$280,000

[Irrelevant Dude]

That is apparently the amount the Cubs were over the CBT by this year.  Honestly, that should be a fireable offense.  That is just extremely dumb.

[squally1313]

[Bertz]

For anyone so up in arms about this, what do you think being slightly over the tax does?  What bad thing happens now that would not have happened if they were 280k under?

[Brock Beauchamp]

12 minutes ago, Bertz said:

For anyone so up in arms about this, what do you think being slightly over the tax does?  What bad thing happens now that would not have happened if they were 280k under?

I think the most damning aspect of it is that it means they don't care if they're a few bucks over the CBT.

Which means they won't be going way over the limit in future years because otherwise they'd care about the multi-year penalties and wouldn't have gone over in 2024.

[Bertz]

4 minutes ago, Brock Beauchamp said:

I think the most damning aspect of it is that it means they don't care if they're a few bucks over the CBT.

Which means they won't be going way over the limit in future years because otherwise they'd care about the multi-year penalties and wouldn't have gone over in 2024.

Occams Razor is that there was never any intention from ownership to run a  payroll high enough for the tax to matter.

[Stratos]

1 hour ago, Irrelevant Dude said:

That is apparently the amount the Cubs were over the CBT by this year.  Honestly, that should be a fireable offense.  That is just extremely dumb.

Don't worry they'll be back under this year.

[Stratos]

So far during his reign Ricketts has supported going over the tax line to try a push a winning group of players over the top, not to try to patch holes in a loser.  Would be nice if it were different but can't say I blame him.  Jed has more than enough resources to get into the playoffs.  The Brewers have the smallest market in the NL if i'm not mistaken and a crummy payroll.

[Cuzi]

The most damning thing to me is that Jed Hoyer has been reluctant to sign players attached to the QO because of losing the draft pick. Now he stands to lose 2 draft picks and IFA money... Because he went over by 280k. That is just extra fuel to add to the fire as reason to not sign the best players available.

[Irrelevant Dude]

4 hours ago, Bertz said:

For anyone so up in arms about this, what do you think being slightly over the tax does?  What bad thing happens now that would not have happened if they were 280k under?

At a minimum, it limits the team's flexibility next season.  Yes, I understand that those limits are mostly self-imposed, but going over the CBT by 280k has implications to which options are available to the team this year.  In reality, the Cubs probably never planned to be over the CBT next year (Bruce Levine also says he fully expects them to be under), and they probably won't sign anyone who received a Qualifying Offer.  If both of those things end up being true, then ultimately them being over the CBT won't really matter.  But if they DO end up signing a Qualifying Offer player, now they lose their 5th round pick (in addition to the 2nd) and $1 Million from their international bonus pool.  For what?  That is why you don't purposefully go over the tax by a few dollars.  I'm not sure exactly how it happened, but I think Jed made a mistake somewhere, and when you are Mr. Play-it-Safe maximizing value analytics guy, those types of mistakes shouldn't happen.  I'm not saying the Cubs shouldn't go over the luxury tax.  They should be able to do it with regularity.  But even if they were willing to do that, they should never go over in the manner they did.

[thawv]

On 10/11/2024 at 5:30 PM, Bertz said:

For anyone so up in arms about this, what do you think being slightly over the tax does?  What bad thing happens now that would not have happened if they were 280k under?

Because they went over, they won't be going over in 2025.  Because they went over, if they sign a FA with a QO, they lose their 2nd pick, their 5 pick, and 1 million in IFA money.  

[Transmogrified Tiger]

11 minutes ago, thawv said:

Because they went over, they won't be going over in 2025.  Because they went over, if they sign a FA with a QO, they lose their 2nd pick, their 5 pick, and 1 million in IFA money.  

Going over in 2024 meaning they won't go over in 2025 is closer to being nonsensical than it is a presumed fact.  And the difference in going over as it relates to QO is the 5th rounder and 500k in IFA money, as a revenue sharing payor they'd lose their 2nd pick and 500k in IFA regardless of their CBT status.

