arm or closer by 2021, so I did not budget to replace Morrow. Setting aside $17 million from 2020 leaves between $44-58 million.
In 2021, the Cubs will need to replace Kyle Hendricks, Jose Quintana, and Tyler Chatwood. There are simply too many unknown variables to provide an accurate estimate as to what it would cost to re-sign those three (or somewhat equivalent) players. Also, there is the possibility the Cubs may have developed one or more homegrown starters by 2021. Plus, Mike Montgomery may have supplanted Chatwood by then.
But for the sake of argument, let’s assume the Cubs budget $50 million annually to collectively replace Hendricks, Quintana, and Chatwood. That million should buy an ace ($27M), a middle-of-the-rotation arm ($15M), and an innings eater ($8M). Jon Lester has a $25 million vesting option that my numbers assume will be paid. Thus, even if he leaves, the $25 million can be used to sign his replacement. Lester’s long term replacement, however, is going to need to come from the farm system if the Cubs have any hope of keeping the infield together in 2022.
The only other free agent loss of note from 2019-21 is Ben Zobrist, but Ian Happ already appears to be his heir apparent since both are switch-hitters with positional flexibility. So we do not need to budget any money to replace Zobrist.
Subtracting both the $17 million and the $50 million from the original available payroll table results in the following cash left over to allot to Harper or Machado:
Available Payroll for Harper or Machado
|Year||Low Estimate||High Estimate|
|2019||$21.5 million||$40 million|
|2020||$44 million||$58 million|
|2021||$14 million||$26 million|
|3 year avg.||$26.5 million||$41 million|
As noted above, either player is going to cost in the $30-40 million average annual value (AAV) range. If my high estimate is accurate, the Cubs can afford Harper or Machado without compromising the rest of the roster. The low estimate would seem to place both out of reach. But remember that if the Cubs do acquire Harper or Machado, they would be able to trade away the player he is replacing.
That would likely be Addison Russell (Machado) or Jason Heyward (Harper). Moving Russell’s arbitration salaries off the books frees up around $8 million annually. Trading Heyward would likely require the Cubs to eat half his contract, but that would still save $10 million annually. With those savings, the Cubs might still be able to afford Harper or Machado under my low estimate.
This is not to say the Cubs will sign either of those players, only that they likely can afford to do so and still keep the team together through 2021.
Beyond that, my crystal ball completely fails me. The entire infield of Russell, Anthony Rizzo, Kris Bryant, and Javy Baez is set to hit free agency, along with Montgomery and Kyle Schwarber. The Cubs can re-sign some of them, but not all. The team might restock from the farm system and blitz on, or the wheels might start coming off and the Cubs will begin a decline followed by another rebuild.
Regardless, I doubt the Cubs are going to let the 2022 season dictate this coming offseason. They recognize their current competitive window runs through 2021, and will likely act accordingly. As good a team as the 2019 Cubs might be with Machado or Harper added to their already stacked lineup, they pale in comparison to the 1988 Daydream Cubs.
Bonus Feature – Daydream Cubs: 1988
In a parallel universe where Moshe was transported back as GM of the 1981 Cubs, we rejoin the Daydream Cubs. Click here for 1987, or check out all drafts & rosters to date.
1988 Draft: (#) Player’s real-life selection round, AS= All-Star; HoF = Hall of Famer; GG = Gold Glove
- Round 1: Marquis Grissom (3) – CF: AS (x2), GG (x4)
- Round 2: Jim Edmonds (7) – CF: AS (x4), GG (x8)
- Round 3: Kenny Lofton (17) – CF: AS (x6), GG (x4)
- Round 4: Mike Piazza (62) – C: HoF
Grissom, Edmonds, and Lofton combined for 16 Gold Glove awards in centerfield are all available in a single draft. Good god! Grissom will be the odd man out with the Daydream Cubs, never making it off the bench. The real steal, of course, is Piazza, who will forever hold the record for lowest draft round of a Hall of Famer. Roster-wise, Fred McGriff, Mickey Tettleton, and John Smoltz all debut for the daydream Cubs.