Cubs Still Have $30 Million or More to Spend This Winter, But Could Be Aiming Lower for a Good Reason

[Matthew Trueblood]

After their latest move to bolster the pitching depth of the big-league team, the Cubs still have a middle-of-the-road projected payroll and a lot of money to spend. But they might not spend every dime in their budget this year, for reasons fans would actually like.

Image courtesy of © David Banks-Imagn Images

Signing Colin Rea to a one-year deal worth $5 million Friday brought the Chicago Cubs' projected 40-man roster payroll for 2025 to roughly $178.3 million, according to Cot's Contracts. That figure bakes in all their agreements with arbitration-eligible players, the small amounts (less than $1 million apiece) they'll pay to pre-arbitration players, and an estimate of Kyle Tucker's salary ($16.25 million, the midpoint between the figures submitted by Tucker and the Cubs on Thursday).

It's a very modest sum, 13th among MLB teams at the moment and lagging the figures for (most notably) NL Wild Card rivals like the Arizona Diamondbacks and San Francisco Giants. Their competitive-balance tax number is nominally higher, at $196.4 million, but that actually comes in lower (14th) in the league rankings, as the Red Sox ($171.4 million in 40-man spending for 2025, $209.2 million by the CBT's reckoning) leapfrog them. That reflects the fact that, while the Cubs have a cluster of veterans under medium-length deals with high annual average values, they have almost no one on the books beyond 2026, and their multiyear deals are (with the exception of Matthew Boyd's) not backloaded. Shota Imanaga's contract contains a three-year club option that will weigh their books down somewhat and raise his annual average value starting in 2026, assuming they exercise it this coming fall, but that won't bear on their 2025 figure.

So, the Cubs have about $36.7 million to spend if they want to settle in around $215 million in actual 40-man roster payroll for 2025. That sounds like a lot, because it is. However, if they spent all of that money over the next month or so, they'd come up to $233.1 million in their CBT figure—and perhaps higher than that, since any multiyear deal might push money off into seasons beyond 2025 without giving them a break from the tax burden. That would be cutting it close, since the team stumbled over the line this past season, didn't meet their ownership-imposed revenue targets, and seem extremely committed to staying below the CBT threshold of $241 million for 2025.

I will give just one paragraph to this disclaimer: Obviously, they should spend way more money than that, and the Ricketts family should be ashamed of itself for its insufficient investment in the team. However, for the purposes of this piece, I want to talk about why they might make certain budgetary choices, and that conversation settles most productively into a valley where we accept the reality of the situation. The Cubs aren't going past $241 million in CBT spending this year, and the very most they would be willing to spend on the payroll (even if it didn't carry them past that line) is $225 million. So we're going to work from that premise.

Jed Hoyer always likes to leave himself in-season wiggle room, and among his various pet policies, that's perhaps the most understandable. The Cubs won't want to come especially close to the line, since various incentives and escalators could then get them into real trouble, and they will want to be able to add $10 million within the season if needed. Therefore, we're safer to say that they can add $30 million to their payroll from here, bringing that raw number up just shy of $210 million and the CBT number to $226 million or so. That's within the realm of possibility, and even within the smaller realm that is their budget.

Now, let's talk about why you're hearing some rumors that they might have even less to spend than that—but why you might be happier with that state of affairs than you think, when you consult your own feelings in six weeks or so. To go back to the Red Sox as a counterexample to the Cubs: Why is the gap between what they'll actually spend in 2025 and their CBT figure close to $40 million, while the Cubs' is just $16 million? It's because of the long-term, team-friendly deals to which they recently signed the likes of Ceddanne Rafaela (eight years, $50 million) and Bryan Bello (six years, $55 million).

As such pre-arbitration deals always are, those contracts are backloaded, so those two will make only about $4 million in 2025—but they go on the books at a combined salary over $15 million, for CBT purposes, because the AAV is all that matters for that calculation. Even Rafael Devers costs more in CBT terms ($29.1 million) than in real money ($27.5 million) in 2025, because later in his 11-year deal, he'll pull in $31 million per season. Long-term deals tend to widen the gap between real payroll and CBT payroll, especially when signed by players who are far from free agency; that's just how such deals are structured.

The Cubs have less leverage over their plausible pre-arbitration and arbitration-eligible extension candidates—Pete Crow-Armstrong, Justin Steele, Miguel Amaya, Michael Busch, Matt Shaw, Kevin Alcántara, even Javier Assad—than the Red Sox had over Rafaela and Bello, and none of those individuals seems overwhelmingly likely to sign a long-term deal this winter. As a group, though, you would probably take the over on 0.5 such deals this spring, and any deal signed would involve raising the CBT salary of the player in question, even though it would probably change the amount they earn in 2025 very little.

