Cole Hamels: Somehow Justin Verlander

[mul21]

Does anyone truly know the luxury tax implications of the various options? From what I've gathered:

[*]Per the CBA, the $6M 2019 buyout has already been included in Hamel's AAV calculation from '13-'18 for luxury tax purposes

[*]If the 2019 option is declined all bets are off for Hamel's 2019+ contract status and luxury tax #; TEX pays $6M buyout

[*]If the 2019 option is exercised Hamel's luxury tax # for 2019 should only be $14M. even if the Cubs have to pay all $20M

[*]Even if the Cubs declined the option so as to force TEX to pay $6M AND had a gentlemen's agreement for $16M (earning him $22M instead of $20M) it would have negative luxury tax implications when compared to simply exercising the option.

 

On declining the option: I feel like the luxury tax implications and any competitive disadvantages associated with it are worse for the Cubs than simply paying an extra $6M in cash for his services, but perhaps I'm wrong.

Not impossible but I would be surprised if Hamel's like the Cubs enough to have them decline the option, thus making him a full fledged Free Agent, while still giving them sole negotiation access. And would the risk of signing him to extra year(s) in the form of a two or three year deal be worth the risk than simply having him at $20M real money & $14M AAV for 2019?

 

How do you figure this is true? The Cubs will be paying the full $20 million if they exercise the option and should have all of that hit their number.

[Transmogrified Tiger]

Does anyone truly know the luxury tax implications of the various options? From what I've gathered:

[*]Per the CBA, the $6M 2019 buyout has already been included in Hamel's AAV calculation from '13-'18 for luxury tax purposes

[*]If the 2019 option is declined all bets are off for Hamel's 2019+ contract status and luxury tax #; TEX pays $6M buyout

[*]If the 2019 option is exercised Hamel's luxury tax # for 2019 should only be $14M. even if the Cubs have to pay all $20M

[*]Even if the Cubs declined the option so as to force TEX to pay $6M AND had a gentlemen's agreement for $16M (earning him $22M instead of $20M) it would have negative luxury tax implications when compared to simply exercising the option.

 

On declining the option: I feel like the luxury tax implications and any competitive disadvantages associated with it are worse for the Cubs than simply paying an extra $6M in cash for his services, but perhaps I'm wrong.

Not impossible but I would be surprised if Hamel's like the Cubs enough to have them decline the option, thus making him a full fledged Free Agent, while still giving them sole negotiation access. And would the risk of signing him to extra year(s) in the form of a two or three year deal be worth the risk than simply having him at $20M real money & $14M AAV for 2019?

 

How do you figure this is true? The Cubs will be paying the full $20 million if they exercise the option and should have all of that hit their number.

 

He's saying that 6 million of that 20 hit Hamels' luxury tax number over the duration of his deal in the form of his buyout already, so it'd be double counting to not have it deducted when the option is exercised. Texas paying the money isn't the relevant bit, that doesn't change anything from a luxury tax perspective. This is a spot that I've never had super high confidence on, so I'm not positive of the answer myself.

[bauermj]

Does anyone truly know the luxury tax implications of the various options? From what I've gathered:

[*]Per the CBA, the $6M 2019 buyout has already been included in Hamel's AAV calculation from '13-'18 for luxury tax purposes

[*]If the 2019 option is declined all bets are off for Hamel's 2019+ contract status and luxury tax #; TEX pays $6M buyout

[*]If the 2019 option is exercised Hamel's luxury tax # for 2019 should only be $14M. even if the Cubs have to pay all $20M

[*]Even if the Cubs declined the option so as to force TEX to pay $6M AND had a gentlemen's agreement for $16M (earning him $22M instead of $20M) it would have negative luxury tax implications when compared to simply exercising the option.

 

On declining the option: I feel like the luxury tax implications and any competitive disadvantages associated with it are worse for the Cubs than simply paying an extra $6M in cash for his services, but perhaps I'm wrong.