[thawv]

49 minutes ago, Transmogrified Tiger said:

Going over in 2024 meaning they won't go over in 2025 is closer to being nonsensical than it is a presumed fact.  And the difference in going over as it relates to QO is the 5th rounder and 500k in IFA money, as a revenue sharing payor they'd lose their 2nd pick and 500k in IFA regardless of their CBT status.

I feel very confident that they won't go over next year because they don't want to go over in consecutive seasons.   But now they will lose their 5 pick and an additional 500 k because they went over. 

 

[Bertz]

1 minute ago, thawv said:

I feel very confident that they won't go over next year because they don't want to go over in consecutive seasons.   But now they will lose their 5 pick and an additional 500 k because they went over. 

 

Why are you so confident about this?  Why do you think $56K in taxes on $280K in payroll is going to have major impacts on this year's planning?  Do you really think that if they had snuck in at $280K under, they would have suddenly spent $10M more this coming year?  What are you basing this on?  

[jersey cubs fan]

Isn’t it the three year thing that hits them? I assume going over a little is just a built in excuse to not go over in one of next two years, with minimal cost in doing so 

[Transmogrified Tiger]

17 minutes ago, jersey cubs fan said:

Isn’t it the three year thing that hits them? I assume going over a little is just a built in excuse to not go over in one of next two years, with minimal cost in doing so 

I believe that used to be a bigger deal, but the compounding penalties only really hurt on the overages, so if you're only Phillies/Astros level over instead of Yankees/Dodgers level over, the only difference is the total expenditure rises like 1-2%.  Copy/pasting myself from an earlier example, take two hypotheticals of 3 year spending:

A: under LT, 10 million over, 18 million over; 7.4 million in total penalties

B: 5 million over, 10 million over, 15 million over; 13 million in total penalties

[Transmogrified Tiger]

Having said that, I would not bet the farm on them being over the CBT line next year, but that's not at all because they're over this year.  It's because they clearly aren't going to go 40+ million over in any season in the current environment, and unlike each of the past several seasons there isn't a bunch of bad contracts(Heyward, Hendricks) or dead money(Hosmer, Bote, Mancini, Barnhart)  being freed up after 2025.  Add in that several important players will have material raises(Steele/Paredes in arb, preventing Shota's opt out), I think there's a chance they don't want to eliminate all of their 2025-2026 flexibility before that offseason arrives.  You can hedge that by simply ensuring some of your additions are only guaranteed 1 year though(relievers and bats in particular), and I've seen stray mentions the purse strings may be marginally loosened with improvements in the debt service situation.

[Bertz]

TT has posted some variation of this before, but I can't find it so I'll paraphrase, probably poorly:

Which of these scenarios is more likely?

A) Last spring, famously conservative Jed Hoyer signed Cody Bellinger to a deal that put the team right on the razors edge of the luxury tax.  He chose not to do a longer/lower AAV deal to ensure they stayed under for...reasons.  At the trade deadline Jed added salary, all but ensuring that the team would be over the tax.  He didn't trade away any additional salary (Smyly, Tauchman, etc.) because...hubris?  Now the team is going to have a materially lower payroll in 2025 than they would have if the team had been able to sneak under the line

B) Tom Ricketts is intent on keeping payroll within a stone's throw of the luxury tax (let's say within $10M?) in all but the most special of circumstances.  As such even with repeater penalties, the tax bill is going to top out at ~$5M per year.  Jed has already shown he will only sign QO free agents when they're impact players, so the extra draft penalties will either not come up at all, or be such a non factor if he does pony up for e.g. Max Fried.

[squally1313]

Everyone in this thread back on August 1 in an alternate world: "the Cubs are 5 games back of a wild card spot and we essentially just signaled to the team that we are punting on this year to save Rickett's $100k????"

[Irrelevant Dude]

5 minutes ago, squally1313 said:

Everyone in this thread back on August 1 in an alternate world: "the Cubs are 5 games back of a wild card spot and we essentially just signaled to the team that we are punting on this year to save Rickett's $100k????"

