Cole Hamels

Yu Darvish is ready for takeoff

Yu Darvish is ready for takeoff

Yu know the Cubs season is right around the corner when we catch word of a Darvish bullpen.

Darvish still hasn't even been a member of the Cubs organization for a full calendar year, but almost that entire time has been spent with the focus firmly on his health.

That hasn't changed for the 32-year-old pitcher enjoying his first Cubs Convention amid Winter Storm Harper at the Sheraton Grand Chicago this weekend.

Darvish said he is fully healthy now and his offseason program is progressing along slowly after he underwent a debridement procedure on his right elbow in September.

Darvish was slated to throw from 120 feet for the first time Saturday, planning 20 pitches from that distance. From there, he will have a bullpen on Friday.

"His health is everything, clearly," Theo Epstein said. "I know it's not worth anything at this point of the calendar, but the reports are terrific. He's added a lot of good muscle, he's added a lot of flexibility.

"Most importantly, his arm feels terrific. He's experiencing no discomfort whatsoever when throwing and when testing his arm. He's walking around with a little bit of confidence. I think that reflects how he's feeling about himself physically."

Cubs fans might be sick of hearing this narrative, but a healthy Darvish really can do a quite a bit in changing the team's overall fortunes for 2019. This is a guy who strikes out batters at a higher rate than any other starting pitcher in baseball history and even when he was able to pitch in 2018, he sported an ERA more than a run-and-a-half higher than his previous career mark.

The Cubs know their road to success goes through the starting rotation (even nowadays in the world of extreme bullpenning) and Darvish has emerged as the ultimate X-factor.

An offseason of rest and rehab has Darvish and the Cubs feeling confident with less than a month until pitchers and catchers report to spring training.

"Now, the important part starts," Epstein said. "Just taking that into spring training and into the season and being ready for the battle and getting some really good hitters out and being someone we can lean on in that rotation."

The Cubs had enough concerns about their overall state of the rotation (including Darvish) that they picked up Cole Hamels' $20 million option despite a serious budget crunch this winter.

But Hamels — Darvish's former teammate with the Rangers — has something most Cubs fans don't: A firsthand look at how dominating Darvish can be when he's healthy.

"I know he wants to do really well," Hamels said. "And he's capable of so much. You've seen bits and pieces when he was with Texas and the Dodgers for a few games — he's really good. He can carry a game; he can carry a month of starts for a team.

"So to be able to put him in between all of us and all of us working together, it's going to be a lights-out rotation. That's what it takes. I know he's ready to do it. When he's healthy, he's one of the best in the game."

Considering Cubs' budget crunch, was picking up Cole Hamels' option the right move?

Considering Cubs' budget crunch, was picking up Cole Hamels' option the right move?

Did the Cubs make the right call in picking up Cole Hamels' $20 million option?

That question was a no-brainer in the first few days of November — an easy call to pencil Hamels into the Cubs rotation for 2019 even if it meant trading away Drew Smyly and his $7 million contract to the Texas Rangers.

But here on Jan. 8, it's at least a fair question and the answer isn't so automatic, as we discussed on Hot Stove Tuesday.

Mind you, the result is still the same. The Cubs have Hamels under contract for 2019 and his $20 million salary is part of why Theo Epstein's front office doesn't have much wiggle room to add to the roster.

Epstein and Co. have pointed to payroll issues all winter (the Smyly move to clear some salary for Hamels was a clear indicator), but those woes seem to have hit a crescendo this week as The Athletic's Ken Rosenthal reported the Cubs couldn't even sign a second-market relief pitcher like Adam Warren without first clearing salary.

[Explaining Cubs budget woes: Why Theo Epstein's front office is limited this winter

Those are some serious financial restraints, though it's understandable. With a payroll projected to surpass $228 million, the Cubs will pay far more to their roster in 2019 than they have at any other point in franchise history.

But that is not a lot of financial flexibility for Epstein to add necessary pieces. Warren made just $3.3 million in his final year of arbitration in 2018 and would probably fetch a bit more than that on the open market.

If that's true and Epstein's front office is restricted that much, there's one definite conclusion to be drawn from the Hamels decision: The Cubs clearly felt they absolutely needed the veteran starting pitcher. 

