An updated estimate of the Cubs 2021 payroll and luxury tax

The Cubs have made a flurry of roster moves over the last few days, filling the 40-man roster by officially signing Joc Pederson, Trevor Williams and Andrew Chafin, claiming Sergio Alcantara on waivers and designating Max Schrock for assignment.

There’s been enough turnover in the Cubs’ 40-man roster that it now contains 12 players who were not in the organization when the abbreviated 2020 season began last July, and just six players (Kyle Hendricks, Anthony Rizzo, Javier Baez, Kris Bryant, Willson Contreras and Jason Heyward) left from the 2016 World Series champions.

With all the new names (and salary numbers now available), it seemed time to do another update on what the 2021 payroll and luxury tax figures look like, since the last such post here was about a month ago.. Fortunately, we have BCBer The Deputy Mayor of Rush Street looking into this. Below is a table showing the current salaries and luxury tax hits for each player and the totals for 2021, and following that, the rest of this post is Deputy’s. (Note: The individual numbers below the dashed lines are not included in the totals.)

Now, here’s Deputy’s analysis.

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The 2021 Cubs Roster: I Think We Know Which Way Jed is Going By Now

TOP LINE: We’re about 10 days from “pitchers and catchers,” and while there still may be a couple of late bargain additions, it appears that general manager Hoyer has assembled the team he will send out to try and defend the NL Central title.

Here’s the last three weeks of moves that affect the Cubs’ 40-man Roster:

January 22 - Signed C Austin Romine
January 28 - Signed RHP Kohl Stewart
February 5 - Signed LF Joc Pederson
February 5 - Signed LHP Andrew Chafin
February 5 - Signed RHP Trevor Williams
February 5 - Claimed SS Sergio Alcantara off waivers
February 5 - DFA’d 2B Max Schrock

The Cubs’ 40-man roster is now full. Alcantara is not expected to make the 26-man playing roster, and is likely to be run through waivers if an additional 40-man spot is needed for a late signing.

(Note, these figures are for each player’s “cap hit,” the charge against the Cubs’ luxury tax spending level. The base luxury tax threshold is $210,000,000 in 2021, the final year of the current CBA.)

Players with Negotiated Contracts:

Heyward $23,000,000 (signed through 2023)
Rizzo $16,500,000 (Pending Free Agent)
Kimbrel $14,333,333 ($16M team option in 2022, $1M buyout)
Hendricks $13,875,000 (signed through 2024)
Pederson $7,000,000 (Pending Free Agent via mutual option for 2022)
Bote $3,000,000 (signed through 2024)
Chafin $2,750,000 (Pending Free Agent via mutual option for 2022)
Romine $1,500,000 (Pending Free Agent)
Darvish $3,000,000¹
============TOTAL $84,958,333============

¹ - The Cubs are paying $3,000,000 cash/luxury tax spending on Yu Darvish’s 2021 contract as part of his trade to San Diego.

Arbitration Eligible Players:

Bryant $19,500,000 (Pending Free Agent)
Baez $11,650,000 (Pending Free Agent)
Davies $8,630,000 (Pending Free Agent)
Contreras $6,650,000 (Team Control through 2022)
Happ ($3,250,000 or $4,100,000) (Team Control through 2023)
Williams $2,500,000 (Team Control through 2022)
Ryan $800,000 split contract (Team Control through 2023)
Winkler $900,000 (Pending Free Agent)
Holder $750,000 non guaranteed (Team Control through 2023)
============TOTAL $54,630,000 or $55,480,000============

Note: The MLB minimum salary for 2021 will be approximately $570,000 - subject to a COLA adjustment from last year’s $563,500 - which was an $8,500 raise from the $555,000 minimum in 2019.

