Back in October 2015, I wrote this article with an eye on the Cubs' spending over the previous nine years as a means of looking toward what the club might spend in the offseason. At that time, it seemed like the Cubs would be big players for front-line starting pitchers like David Price, Zack Greinke, and Jordan Zimmermann though the club wouldn't need to make any significant additions to the outfield or infield given the depth of impact talent at both spots.
As a starting point, I prepared the following chart:
|Draft Bonuses||Dead Money||TOTAL|
As the chart showed, the Cubs' spending took a huge leap in 2015, setting a new franchise high and increasing by a stunning amount over 2014. Of course, at that same time, I pointed out that the Jon Lester money that had been "rolled over" from 2014 to 2015 could be considered to have made the 2013-15 trendline go from approximately $120 million to $130 million to $140 million. That very logical progression makes lots of sense and paints a cleaner narrative than that shown in the chart above.
Fast forward to today: the 2016 season is upon us and we all know what happened in the offseason. The front office did add an impact starting pitcher, but the choice was a short, two-year deal for John Lackey, not a massive commitment to one of the younger names above. As for the infield and outfield, the club added arguably the top free agent in both position groups when Ben Zobrist and Jason Heyward came on board.
So what did it mean for the club's spending? Was the $120 million to $130 million to $140 million trendline the logical approach for the club or was the $160 million figure a new jumping-off point given the financial resources of the Ricketts ownership group? Let's see.
As I've done in previous financial updates, I'll take a look at spending in four separate categories before summarizing the total figures.
The Cubs have no dead money on the books in 2017, but for this year, the category is the third largest of the last decade primarily by virtue of Edwin Jackson's large tally. 2016's dead money trails 2012 (Carlos Zambrano) and 2014 (Alfonso Soriano).
|Jackson, Edwin||RHP||$10,492,500||$11 million less minimum salary from Miami|
|Brothers, Rex||LHP||$232,787||30 days termination pay|
Paying players to play for other teams is never satisfying or efficient, but at least this is the final year on Jackson's disastrous deal.
This category looks significantly different now than it did a few months ago. Back then, it appeared as though the Cubs would sign a single compensation free agent while replenishing said pick by allowing Dexter Fowler to walk in free agency. Instead, the surrendered picks for both Lackey and Heyward, and the club did not receive a compensation pick for Fowler as Dexter returned to the Cubs in February. Accordingly, this bucket will be quite small.
As I've done in the past, I will continue to assume that the Cubs will overspend their bonus pool to the maximum extent possible before losing future draft picks. In order to perform this estimate, I have given the Cubs the same draft slot as the Angels from 2015, inflated the slot values of each pick by 4.6% per the estimate from Major League Baseball, and assumed that the Cubs will overspend their pool by 5%. Accordingly, here is the spending projection:
|Draft Rounds 1-10||$2,346,080|
|Draft Rounds 11-40||$1,000,000|
Needless to say, this figures to be one of the biggest challenges of Jason McLeod's career. The front office has hit again and again while drafting in the top ten, but the regime's later picks have yet to bear fruit.
International Bonuses + Salaries
In addition to having limited draft capital, the front office has their work cut out for them internationally. Presuming that the club does not add any more impact talent before the 2015 signing period closes on June 15, 2016 -- something that is decidedly not a foregone conclusion even though it requires a dollar-for-dollar tax -- the overwhelming 2016 international expenditure will come in the form of a penalty payment. Ouch.
As was the case for the draft spending projection, I presume that the Cubs have the No. 28 slot, 4.6% inflation, and a 0% overage this summer:
|July 2nd Estimate||$2,248,900|
At least the 2017 number figures to be tiny and will not feature a tax.
And finally, we reach a record-high payroll. This won't be a surprise to anyone, though I will point out something genuinely surprising on the way for 2017.
|La Stella, Tommy||2B||$532,000|
Just in case you don't want to scroll all the way back to the top to check how quickly and rapidly the 40-man spending has jumped, the 40-man spending didn't eclipse $103 million in any year from 2012-14 before jumping to $127 million last year. 40-man spending in 2016 figures to be approximately 193% of 40-man spending just two years ago. Wow.
Before we move onto the total 2016 spending output, it's worth pointing out that the Cubs figure to spend decidedly more in 2017 than in 2016. Even though Edwin Jackson's $10.5 million commitment is coming off the books, pay increases for Jason Heyward ($6.5 million), Jake Arrieta (approximately $7 million), John Lackey ($3 million), Ben Zobrist ($4 million), Jason Hammel ($3 million if his option is exercised), Hector Rondon (approximately $3 million) and Pedro Strop (approximately $2 million) have the 40-man payroll on track to jump nearly $15 million when combined with deals for Jorge Soler, Justin Grimm, and Neil Ramirez, even if every other roster spot is filled by minimum-salary players.
Total Expected 2016 Spending
Alright, we've see all of the categories at this point, so here is a simple synopsis:
|Draft Bonuses||Dead Money||TOTAL|
That number has climbed. A lot. Whether the Ricketts family decided to loosen the purse strings, Crane Kenney and company generated way more income, or, most likely, a combination of the two, the Cubs are throwing around tons of cash despite the fact that their budget for acquiring new amateur talent in 2016 is only about $5.7 million, a far cry for the figures in other years under the Ricketts and Theoyer regimes.
I'm pretty sure that 100 wins or so at the Major League level will keep even their starkest critics quiet.