A very preliminary estimate of the Cubs 2022 payroll and luxury tax

As is traditional here around this time of year, I’m going to take a preliminary look at what the Cubs’ payroll and luxury tax figures will be for 2022.

There are more caveats than usual this time. First, the list of players you see below is likely to be very different by Opening Day 2022 — whenever that is. The Cubs are going to spend this winter, and that figure is likely to be upwards of $70 million beyond what they are already committed to via multiyear deals, arbitration salaries and what pre-arb players will be given. Generally, the latter winds up being a bit over the minimum salary for guys who have some MLB experience, which most Cubs pre-arb players do have.

Beyond whatever signings and/or trades the Cubs might make between now and Opening Day, which will change these figures significantly, we are staring into the abyss of a possible owners’ lockout of players once the current collective-bargaining agreement expires December 1. That means December 2 is “Lockout Day.” That’s a day I hope won’t come, but everyone in baseball must prepare for it.

What I post below, then, are simply the figures we can know or estimate as of today, November 15.

Remember, these are only estimates, and some of the players listed certainly will not be on the Cubs’ Opening Day roster.

I turn the rest of this post over to BCBer The Deputy Mayor of Rush Street, who as always has produced a detailed analysis of where the Cubs might be heading payroll-wise. Note that the total numbers above and his are a bit different due to the way he calculated his totals — it’s all explained in the text. All yours, Dep!

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The 2022 Cubs Roster: Uncertainty in the Face of Financial Flexibility

TOP LINE: We’re back with another series looking at the construction of the roster for next season, and the 800-lb. gorilla in the room is the ongoing CBA Negotiations, which will ultimately shape how the next Cubs pennant contender is built. Just in the last five years with a fairly firm salary cap luxury tax, a general consensus by league GMs on finding maximum value for their available money has radically changed the free agent market. And that’s true whether you root for a big-market franchise like the Cubs who are limited by luxury tax penalty rules, or even if you root for a mid-market team like the Brewers or that other Chicago team, who are limited by lower baseball revenues due to a less broad/affluent fan base.

Now this article and series aren’t about the CBA negotiations or the fairness of the current or future deal. This is about building the 2022 roster in particular. And the first thing I would advise everyone to bear in mind that Jed Hoyer will be looking at future seasons before he signs any new five-year guaranteed deals, much less handing out another eight-year, $184 million contract.

As we all know, the final run of the 2016 Core players was met with a modestly diminished budget, some obvious holes left in the opening day roster... and eventually a gut-wrenching 24 hours at last year’s trade deadline. Helped (?) by the beginning of the season held with limited seating capacity, the Cubs re-set their luxury tax penalty status last year with a player payroll that ran at a projected $173 million last year, well under the $210 million luxury tax cap.

IMPORTANT TO NOTE: Since we can’t know what terms a new CBA might include, or when it might be settled, for now we’ll have to make do with assuming the current CBA/luxury tax rules remain in force. (We’ll talk about what the next CBA means to the roster when the time comes.)

The next dates we need to keep in mind are:

November 19: Minor league players must be added to the 40-man roster to prevent their being exposed to the Rule 5 Draft,

December 1: The deadline for clubs to offer eligible players salary arbitration (or non-tender them, making the player a free agent), commonly called the “non-tender deadline”.

December 2: - More vital for our purposes this year might be this date. The current CBA ends at 11:59 p.m. on December 1, so this date is being bandied about as the day for a possible lockout being imposed by MLB owners in the absence of a new CBA. A lockout would basically bring all roster business to a screeching halt, and presumably set up a mad dash to sign players in a very short period before Spring Training or whatever ramping-up period is decided on when the new CBA is (eventually) agreed to.

Plucking Wade Miley off waivers aside, the possibility of this lockout and uncertainty over the payroll limits and penalties in a new labor contract will likely make for a slow period of signings over the next three weeks, and again chill the free agent market...