Pre-Arb Players more likely to make the 26-man roster:

Adam $580,000 (2 options)
Alzolay $585,000 (0 or 1 option)
Ervin $570,000 (OUT OF OPTIONS)
Fenter $570,000 (Rule 5 Selection - 3 options)
Hoerner $575,000 (3 or 4 options)
Mills $590,000 (OUT OF OPTIONS)
Stewart $700,000 (2 options)
Underwood $575,000 (OUT OF OPTIONS)
Vargas $575,000 (OUT OF OPTIONS)
Wick $585,000 (1 option)
Wieck $575,000 (1 option)
===========TOTAL $6,480,000===========

Pre-Arb Players more likely to start in the minors

Alcantara $570,000 (OUT OF OPTIONS)
Amaya $570,000 (2 or 3 options)
Maples $570,000 (OUT OF OPTIONS)
Marquez $570,000 (3 or 4 options)
Tyson Miller $570,000 (2 options)
Norwood $570,000 (1 option)
Rodriguez $570,000 (2 or 3 options)
Steele $570,000 (1 or 2 options)
Stock $570,000 (1 option)

Other players on the 40-man Roster: Cory Abbott, Christopher Morel, Keegan Thompson

Other Expenses:

40-man Roster Players in Minors $2,250,000
Pension Payments & Sundry Expenses $15,500,000

(Reserve Withheld for Trades/Buffer)² $0 (To be determined)
============TOTAL $17,750,000============

GRAND TOTAL FOR CAP PURPOSES $164,668,333

LUXURY TAX THRESHOLD $210,000,000
CUBS CURRENTLY UNDER THE TAX BY $45,331,667

²- In this case, I imagine if the budget is closer to the tax threshold, that will be a buffer against going over. If the budget is lower than customary, it would then be up to Hoyer to set a legitimate trade budget that he wants to hold back for July.

Note: Jon Lester’s buyout of $10,000,000 is a 2021 cash expenditure, but it is for money that’s already been accounted for in previous seasons for luxury cap spending purposes. There is no “cap hit” for a contract at the time a team option is ‘bought out’. The same holds for the $1,000,000 buyout paid to Daniel Descalso.

Lester $10,000,000 buyout - cash without cap hit
Descalso $1,000,000 buyout - cash without cap hit
Hendricks $125,000 - salary over cap hit
Bote <-$2,000,000> - cap hit over salary
Trade Budget $0 - optional expense
TOTAL $9,125,000 - cash outlay over cap hit total

ADJUSTED FOR ACTUAL PAYROLL EXPENDITURES IN 2021

GRAND TOTAL IN CASH OUTLAY $173,793,333

Note: The cash outlays above are not reflected in the table.

Projected 26-man Roster:

OF - Pederson, Happ, Heyward, Ervin
IF - Bryant, Baez, Rizzo, Bote, Hoerner, Vargas
C - Contreras, Romine
13th position player - [Alcantara/Ian Miller/Matt Duffy/Nick Martini/ Patrick Wisdom/???]

SP - Hendricks, Davies, Mills, Williams, Alzolay
RP - Kimbrel, Ryan, Winkler, Adam, Chafin, Wick, Wieck
13th pitcher - [Underwood/Stewart/Gray Fenter/Shelby Miller/???]

(Note: I would not be surprised, if any side deal is struck that teams are allowed to carry 14 pitchers.)

BOTTOM LINE: While Hoyer can now put a representative team on the field, and have a puncher’s chance in the NL Central, there still may be a last minute addition or two, particularly if the organization feels guys like Nico Hoerner and (maybe) Adbert Alzolay might benefit from more time in the minors.

But sitting around $175 million in actual spending, if there was a budget “boost” allowed by team ownership in the late stages, I imagine $180 million is a likely limit at this point, and then we’ll see. Do they contend, and Hoyer goes back to ask for more money in July to pick up some veteran help, or are millions saved in the end by a July fire sale of pending free agents?

Either way, I think the “Powerball Dream” has been dashed, and this roster is the Adventure which Jed Hoyer has chosen for us in 2021.