2019-20 Offseason Rumors/General Chit-Chat

[Thed Hoyerstein]

This is a difficult question because nobody really knows what the exact profit is that a team like the Cubs make after all the expenses, but what is a good guess as to what the payroll should be and one that would get people to go, 'OK, they spend enough.'

 

$300 million? $400 million?

 

I would guess when this number is closer to zero than 9 digits.

 

[tweet]

[/tweet]

 

Have there been any recent reports as to the go-forward interest expense used to finance the team? Though that should be outside of baseball ops but I'm sure that the Ricketts would use that excuse.

[Bertz]

This is a difficult question because nobody really knows what the exact profit is that a team like the Cubs make after all the expenses, but what is a good guess as to what the payroll should be and one that would get people to go, 'OK, they spend enough.'

 

$300 million? $400 million?

 

My assumption is that there are more costs than we give credit for in running the team, so their break even point is probably well south of $300M.

 

That being said there are two big caveats there:

 

1. They definitely pocketed a ton of money from 2012-2015, and haven't turned around and dipped back into that money. They'll point to the renovations but that leads to...

2. A lot of their costs are building up equity. So it's not *really* a loss even of it's not straight up liquid profit

 

So ultimately. I don't *really* care about where that break even point is.

[Regular Show]

This is a difficult question because nobody really knows what the exact profit is that a team like the Cubs make after all the expenses, but what is a good guess as to what the payroll should be and one that would get people to go, 'OK, they spend enough.'

 

$300 million? $400 million?

 

This is going to be a bad take and not popular, but I don't want the Cubs to morph into the old Steinbrenner's Yankees where we buy FAs every offseason and outspend every team. Like if Mark Cuban bought the team and allowed the Cubs to spend as much as they see fit and didn't care about making a profit...

 

On the one hand I'm happy the players are getting more money and all the revenue is being put back into the team, but I would hate winning that way. Like it's awesome if we outbid the Yankees for Cole, but I personally would kinda hate this team if we kept doing that and had a payroll over $300 million.

 

I'm fine with a team near the luxury tax with times going strategically over. I want the luxury tax line bumped WAY up in the next CBA discussion. Next year it will start at $208M and then goes up to $210M. I'm hoping it gets bumped up to $240M in the next CBA since teams treat it as almost a hard cap.

 

I hate the Yankees and I hate teams that buy their way to a championship (which I know the Cubs didn't do). They should always be in the top 3-4 in spending, but I don't want them to be #1 in spending except in strategic, special offseasons.

[Cubswin11]

This is a difficult question because nobody really knows what the exact profit is that a team like the Cubs make after all the expenses, but what is a good guess as to what the payroll should be and one that would get people to go, 'OK, they spend enough.'

 

$300 million? $400 million?

 

My assumption is that there are more costs than we give credit for in running the team, so their break even point is probably well south of $300M.

 

That being said there are two big caveats there:

 

1. They definitely pocketed a ton of money from 2012-2015, and haven't turned around and dipped back into that money. They'll point to the renovations but that leads to...

2. A lot of their costs are building up equity. So it's not *really* a loss even of it's not straight up liquid profit

 

So ultimately. I don't *really* care about where that break even point is.

Yeah there probably are more expenses than we know/give credit and the Cubs probably also have some of the higher expenses in MLB currently with the renovations, recentish purchase of the team, all the building/property acquisitions around the park and network. But like you said most of those costs are going towards assets gaining value/building equity. They get the interest, expense and depreciation write downs with doing all that too. They also got the BAMTECH money last year or the year before, did that minority share sell off a few years ago (forget what that money was used for) etc.

[Sammy Sofa]

I hate the Yankees and I hate teams that buy their way to a championship (which I know the Cubs didn't do).

 

No, that definitely was a huge part of what they did.

[Regular Show]

I hate the Yankees and I hate teams that buy their way to a championship (which I know the Cubs didn't do).

 

No, that definitely was a huge part of what they did.

 

I disagree.

 

Yeah, we got Lester and we then got Heyward. Lol, Heyward didn't really contribute to the 2016 team so he doesn't count (in my mind).