Either the budgetary restraints have changed since the Cubs picked up Hamels' option on Nov. 2 (Epstein and Jed Hoyer maintained throughout the MLB Winter Meetings the budget has not changed) or the Cubs felt Hamels was more valuable to the 2019 team than using that money elsewhere to address the other holes on the roster (bullpen, veteran backup catcher, another bat, etc.).

It's tough to argue that point. Bringing Hamels back really was a no-brainer at the time, especially given how he performed in 12 starts down the stretch (2.36 ERA, 1.10 WHIP, 8.7 K/9). Sure, he's 35 and has shown signs of decline in the past, but he was obviously rejuvenated in a Cubs uniform and increased health/mechanics support the boost in numbers over the last two months of 2018.

The Cubs also have serious question marks in their starting rotation beyond maybe only Kyle Hendricks. Jon Lester is 35 and showing some minor signs of decline, Jose Quintana had a bit of a disappointing 2018 despite a strong finish and of course Yu Darvish and Tyler Chatwood are far from reliable options after the way their first season in Chicago played out. Imagine the tenor of fans this winter if the Cubs were planning on cruising into next year with Chatwood as a projected member of the rotation.

There's a strong argument that the reliability Hamels brings is well worth the $20 million and financial constraints the Cubs now face. 

It's much easier to find a reliable member of the bullpen than a solid starting pitcher with the upside of Hamels. Relievers can pop up from all over the place, as Jesse Chavez proved in 2018.

To play devil's advocate, if the Cubs are as limited financially as they are saying, they could've done a whole hell of a lot with that extra $13 million in savings from not picking up Hamels' option and keeping Smyly instead. (Though that obviously is not enough money to turn around and add Bryce Harper just because Hamels is off the books.)

Smyly missed all of 2018 to Tommy John recovery and $7 million ($5 million hit against the luxury tax) would've been a lot to pay for an unreliable option like that, but he showed signs of health in September and would've represented an option in either the rotation or bullpen.

That would then leave $13 million (or close to it) to fill in other gaps on the roster, namely in the bullpen while also potentially adding a veteran backup catcher and more depth for the starting rotation alongside Smyly, Chatwood and Mike Montgomery.

The offseason is far from over (pitchers and catchers don't report for another 5+ weeks) but as it stands right now, the Cubs bullpen appears in worse shape than it was heading into 2018 spring training. They will be without closer Brandon Morrow for at least the first couple weeks of 2019 due to surgery to clean up his elbow after a bone bruise erased his entire second half.

There's a valid case to be made on either side of the Hamels decision, but the Cubs drew their line in the sand months ago and will have to add to the roster in other ways.

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Explaining Cubs' budget woes: Why Theo Epstein's front office is limited this winter

Explaining Cubs' budget woes: Why Theo Epstein's front office is limited this winter

Money makes the world go 'round.

It's also been the main topic of conversation during this pivotal Cubs offseason. 

Fans want the Cubs to spend more money — namely on a guy like Bryce Harper, but really on anything or anybody that could help the team get back to the Promised Land.

The Cubs owners and business operations, however, have other ideas in regards to the budget for Theo Epstein's baseball operations department.

There are a lot of questions about the Cubs' budget and while this is no means a comprehensive rundown of the situation, here's what's going on and how it's affecting the team this winter:

The timeline and a tough end to 2018

Let's start at the beginning of this Payroll Saga.

The Cubs, their fanbase and pretty much all of baseball expected the North Siders to be playing more than one playoff game in October 2018 (even Milwaukee anticipated another run-in with the Cubs in the NLDS).

It didn't work out that way, leaving Cubdom stunned and searching for answers. Some 15 hours after the Cubs' season ended in abrupt fashion, Epstein sat in front of the Chicago media and answered questions for 75 minutes, passionately speaking about how the front office and coaching staff need to figure out how the team broke down and ensure it never happens again.

Epstein's presser made it seem like a giant offseason was coming, teasing the potential for major shake-up on the roster and surely seemed to validate the long-rumored pursuit of Harper.

So what's changed since then?