Not impossible but I would be surprised if Hamel's like the Cubs enough to have them decline the option, thus making him a full fledged Free Agent, while still giving them sole negotiation access. And would the risk of signing him to extra year(s) in the form of a two or three year deal be worth the risk than simply having him at $20M real money & $14M AAV for 2019?

 

How do you figure this is true? The Cubs will be paying the full $20 million if they exercise the option and should have all of that hit their number.

 

Both this article: https://www.cubsinsider.com/2018/08/18/hamels-pitching-himself-into-20-million-option-for-2019/

Not an attorney but I believe the author is (Evan Altman?)

 

then the actual language from the CBA itself: http://www.mlbplayers.com/pdf9/5450407.pdf

starting on page 117 E. Determination of Salary, and continuing to page 120 Option Buyouts

 

I see:

(ii) Potential Adjustment to Payroll

Notwithstanding subparagraph (b)(i) above, if the Player

ultimately does not receive the Option Buyout, then for the

Contract Year covered by that option, no portion of the Buyout

shall be included in any Club’s final Actual Club Payroll. In

addition, any Club whose final Actual Club Payroll in a previous

Contract Year had included that Buyout (or a portion

thereof) will receive a deduction (in the full amount of the

Buyout included in previous Contract Years) in its final Actual

Club Payroll in the Contract Year covered by that option.

[mul21]

Does anyone truly know the luxury tax implications of the various options? From what I've gathered:

[*]Per the CBA, the $6M 2019 buyout has already been included in Hamel's AAV calculation from '13-'18 for luxury tax purposes

[*]If the 2019 option is declined all bets are off for Hamel's 2019+ contract status and luxury tax #; TEX pays $6M buyout

[*]If the 2019 option is exercised Hamel's luxury tax # for 2019 should only be $14M. even if the Cubs have to pay all $20M

[*]Even if the Cubs declined the option so as to force TEX to pay $6M AND had a gentlemen's agreement for $16M (earning him $22M instead of $20M) it would have negative luxury tax implications when compared to simply exercising the option.

 

On declining the option: I feel like the luxury tax implications and any competitive disadvantages associated with it are worse for the Cubs than simply paying an extra $6M in cash for his services, but perhaps I'm wrong.

Not impossible but I would be surprised if Hamel's like the Cubs enough to have them decline the option, thus making him a full fledged Free Agent, while still giving them sole negotiation access. And would the risk of signing him to extra year(s) in the form of a two or three year deal be worth the risk than simply having him at $20M real money & $14M AAV for 2019?

 

How do you figure this is true? The Cubs will be paying the full $20 million if they exercise the option and should have all of that hit their number.

 

He's saying that 6 million of that 20 hit Hamels' luxury tax number over the duration of his deal in the form of his buyout already, so it'd be double counting to not have it deducted when the option is exercised. Texas paying the money isn't the relevant bit, that doesn't change anything from a luxury tax perspective. This is a spot that I've never had super high confidence on, so I'm not positive of the answer myself.

 

Okay, the $6M being baked into the previous years of the contract makes sense.

[David]

[tweet]

[/tweet]

[Brian]

that's a nice month

[Regular Show]

that's a nice month

 

Indeed. 0.69 ERA for the month?

 

[Old Style]

Somehow Old Pitcher Past His Prime Again?

[imb]

somehow justin bieber

[Regular Show]

I'm still really high on Hamels. I think he's only had one really bad start for the Cubs (last start obviously). No one expected him to continue dominating with a sub-2 ERA. He's changed the way he's pitched since coming here and his fastball has ticked up. His changeup is still really nasty when he's on.

 

I want the Cubs to bring him back next season and think it would be a mistake to not do so. If he is brought back I expect a great season from him -- 3.2-3.5 ERA, 180-200 IP, 8.2 K/9, and 1 or 2 CG (not a huge deal, but helps save the BP). Pretty sure we're bringing him back.

[The_Achiever]

I'm still really high on Hamels. I think he's only had one really bad start for the Cubs (last start obviously). No one expected him to continue dominating with a sub-2 ERA. He's changed the way he's pitched since coming here and his fastball has ticked up. His changeup is still really nasty when he's on.