 

Take his salary away and that Cubs team isn't that high in payroll in 2016. Like if Heyward suffered an injury at the beginning of the 2016 season and was done for the rest of year. You could say the Cubs spent a decent amount of money, but the players that actually contributed to winning a championship wasn't that high in total payroll amount. We traded Castro to sign Zobrist...

 

Like no one says the Cubs bought a championship in 2016 in the media or blogosphere except on White Sox' and Cardinals' message boards.

 

----

 

You don't "buy your way to a championship" if the players you spent money on create effectively replacement level value (0-1 WAR) in my mind. The other players on the team is what allowed you to win a championship and you spent poorly in FA.

[Sammy Sofa]

But it doesn't work that way; they still spent the money. One couldn't, IMO, in good conscience declare that a team that spent $150 million dollars didn't in part buy their way to victory. They went out and got Heyward, Lester, Lackey, Montero, Zobrist and Arrietta, whether by trade or signing, because they knew that had horsefeathers You Money.

[Regular Show]

But it doesn't work that way; they still spent the money. One couldn't, IMO, in good conscience declare that a team that spent $150 million dollars didn't in part buy their way to victory. They went out and got Heyward, Lester, Lackey, Montero, Zobrist and Arrietta, whether by trade or signing, because they knew that had horsefeathers You Money.

 

Okay, being able to spend money and add additions helped in part in winning a championship in 2016.

 

But they certainly didn't buy a championship in 2016 through FA. I almost wished they didn't sign Heyward or I should drop the almost part now. I wasn't here when that signing happened, but I wanted the Cubs to have an opt-out after the 3rd year (to go after Harper and/or in the event of a colossal collapse from Heyward). More teams need to do this, but that also probably means you don't get the FA...

 

For those megadeals that go 7-8 years it's just so dumb to not include a mutual opt-out clause IMO. Front load the deals or make the buyout really painful for opting-out (for the team), but MLB teams need to wise up on these mega contracts. Stanton is going to age poorly and that contract will get ugly very soon.

Edited December 19, 2019 by Regular Show

[Sammy Sofa]

I mean, it just feels like it shifts the narrative to the idea that the Cubs did 2016 with nothing but a ragtag band of young go-getters who cost nothing but a song, but they were straight up playing a team in the WS who (relatively) ACTUALLY DID THAT by spending close to $90 million less than the Cubs did.

[ConstableRabbit]

This is a difficult question because nobody really knows what the exact profit is that a team like the Cubs make after all the expenses, but what is a good guess as to what the payroll should be and one that would get people to go, 'OK, they spend enough.'

 

$300 million? $400 million?

 

I would guess when this number is closer to zero than 9 digits.

 

[tweet]

[/tweet]

These are EBITDA numbers, though.

I: Do we know how much the debt servicing costs the Cubs every year? I thought I remembered it being ~$35m annually.

T: The Cubs likely pay taxes

D: They have depreciating assets but too difficult for me to mentally calc

A: Same

 

If you add the above to the total $20-25m Luxury Tax penalties Brett referenced you get closer to breakeven.

 

The Cubs EBITDA was $87m and the White Sox was $76m? That is insane. To me, this implies that either the interest payments on the team's debt is higher than we thought or the non-payroll investments the Cubs put into the team are higher than we thought.

[Cubswin11]

[Gilby]

A little more foresight by ownership/Theo would've been nice, specifically before inking those Chatwood and Kimbrel deals. Like if this isn't just about Marquee being a flop, how was this not handled better before ending up with the plan of trading Bryant.

[Backtobanks]

I hate the Yankees and I hate teams that buy their way to a championship (which I know the Cubs didn't do).

 

No, that definitely was a huge part of what they did.

 

In the last 4 years the Cubs payroll was 12% over the Cards, 88% over the Brewers, 74% over the Reds, and 102% over the Pirates. We were the Yankees of the NL Central.

[Transmogrified Tiger]

A little more foresight by ownership/Theo would've been nice, specifically before inking those Chatwood and Kimbrel deals. Like if this isn't just about Marquee being a flop, how was this not handled better before ending up with the plan of trading Bryant.

 

Exactly, the CBA has been in place for 3 years, the consequences of spending from that perspective are not a surprise. So either we have to believe that Theo was confident that the team would be so good that they'd be fine just taking an offseason to trim payroll(even as late as *this June* when he committed 37 million to Kimbrel), or ownership pulled the rug out from under them.