I think it was pretty clear on August 1 that the playoffs were extremely unlikely.

[Rcal10]

1 hour ago, squally1313 said:

Everyone in this thread back on August 1 in an alternate world: "the Cubs are 5 games back of a wild card spot and we essentially just signaled to the team that we are punting on this year to save Rickett's $100k????"

I don’t have a real issue with them not dumping at the deadline. And I am not sure if this small amount of money they went over the LT will affect this year and the next, but I do think he should have been under. Whether it cost them a few million more over the next few years if they are over those years, or it cost them draft picks or IFA money, or whatever else it may cost, I would think if they were this close they should have been able to go under. Trade Smyle and pick up all but $300,000 of his contract. Someone would have taken him for basically nothing. Trade Tauchman, same think. Pick up whatever was needed to make a deal and get under the LT. Neither would have dented their playoff chances. IMO it was a mistake made by the FO. Is it egregious? No. But it was a mistake. 

[s2obed]

8 hours ago, thawv said:

Because they went over, they won't be going over in 2025.  Because they went over, if they sign a FA with a QO, they lose their 2nd pick, their 5 pick, and 1 million in IFA money.  

They’re not signing anyone with a QO, get real lol. 

[thawv]

14 hours ago, Bertz said:

Why are you so confident about this?  Why do you think $56K in taxes on $280K in payroll is going to have major impacts on this year's planning?  Do you really think that if they had snuck in at $280K under, they would have suddenly spent $10M more this coming year?  What are you basing this on?  

It has nothing to do with the 56 k in penalties.  They can carry a 300 million dollar payroll and it won't matter.  They have their self imposed budget at the CBT.  They don't like to go over that amount.  This was a big blunder on Jeds part to go over.   They have never gone over in consecutive if we don't count 2020 as the league suspended the tax penalties that season.  As far as the Jed is concerned, losing draft picks and IFA money is a big deal if they sign a guy with a QO.  Because he went over, the penalty is even steeper this season.  In the end, they don't have a history of paying in consecutive seasons.  

[Bertz]

3 hours ago, thawv said:

It has nothing to do with the 56 k in penalties.  They can carry a 300 million dollar payroll and it won't matter.  They have their self imposed budget at the CBT.  They don't like to go over that amount.  This was a big blunder on Jeds part to go over.   They have never gone over in consecutive if we don't count 2020 as the league suspended the tax penalties that season.  As far as the Jed is concerned, losing draft picks and IFA money is a big deal if they sign a guy with a QO.  Because he went over, the penalty is even steeper this season.  In the end, they don't have a history of paying in consecutive seasons.  

Do you not see how circular your reasoning is?  You start from this place of the CBT being a hard line, and spiral out from there.  "Well he can't cross the line because it's the line!"

But what if it's not the line?  Doesn't all the behavior from the last 8 months start to make a lot more sense?  You still haven't even attempted to answer why if this is *such* a big deal they didn't make an attempt to avoid it at the trade deadline.  Do you not take that as evidence you should reconsider your priors?

[thawv]

20 hours ago, Bertz said:

Do you not see how circular your reasoning is?  You start from this place of the CBT being a hard line, and spiral out from there.  "Well he can't cross the line because it's the line!"

But what if it's not the line?  Doesn't all the behavior from the last 8 months start to make a lot more sense?  You still haven't even attempted to answer why if this is *such* a big deal they didn't make an attempt to avoid it at the trade deadline.  Do you not take that as evidence you should reconsider your priors?

I'm taking Tom at his word with this one.  He said,  "We like to operate under the CBT threshold."  

"The penalties on CBT grow over time, so you want to be careful when you do it."

 

"You don't want to have too many long-term contracts when you have a lot of young guys that are coming up through the minors."

Until I see them pay in consecutive seasons, I'm going to assume the status quo.  Believe me, I hope I'm very wrong. 

[squally1313]

Why would you take Tom Ricketts at his word on anything