Let’s imagine Bryce Harper suiting up in a Cubs uniform alongside Kris Bryant and the rest of the crew. Pretty fun, right? Maybe it’s not as fun to imagine for Tom Ricketts, who would pay a hefty luxury tax penalty to bring the generational talent aboard.
Right now, the Cubs’ estimated payroll for 2019 is roughly $222 million. If Harper is signed for something like $35 million per season, the payroll jumps to $257 million. Sprinkle in a few other moves and account for some variance, and the total figure for 2019 would probably be somewhere around $266 million, maybe more.
So how much money would the Cubs be paying in 2019 if Harper is brought in for next season and beyond? The answer is something around $54 million, which includes his potential record salary plus luxury tax penalties accumulated by going over each of the three thresholds.
|TAX THRESHOLDS||Penalty Cost ($M)|
|Tier 1 Penatly ($206M)||4.0|
|Tier 2 Penalty ($226M)||6.4|
|Tier 3 Penalty ($246M) assuming $266M payroll||8.5|
|Total 2019 cost for Harper||53.9|
There’s also the matter of seeing their first pick in the draft dropped by 10 spots, through the difference in projected value of such a penalty is minimal. None of this is to suggest the Cubs shouldn’t pursue Harper, mind you, it’s a simple exercise in trying to determine what the total actual cost would be next year.
After 2019, however, the Cubs may gain a little financial flexibility and might not have as big a luxury tax hit. The real question becomes whether ownership wants to pay the surcharges and fees in addition to a payroll that’s already increased compared to recent seasons.
Clarification note: Consider the $20M estimate is the total penalty assuming the Cubs pay $265 M next season. Since the Cubs are already at $222 M, the specific amount of penalties against the Cubs caused by Harper’s signing would be about $14-16 M.