Signing Bryce Harper Would Cost Cubs Around $20M in Penalties

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.

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5 Comments

  1. Brendan – in your estimation, would signing Harper make the Cubs the #1 highest payroll in MLB?

    I always hated, back in the day – feeling like teams (such as the Yankees) just went out and BOUGHT a great team. I don’t want that perception for the Cubs. They have had big signings over the last 3-4 years, although they have been nicely counter-balanced by young talent that they either drafted or traded for – that emerged as a Cub. It feels like a Harper signing might tip that scale.

    1. I have to admit my hatred for the Yankees was exactly the same as yours; buying a WS title. This year, I came to the conclusion the Cubs operate in exactly the same way. I think our initial anger was generated by knowing Tribune ownership was NEVER going to go that route. It still sucks that smaller market teams have little chance of going all the way. The Brewers just showed it can be done…ALMOST.

      1. I don’t know about that. Cleveland and Kansas City are small market, so are St. Louis, Detroit, and Tampa – and they have all been to the W.S. in the last 10 years.

        On one hand, the Cubs ARE a large-market / large budget team – so I do want them to spend. On the other hand, I prefer it when any team feels more home-grown than purchased.

  2. I think Rickett’s should use the 50mil software windfall as the brace for all of this. Just sign Harper and take the hit now. I bet ARZ would at least entertain a deal of Darvish for Grienke.

  3. If 10 spots on a pick and 20M keep them from signing Harper Theo should just step down so someone else can correct all his bad moves that got the payroll there.

    I hate the idea not trying to take advantage of the window being open by worrying if they can keep guys down the line. There is no lock we can keep those guys later. So it unbelievably dumb of the FO not to get the best of the group who wants to be here locked up.

    139 OPS+ over 3957 PA at 26-024d for Harper
    137 OPS+ over 2471 PA at 26-309d for Bryant
    128 OPS+ over 4560 2471PA at 29-093d for Rizzo
    103 OPS+ over 1912 PA at 25-343d for Baez, 126 in 2018

    How much lost revenue did they have each year eating L’s to get some of those players, it has to be less than 20M?

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