The Cubs missed the postseason for the fourth consecutive season. Chicago completed 83-79 for a second straight yr. That’s a irritating consequence in a down NL Central — particularly since Chicago added round $30MM to its Opening Day payroll relative to 2023, per Cot’s Baseball Contracts.
Proprietor Tom Ricketts spoke with Meghan Montemurro of the Chicago Tribune in regards to the workforce’s payroll outlook. Ricketts confirmed that the Cubs narrowly exceeded the $237MM base aggressive steadiness tax threshold — as president of baseball operations Jed Hoyer steered they’d in August. Like most house owners, Ricketts didn’t present a transparent reply as as to whether he’d be prepared to pay the tax for a second straight yr.
“The penalties on CBT, they develop over time and so that you need to watch out if you do it,” Ricketts stated. “And so if there’s ever some level sooner or later the place there’s a big monetary dedication you need to make midseason, you must be considerate about it.” Ricketts is referencing the escalating penalties for groups that pay the tax in consecutive seasons. The Cubs stayed beneath the CBT threshold in 2023, in order that they’re first-time payors this yr. That’ll topic them to a 20% tax on their first $20MM in overages. Cot’s estimates that they have been solely about $300K over the road, so the precise tax fee (roughly $55K) is kind of a rounding error for an MLB workforce.
Paying in any respect means the Cubs could be taxed at a 30% fee for his or her first $20MM in overages in the event that they surpass the brink subsequent season. That jumps to 42% for the following $20MM and comes with greater penalties (75% and 90%) for the respective $20MM after that. The penalties would improve if the Cubs paid the tax for a 3rd straight yr.
The CBT additionally contains greater penalties for groups that lose or add a free agent who declined a qualifying supply. The Cubs don’t have any impending free brokers who’ll get a QO. In the event that they signed a professional free agent, they’d forfeit their second- and fifth-highest alternatives within the 2025 draft and $1MM in worldwide bonus pool area.
Subsequent yr’s base threshold climbs to $241MM. Cot’s initiatives the Cubs round $150MM in CBT obligations. That assumes Cody Bellinger is not going to decide out of the ultimate two seasons on his contract however doesn’t embody arbitration projections. MLBTR contributor Matt Swartz initiatives your complete arbitration class to price round $33MM in the event that they have been all tendered contracts. Shifting on from some or all of Patrick Knowledge, Yency Almonte, Christian Bethancourt, Julian Merryweather, Nick Madrigal, Trey Wingenter, Jimmy Herget and Colten Brewer might knock that right down to the $20MM vary.
That’d go away roughly $70MM earlier than the bottom threshold, so there’s plenty of payroll room earlier than the tax turns into a priority. Ricketts’ observe in regards to the potential for midseason acquisitions might level to a desire to remain beneath the tax line through the offseason. A workforce’s CBT quantity isn’t calculated till the tip of the season. Wage acquired in midseason pickups counts on a prorated foundation within the calculation.
Allocating these assets will likely be at Hoyer’s discretion. The entrance workplace chief is coming into the ultimate season of the five-year extension that he signed in 2020. Chicago continues to be in search of its first playoff look since Theo Epstein turned the reins to Hoyer after the ’20 season.
It’s comparatively widespread for groups to signal executives and coaches to extensions earlier than the ultimate yr of their deal, thereby stopping from working in a lame duck state of affairs. Ricketts sidestepped a query concerning a possible Hoyer extension. “He’s beneath contract, that’s the way in which I see it,” the proprietor informed Montemurro. “I believe he’s motivated. … I believe Jed’s going to have a fantastic offseason and put us again within the playoffs subsequent yr.”