Putting that preface behind us for now, here’s a preliminary look at the 2022 Chicago Cubs roster:

Robinson Chirinos, Zach Davies, Matt Duffy, Jose Lobaton, Adam Morgan and Austin Romine elected free agency.

The Cubs claimed starting pitcher Wade Miley off waivers (and exercised his $10M team option for 2022).

David Bote, Michael Hermosillo, Nick Madrigal, Tommy Nance, Alfonso Rivas, Brad Wieck and Patrick Wisdom were returned to the 40-man roster from the 60-day Injured List.

Joe Biagini, Rex Brothers, Erick Castillo, Johneshwy Fargas, Trent Giambrone, P.J. Higgins, Jonathan Holder, Tyler Ladendorf, Nick Martini, Tyler Payne, Adrian Sampson, Kohl Stewart and Trayce Thompson were all sent outright to the Iowa Cubs and removed from the 40-man roster. (I expect most of them will elect free agency; Brothers already has done so.)

That leaves 35 players on the Cubs’ 40-man roster to begin the offseason. (Note, these figures are for each player’s “cap hit,” the charge against the Cubs’ luxury tax spending level. The base luxury tax threshold will be assumed to remain at $210,000,000 until a new CBA is agreed to.)

Players with Guaranteed Contracts

Heyward $23,000,000
Hendricks $13,875,000
Miley $10,000,000
Bote $3,000,000 (2 options — expected to start the season on the IL)
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TOTAL $49,875,000
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Arbitration Players (based off MLBTR Estimates)

Contreras $8,700,000
Happ $6,500,000 (2 options)
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TOTAL $15,200,000
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Note: The MLB minimum salary for 2021 was $573,000, so we’re going to assume that stays level, pending a new CBA agreement.

Pre-Arb Players more likely to make the 26-man roster as things stand

Adam $595,000 (1 option)
Alcantara $575,000 (OUT OF OPTIONS)
Alzolay $590,000 (OUT OF OPTIONS)
Deichmann $575,000 (2 or 3 options)
Effross $575,000 (3 options)
Hermosillo $575,000 (OUT OF OPTIONS)
Heuer $585,000 (3 options)
Hoerner $585,000 (2 options)
Madrigal $590,000 (3 options)
Mills $620,000 (OUT OF OPTIONS)
Nance $575,000 (2 options)
Ortega $590,000 (OUT OF OPTIONS)
Rivas $575,000 (3 options)
Schwindel $590,000 (2 options)
Steele $590,000 (1 option)
Thompson $580,000 (2 or 3 options)
Wisdom $590,000 (1 option)
Wick $600,000 (1 option)
Wieck $580,000 (OUT OF OPTIONS)

+2 open spots $1,146,000 — placeholder until backup catcher and one more SP are added

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TOTAL $12,281,000
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Pre-Arb 40-man roster players more likely to start in the minors

Abbott $573,000 (2 options)
Amaya $573,000 (1 or 2 options)
Canario $573,000 (2 or 3 options)
Espinoza $573,000 (1 or 2 options)
Marquez $573,000 (2 or 3 options)
Megill $573,000 (2 options)
Morel $573,000 (2 or 3 options)
Rodriguez $573,000 (1 or 2 options)
Rucker $573,000 (3 options)
Vizcaino $573,000 (2 or 3 options)

Other Expenses:

40-man Roster Players in Minors $2,250,000
Pension Payments & Sundry Expenses $16,000,000

(Reserve Withheld for Trades/Buffer) $10,000,000 (this is an optional expense, but some amount figures to be held back from whatever Tom Ricketts sets the baseball budget at)

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TOTAL $28,250,000
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GRAND TOTAL FOR CAP PURPOSES $105,606,000

LUXURY TAX THRESHOLD $210,000,000

CUBS START UNDER THE TAX BY $104,394,000

ADJUSTED FOR ACTUAL PAYROLL EXPENDITURES IN 2022

GRAND TOTAL IN CASH OUTLAY $94,241,000

(This figure includes deducting $1,365,000 in adjustments between contract payouts and cap valuations, and less the optional $10,000,000 trade buffer.)