Then, of course, there is Tucker. A long-term deal with him (while still a longshot) has to be held open as an option for the Cubs throughout the balance of the offseason, and should one materialize, they need flexibility. When the Red Sox signed Devers to his extension (in January of 2023, but kicking in 2024), they elected not to attach the deal to his final season of arbitration eligibility. That gave them extra CBT wiggle room for 2023; they stayed below the line that year but would have been over it if his AAV were raised by including 2023 in the long-term contract.

Chicago could go the same route if they strike a deal with Tucker, but they might prefer not to. Giving Tucker an extra couple million for 2025 as part of a long-term deal could help get said deal done, and since they have wiggle room in both real and CBT payroll right now, they might also like the long-term CBT benefits of doing things that way. For instance:

• If Tucker and the Cubs agree at $16.2 million for 2025 and sign a separate 12-year, $400-million deal thereafter, he'd count against their CBT payroll for $33.3 million per year starting in 2026.
• If they boost his salary to $18 million for 2025 as part of what becomes a 13-year, $418-million deal, his CBT salary would come down to $32.1 million.

That's a small difference, to be sure, but it exists, and it's just one of what could be several possible structures, some of them more extreme and involving bigger savings in various ways. It's also just one way in which the lurking possibility of a deal with Tucker could make the team a bit less eager to spend to the limits of their budget in the coming weeks.

The other way is this: Even if the two sides strike a deal that doesn't attach itself to the short-term one they arrive at (be it via arbitration hearing or negotiation) for 2025, that deal figures to include a signing bonus. To use the Red Sox as an example one more time, when they signed Devers in 2023, they paid $5 million of his $20-million bonus right away, even though the deal didn't technically begin until 2024. So, while it might not show up either in a tabulation of 40-man spending for 2025 or the CBT number, a long-term Tucker contract would probably include increasing upfront costs by anywhere from $2 million to $10 million.

As is true with Steele, Crow-Armstrong, and the others, the odds of a Tucker extension are relatively long. However, as they try to round out a roster they have already concretely upgraded this winter, the Cubs have to factor in the very real possibility of at least one such deal taking place while they're in Arizona. That is almost certainly why there are rumblings about the team spending less than the amounts we might have expected a few months ago. They've explored a lot of avenues this winter, but the things that have actually panned out so far—adding Boyd and Rea for bullpen depth; dealing for Eli Morgan and signing Caleb Thielbar to deepen the bullpen; and signing Carson Kelly to hedge against Amaya's risk as a primary catcher—have steered them into a particular place where spending the largest amount possible is no longer the goal.

This doesn't mean fans shouldn't expect them to spend significantly more money before Opening Day, or that they shouldn't be angry if that spending doesn't materialize. The spending will happen, though, and when it does, we should keep in mind that their reasons for being cautious or not breaking the bank might be better than we're immediately inclined to believe.

There's also a sense of unresolved trade potential here, which further colors whatever choices the team might make about spending. Even after the Tucker trade, the Cubs were involved in several rumors about key additions that would have come via trade, and with moderate financial investments. They still seem to have a roster crying out for a trade that realigns their talent, and that, too, could give them the roster they should be trying to build without (in all likelihood) pushing their budget to its very limit. We won't be able to fully evaluate this offseason until it's over. The Rea deal did seem a strange step, but there's another important move or two left for them, and even if their total spending from here does turn out to be less than we'd have preferred or imagined, it's important to understand the perfectly acceptable reasons why that might be so—in addition to the frustrating ones.

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[Jolee Bindo]

I'm sorry, but weren't you the same guy saying you were 100% sure they would spend all the money just a few weeks ago?

You were insulting the fans who were predicting that the Cubs would continue to be the Cubs and underspend, yet that seems to be exactly what is happening.

[Development DL]

I had not thought of that possibility.  In addition to that hopeful thought .
 

It seems as if adding Rea., opens the possibility of Assad /Wicks , plus position prospect and …, for a consolidation of WAR pitcher . 

Do you believe that type of move ,  plus a leverage reliever signing could fit in said budget .  Thanks for opening the doors . 

 

 

[Development DL]

Do you believe all the analytics / development oriented coaching hires . Have led to leaning into even a greater desire , to lean into “ value acquisitions” . 
 

 

[Statyllus]

Cubs’ self imposed budget restraint discussions are getting tiresome. To summarize, the Cubs have plenty of money to spend on improving the team-they just have good reasons not to. Of course, money is NOT the Cubs problem but rather ineffective decisions. Padres and Red Rox have the challenges of financial resources to compete with the Dodgers and Yankees respectively.  The Cubs have to compete with that financial juggernaut- the Milwaukee Brewers! Brewers don’t spend more money than the Cubs-they simply make better baseball decisions.