The last two offseasons have been slow-moving and dry of significant roster moves for the Cubs. While fans have wanted them to pursue superstar Bryce Harper, fan-favorite Nicholas Catellanos or even a less costly free agent, like D.J. Lemahieu, the Cubs have instead made numerous budget-driven transactions.
Cubs president Theo Epstein admitted at Cubs Convention two weeks ago the luxury tax has been a factor in the club’s offseason. After eclipsing the figure in 2019, they're trying to stay under it in 2020 to avoid repeat offender penalties.
That’s a fine and dandy strategy, though fans have been up in arms over it, blaming ownership for being frugal. In actuality, the Cubs have no mandate from the Ricketts family to stay under the threshold in 2020 — especially if eclipsing it means making the postseason — according to NBC Sports Chicago’s David Kaplan, citing a source.
"Sources confirmed no such mandate from ownership exists," Kaplan said. "While the Cubs would like to reset under the luxury tax threshold for strategic reasons, ownership is well aware of the financial challenges they are currently dealing with in player payroll. Ownership is also prepared to navigate another year in the luxury tax if the club remains in the playoff picture in 2020."
Put down your pitchforks and torches, people.
If no ownership mandate exists, the Cubs baseball operations department is merely choosing to not enter the red this season. The Cubs did so in 2019 and the penalty was only $7.6 million, a small sum for a big market team.
However, those penalties become harsher for repeat offenders: 30 percent on all overages, plus a surtax for those who go over by $20-40 million (the surtax is even steeper if a team goes over by more than $40 million). Teams who go over by $40+ million also see their top draft pick drop 10 slots.
Threepeat offenders are taxed 50 percent on their overages, plus the surtax and the draft penalty. Those penalties are extremely fierce, so if the Cubs' planned to eclipse the tax this season, not going over it in 2021 would bring less pause.
By staying under the threshold this winter, the Cubs are setting themselves up to spend next winter. Draft position is another reason to stay under this season; the club’s farm system has dropped in the rankings the past few years, so it seems they don’t want to shoot themselves in the foot as they build things back up.
Still, not being players in free agency is a tough pill to swallow for fans. The advantage of being a big market team is being able to out-bid those in smaller markets to improve the club. But not using that advantage, even when there's no mandate against it, is a strategic decision.