[Cubswin11]

A little more foresight by ownership/Theo would've been nice, specifically before inking those Chatwood and Kimbrel deals. Like if this isn't just about Marquee being a flop, how was this not handled better before ending up with the plan of trading Bryant.

 

Exactly, the CBA has been in place for 3 years, the consequences of spending from that perspective are not a surprise. So either we have to believe that Theo was confident that the team would be so good that they'd be fine just taking an offseason to trim payroll(even as late as *this June* when he committed 37 million to Kimbrel), or ownership pulled the rug out from under them.

I strongly lean it was a kept in the dark/rug pulled out situation and/or business side horsefeathering up so bad with renovations and TV deal they didn’t or couldn’t keep money promises on future payrolls. I don’t believe he would’ve put himself in a spot to entirely sit out offseasons that included Manny, Bryce, Kershaw, Cole, Strasburg, Rendon, Arenado and some of these other clearly elite players.

[Regular Show]

I hate the Yankees and I hate teams that buy their way to a championship (which I know the Cubs didn't do).

 

No, that definitely was a huge part of what they did.

 

In the last 4 years the Cubs payroll was 12% over the Cards, 88% over the Brewers, 74% over the Reds, and 102% over the Pirates. We were the Yankees of the NL Central.

 

I'm okay with being the Yankees of the NL Central (we should be the Yankees of the NL Central).

 

I'm not okay with being the older version, high-spending Yankees of MLB.

[Deeg]

I hate the Yankees and I hate teams that buy their way to a championship (which I know the Cubs didn't do).

 

No, that definitely was a huge part of what they did.

 

In the last 4 years the Cubs payroll was 12% over the Cards, 88% over the Brewers, 74% over the Reds, and 102% over the Pirates. We were the Yankees of the NL Central.

 

Why is that the measuring bar?

[champaignchris]

A little more foresight by ownership/Theo would've been nice, specifically before inking those Chatwood and Kimbrel deals. Like if this isn't just about Marquee being a flop, how was this not handled better before ending up with the plan of trading Bryant.

 

Exactly, the CBA has been in place for 3 years, the consequences of spending from that perspective are not a surprise. So either we have to believe that Theo was confident that the team would be so good that they'd be fine just taking an offseason to trim payroll(even as late as *this June* when he committed 37 million to Kimbrel), or ownership pulled the rug out from under them.

I strongly lean it was a kept in the dark/rug pulled out situation and/or business side horsefeathering up so bad with renovations and TV deal they didn’t or couldn’t keep money promises on future payrolls. I don’t believe he would’ve put himself in a spot to entirely sit out offseasons that included Manny, Bryce, Kershaw, Cole, Strasburg, Rendon, Arenado and some of these other clearly elite players.

 

This seems like the most likely course of events. The only thing that makes me wonder about this possibility is that if ownership wasn’t being straight with Theo, there really wasn’t much reason for Theo to stick around after the 2018 season, when we presume the news came down that the purse strings were tightening.

 

He could have said, “I did what I came here to do,” had a great retirement ceremony, gotten a laurel and hearty handshake from the owner, and then within a year walked into pretty much any new project he could conceive of taking on. No one would have blinked at that.

[Backtobanks]

 

No, that definitely was a huge part of what they did.

 

In the last 4 years the Cubs payroll was 12% over the Cards, 88% over the Brewers, 74% over the Reds, and 102% over the Pirates. We were the Yankees of the NL Central.

 

Why is that the measuring bar?

 

We are a big market team in a division of mid-size market teams and outspend all of them by quite a bit every year. Fans complain when the Yankees or the Dodgers outspend their competition, but we've been doing it for quite awhile. Guys like Steinbrenner took his profits and put it into the team on the field while Wrigley used the Cubs as a tax write off.

[CubinNY]

 

In the last 4 years the Cubs payroll was 12% over the Cards, 88% over the Brewers, 74% over the Reds, and 102% over the Pirates. We were the Yankees of the NL Central.

 

Why is that the measuring bar?