 

I want the Cubs to bring him back next season and think it would be a mistake to not do so. If he is brought back I expect a great season from him -- 3.2-3.5 ERA, 180-200 IP, 8.2 K/9, and 1 or 2 CG (not a huge deal, but helps save the BP). Pretty sure we're bringing him back.

 

Yeah he was never going to keep that up but I definitely want him back next year. We're going to have to develop or find some longer term options soon but we can just let this guy go when I think he'd be an at-worst reliable 5th starter.

 

Lester

Yu

Hendrix

Q

Hamels

 

Smyly

Monty

????

 

Gonna need some new blood soon.

[Transmogrified Tiger]

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┻┳| •.•) Montgomery is better than Hamels

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[The_Achiever]

Montgomery is better than Hamels

 

I won't argue that, but I want them both on the team next year (barring a trade, etc.).

 

I was just pushing back a bit on the idea that they should not pick up his option. Unless Theo's got something really good planned, I am sure we could use Cole next year too.

[Sammy Sofa]

If he is brought back I expect a great season from him -- 3.2-3.5 ERA

 

This seems REALLY generous for what will be a 35-year old pitcher who has been mostly serious butt for his two most recent seasons.

[Cubswin11]

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┻┳| •.•) Montgomery is better than Hamels

┳┻|⊂ﾉ

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6 man rotation

[Regular Show]

If he is brought back I expect a great season from him -- 3.2-3.5 ERA

 

This seems REALLY generous for what will be a 35-year old pitcher who has been mostly serious butt for his two most recent seasons.

 

I believe in him and think he'll do really well next year (barring injuries). I'm pretty sure pitching in Texas really hurt him and I think he's fixed some mechanical problems since getting here.

 

I have confidence in my prediction, but I also believed in Chatwood before the season started so I don't have a perfect track record.

[Tim]

The Cubs will want to stay under the max penalty for the luxury tax. If they're signing Harper, it will take some very creative juggling to make that work if they are paying Hamels $20M. We also have the following starters under contract/control for next year:

 

Hendricks

Lester

Quintana

Darvish

Chatwood

Montgomery

Smyly

 

With a backlog building at Iowa of guys who have either plus stuff or performance track records.

 

The $20M on Hamels is a *luxury* that the team probably can't afford if they want Harper unless they find a way to dump some other salary.

[Old Style]

The Cubs can decline the option on Hamels and still try to re-sign him for less money, no?

[Tim]

The Cubs can decline the option on Hamels and still try to re-sign him for less money, no?

If he finishes the year strong, why wouldn't he get more on the open market?

 

If he doesn't finish the year strong, why would we want to do it?

[Old Style]

The Cubs can decline the option on Hamels and still try to re-sign him for less money, no?

If he finishes the year strong, why wouldn't he get more on the open market?

 

If he doesn't finish the year strong, why would we want to do it?

Maybe the Cubs will give him a multi-year deal. Maybe they will still pay more than any other team but less than $20MM. I don't know.

[Bertz]

The Cubs will want to stay under the max penalty for the luxury tax. If they're signing Harper, it will take some very creative juggling to make that work if they are paying Hamels $20M. We also have the following starters under contract/control for next year:

 

Hendricks

Lester

Quintana

Darvish

Chatwood

Montgomery

Smyly

 

With a backlog building at Iowa of guys who have either plus stuff or performance track records.

 

The $20M on Hamels is a *luxury* that the team probably can't afford if they want Harper unless they find a way to dump some other salary.

 

Yeah the money is hard to make work. They basically have to trade Chatwood (or Heyward?). I think there's a better chance than we all think of them exercising the option and then trading him. The only reason they didn't do it with Hammel a few years ago was some gentleman's agreement when the contract was initially signed (and the surplus value was likely nominal).

[Jons9999]

How much of the Heyward contract will a team be willing to take on?? Even half?

[Backtobanks]

How much of the Heyward contract will a team be willing to take on?? Even half?

 

Half is about $53,000,000. If they're going to take on that much, we probably won't get too much in return.