Projected Roster

OF - Hermosillo, Ortega, Happ, Heyward, Deichmann
IF - Wisdom, Hoerner, Madrigal, Schwindel, Rivas, Alcantara (David Bote is expected to start the season on the IL)
C - Contreras

SP - Hendricks, Miley, Mills, [Alzolay/Steele]
RP - Wick, Heuer, Thompson, [Alzolay/Steele], Wieck, Adam, Effross, Nance

(1 backup catcher spot, 1 starting pitcher spot left open)

Minors: Cory Abbott, Miguel Amaya, Alexander Canario, Anderson Espinoza, Brailyn Marquez, Trevor Megill, Christopher Morel, Manuel Rodriguez, Michael Rucker, Alexander Vizcaino

So now we’re left to wonder what kind of baseball budget Jed Hoyer has been given, considering that Marquee Sports Network doesn’t appear to have pushed the revenue needle much, attendance fell off after the July clearance sale, and the uncertainty of any new CBA provisions that might create different incentives.

Al has been rolling out various free agent options over the past week or so, Freddie Freeman, Kyle Schwarber, Carlos Rodón, Javy Báez and Jon Gray, among others.

You also might have noticed that free agency opened up November 8, a week ago, and no “major” moves have happened in the market yet. The Cubs’ picking up Wade Miley and his $10 million option might be the “biggest” move of the winter so far.

Among those who did NOT receive qualifying offers: Clayton Kershaw, Carlos Rodón, Anthony DeSclafani and Jon Gray. The most surprising of the bunch might be Gray. First the Rockies didn’t trade him in July, didn’t agree to a contract extension with him, and now won’t get any compensation at all if he signs elsewhere.

Why does this matter? As a refresher, the Cubs fall in this group for signing a free-agent who rejects a QO:

• Lose their 2nd-highest selection in the 2022 Draft.
• Lose $500,000 from their IFA (international) bonus pool for the upcoming signing period.
• Signing two such players would mean also losing their third-highest remaining draft pick and an additional $500,000 of IFA money.

This is an example of how Baseball itself acknowledges that spending more money on players tends to make a team more likely to win (divisions, playoff series, Championships) than spending less money.

BOTTOM LINE: In 2019 I suggested there would be no room to re-sign Nick Castellanos and Cub fans would have another cold stove winter. Last year I opined that I think it was more likely than not that Jed Hoyer knew he was already over his baseball budget and would look for further cost savings. (Then he non-tendered Schwarber.)

But I’m not here to make a specific prediction on where the baseball budget sits, or how Hoyer may eventually put this Cub team together. What I do see for this off-season is the penalties involved are why I would be surprised if Hoyer goes for any free agent who turned down a qualifying offer, he’s on a rebuild of some length whether he’s willing to admit it or not, and I don’t see this team as being ripe for the “Jon Lester 2.0” signing to announce the Cubs are a serious contender again. Therefore, better to hold onto those draft picks and IFA money while the team is still seeking more young talent.

My hope is Hoyer uses his money to at least sign some prospective July trade chips on 1-year deals... and coach ‘em up. Regardless of if the budget is closer to $140 million or $180 million, there should be at least one “yay!” MOR or better starting pitcher, one or maybe two veteran bullpen arms to help stabilize a young group, and with the likelihood of the DH coming, a bench bat or two won’t hurt, but that can wait for the CBA situation to resolve itself.

And speaking of that 800-lb. gorilla, I think it’s coming. I haven’t heard of any progress in talks, and the proposals which have leaked out remind me more of the taffy pull that took so long to set up the 2020 COVID mini-season, IMO. Which will eventually mean a mad scramble to do three months’ work in a week or 10 days once the agreement is reached. (And as a baseball fan I do hope I’m made to look silly on this point.)

We’ll be back at times through the off-season with updates, and to discuss events as they transpire.