 

We are a big market team in a division of mid-size market teams and outspend all of them by quite a bit every year. Fans complain when the Yankees or the Dodgers outspend their competition, but we've been doing it for quite awhile. Guys like Steinbrenner took his profits and put it into the team on the field while Wrigley used the Cubs as a tax write off.

In the last 4 years... What about the five years before that when they were intentionally sucking and filling Wrigley? They can go horsefeathers themselves. And also they should use their financial advantage like a cudgel, destroying the competition in their division because the competition gets extra picks and charity from the rest of the league that the Cubs don't get.

[Andy]

 

No, that definitely was a huge part of what they did.

 

In the last 4 years the Cubs payroll was 12% over the Cards, 88% over the Brewers, 74% over the Reds, and 102% over the Pirates. We were the Yankees of the NL Central.

 

I'm okay with being the Yankees of the NL Central (we should be the Yankees of the NL Central).

 

I'm not okay with being the older version, high-spending Yankees of MLB.

I am. Everyone in MLB is swimming in money, if the Cubs decided to swim in slightly less money and the rest of them didn't, that's their damn problem.

[jersey cubs fan]

Try telling a Pirates fan the Cubs didn't buy their way past them into the top of the NL Central and eventual World Series.

 

The Cubs huge payroll advantage provides tremendous leeway, not the least of which is the ability to brush off a bad contract that would absolutely sink a garbage team all by itself. The Cubs bought their WS title and they will have to buy their next one too. And they better get cracking or it's going to take several decades to get it done again.

[Hairyducked Idiot]

A little more foresight by ownership/Theo would've been nice, specifically before inking those Chatwood and Kimbrel deals. Like if this isn't just about Marquee being a flop, how was this not handled better before ending up with the plan of trading Bryant.

 

Exactly, the CBA has been in place for 3 years, the consequences of spending from that perspective are not a surprise. So either we have to believe that Theo was confident that the team would be so good that they'd be fine just taking an offseason to trim payroll(even as late as *this June* when he committed 37 million to Kimbrel), or ownership pulled the rug out from under them.

 

I think he significantly overestimated the market for some of his assets. He assumed teams would be showering him with high-profile prospects in offers for Bryant and has been resoundingly met with "meh."

[Transmogrified Tiger]

A little more foresight by ownership/Theo would've been nice, specifically before inking those Chatwood and Kimbrel deals. Like if this isn't just about Marquee being a flop, how was this not handled better before ending up with the plan of trading Bryant.

 

Exactly, the CBA has been in place for 3 years, the consequences of spending from that perspective are not a surprise. So either we have to believe that Theo was confident that the team would be so good that they'd be fine just taking an offseason to trim payroll(even as late as *this June* when he committed 37 million to Kimbrel), or ownership pulled the rug out from under them.

 

I think he significantly overestimated the market for some of his assets. He assumed teams would be showering him with high-profile prospects in offers for Bryant and has been resoundingly met with "meh."

 

There's just no way that he built the team with Plan A being trade Bryant for prospects(and Bryant is the only salary big enough to fix payroll ills). He committed 8 figures in 2020-21 to a reliever in June, combined with the rapidly approaching FA of the positional player core there's no way trading your best player to get under the tax was his first choice, because you know you're taking a step back when you do it even if they're showering him with prospect riches.

[SouthSideRyan]

I have no idea if any of this is accurate, but assuming it is, I found it pretty informative and pretty depressing on the motivations for the Cubs dropping payroll in 2020...though I guess the silver lining is that this article makes it seem like it would just be a one year dip.

 

https://www.bleachernation.com/cubs/2019/12/19/why-the-chicago-cubs-are-likely-working-to-get-back-under-the-luxury-tax-in-2020/

 

No, this still does not mean we should trade Kris Bryant.

 

The tl;dr is that going over the tax for the 2nd straight year is more like a ~25 million cost than a ~5 million cost, and doing so for a 3rd straight year is upwards of 50 million.

 

"Putting it another way: The system in place makes it much cheaper for the Cubs to have a $207 million payroll in 2020 and then a $250 million payroll in 2021 than to have a $209 million payroll in 2020 and then a $211 million payroll in 2021. It’s an absurd extension of the way these penalties are structured, but it’s true."

 

And then cut 35M from the 2022 payroll to get back under!!