An updated estimate of the 2020 Cubs payroll and luxury tax

As you well know, the Cubs are one of just two teams (the Rockies are the other) to not have signed a single player to a fully-guaranteed major-league contract this offseason. (Ryan Tepera and Dan Winkler signed major-league deals, but they are not fully guaranteed.)

The ostensible reason for this is that the Cubs supposedly want to have their luxury-tax figure go below the $208 million first level, so they wouldn’t pay any tax for 2020. That would also “reset” their tax level for 2021, as the penalties for going into the tax levels increase if a team does it for two or more consecutive seasons.

Further, although Kris Bryant signed a 2020 contract providing him with $18.6 million for 2020, we still do not know the status of his service-time grievance. An arbritator was expected to rule by the Winter Meetings... and then by the end of last week... and now, who knows? The assumption has been that the Cubs haven’t done anything because they are waiting to see if KB will be a free agent after 2020 or 2021.

What a mess. Here are the Cubs payroll and luxury tax numbers as I have them, as of today, Monday, January 13:

There are a couple of things that need explanation in the numbers above. First, you will note there are 27 players listed. That’s because, in my opinion (and it is my hope!), Daniel Descalso will be released before Opening Day. The Cubs still have to pay him regardless. They also owe him a $1 million buyout for 2021 in that case. It’s not clear whether that $1 million would count in the 2020 tax calculation if the release happens, so for now, I’m leaving it out.

Also, every place I have seen Craig Kimbrel’s tax hit for 2020 says it’s $14,333,333 — except for Spotrac, which has Kimbrel’s tax salary listed as $13,096,774. For our purposes here, then, I’m leaving that as $14,333,333. If the Spotrac number is correct, it would lower the Cubs tax figure by $1,236,559.

The bottom line, then, with all these numbers is this: There’s no doubt in my mind that the Chicago Cubs and the Ricketts family could afford to break through the first two luxury tax levels — in other words, spend nearly $40 million more than they are — if they chose to. They have chosen not to. There’s been no public acknowledgment or explanation for this at all. Tribune columnist Paul Sullivan called for them to do that in his Monday piece:

There’s a difference between not having any money and not intending to spend more money than necessary to avoid the luxury-tax threshold. No one believes Chairman Tom Ricketts when he says the Cubs don’t have any money. It’s a ludicrous claim.

Most fans really don’t understand why the Cubs haven’t made any moves and why the team feels the need to trade Kris Bryant or other stars to get under the luxury tax. If the Cubs don’t feel they can sign them to long-term deals to remain within their budget, be transparent about it and say so.

As is my custom in these articles, I am going to turn the rest of it over to BCBer The Deputy Mayor of Rush Street for his analysis.

Well folks, at this point of the offseason there seems no denying that the allowed spending for the coming season is a maximum of $208 million, to get the Cubs back out of the tax penalties. And this is not going to be the place for me to haul out my soapbox, today we deal with the world as it is.

While we await the result of Bryant’s service time arbitration and hold our breath on a possible trade, the Cubs actually do (just barely) have the personnel to put out a team if nothing changes between now and then. In addition, while the Cubs are a couple million over their $208 million budget at this point, they would still be in striking distance if they lined up with this 26-man roster. The key is that usually I typically leave Theo Epstein an $8-10 million cushion as a July trade budget expense. In this case our BCB budget update comes with no trade budget at all — but if the team “cooperates” and is not contending by mid-season, Theo can be a seller and move salary as he moves players. The trade budget would then become a negative number, and thus allow the Cubs to get under the luxury tax threshold.

Now if David Ross works magic and has the team in contention... is Tom Ricketts really going to force Epstein to trade off useful players? And it then follows that if the Cubs are going over the tax again, surely they can be allotted at least a small trade budget to help the team, right?

One other scenario that’s occurred to me is contract extensions. Javier Baez’s arbitration-avoiding settlement was suspiciously high for a team on such a tight budget. Both Baez and Willson Contreras recently sent out possibly-innocent, possibly-cryptic messages on social media expressing their happiness. With all the bad mojo flying around the team right now, and even the Cubs Convention struggling to sell out for possibly the first time, I’m willing to say that I’ll be surprised if the Cubs don’t announce a contract extension (maybe two) at the opening ceremony of the convention late Friday afternoon. Let’s just say my Dep sense is tingling on this one, it feels right — and feels needed to please the customers.

(As the Cubs did with Kyle Hendricks and David Bote last year, any contract extensions would likely not go into effect until 2021 — which means they won’t change the player spending budget as laid out for this season.)

The bottom line for me today is that even with a Kris Bryant trade, the Cubs are going to have little additional funding to sign more help for the 2020 Cubs. This doesn’t figure to be a year for wheeling-dealing — unless the Cubs are out of the playoff race, and Epstein is trying to re-load the team. For the most part what you see is what you’re getting. With some injury ‘luck’ — that just might be enough if the Cubs catch a few breaks.