Well, for starters, that was an emotional moment for Epstein. Nobody can blame him for his impassioned rants about the Cubs' offense or lack of urgency, etc. The sting of a surprising loss was still so fresh.

At that moment, Epstein also didn't have the Cubs' budget for the winter and heading into 2019. The Cubs set their official budget typically in late October or early November after sorting through everything once the playoffs end.

Epstein and the Cubs front office had a decision to make on Cole Hamels' $20 million option at the end of October and they subsequently traded away Drew Smyly and his $7 million 2019 contract to help make room for Hamels. That's when word started to trickle out about the Cubs' money issues.

The Cubs then talked about their budget problem publicy at the GM Meetings in Southern California in early November and they did not sway from that stance throughout the Winer Meetings that ended in Las Vegas last week, where the Cubs insisted nothing has changed with the budget and they haven't suddenly discovered more wiggle room.

There are those who believe this all may be a smokescreen from the Cubs, who are playing coy in an effort to gain a competitive advantage or bring the price down in the Harper Sweepstakes.

Sooo...do the Cubs have the money to go over the budget if it's the *right* player?

"It doesn't do us any good to ever talk about specifics with money," GM Jed Hoyer said at the Winter Meetings last week. "It just doesn't help. Ultimately for us, we try to keep those numbers internal as the most important thing. I guess I never really answer that question directly."

Luxury tax — it's not just the Cubs

Sure, Major League Baseball does not have a technical salary cap like the NFL, NHL or NBA.

But this new iteration of the luxury tax is essentially acting as a salary cap for teams around the league because the penalties are so severe. Only two teams went over the luxury tax in 2018 — the Nationals and the World Champion Red Sox.

Even while franchise valuations are continuing to climb at record levels, player payroll is plummeting. For the first time in nearly a decade (since 2010-09), MLB teams spent less money in 2018 than the year prior — payroll was down more than $115 million.

MLB teams spent only $4.548 billion on players in 2018. Your first thought may be to focus on the word "only?!?" but the Cubs franchise alone is valued at $2.9 billion in April 2018. That doesn't mean the Rickettses have $2.9 billion in liquid assets, but it illustrates how the franchise (like others around the league) is thriving and yet a smaller percentage of the overall revenue is going to players.

It's not just the Cubs — look around baseball. The Phillies initially kicked off the winter saying they were going to spend "stupid" money and now they are downplaying their interest in Harper and Manny Machado. The Yankees have printed money for the last 20+ years and are supposedly not shopping at the top of the free agent market this offseason. Even the Dodgers, who have come up short in the World Series two years in a row, have been making a concerted effort to cut payroll.

Current player salary

This is the old "the proof is in the pudding" aspect of the budget. Want to know why the only true addition the Cubs have made so far this winter is the $5 million over two years committed to a utility infielder?

They're on track for a 2019 payroll that will climb over $209 million and that's before they add any other pieces this winter (like a bullpen arm or two and a backup catcher). And that's an OPENING DAY payroll projection and doesn't account for any salary the front office picks up midseason (as they did last year with Hamels, Brandon Kintzler, etc.).

The Cubs' previous record for Opening Day payroll came in 2018 at a little north of $182 million. 

So not only are the Cubs on track for the highest payroll in franchise history, but they're on pace to obliterate the previous record by nearly $30 million. If they actually signed Harper and added a veteran backup catcher and another reliever or two, that number would jump to $60-$70 million over the previous high water mark for payroll unless they could shed some serious salary before Opening Day.

It's totally understandable fans want the Cubs to do more and improve the roster, but it's not fair to say the team is "cheap" considering they're paying more for the roster than they have at any other point in the 143-year history of the team.

At the moment, the only other MLB team set to go over the $206 million luxury tax threshold for 2019 is the Red Sox, who just re-signed Nathan Eovaldi for a $17 million/year coming off a World Series championship.

Now, there are two numbers that matter to teams — the yearly salaries and the AAV (average annual value) of a contract. The latter is what counts against the luxury tax, so even though Jason Heyward is set to make $20 million in actual take-home pay in 2019, the average annual value of his 8-year, $184 million contract is $23 million per season. So Heyward counts as $23 million toward the $206 million luxury tax mark.

With regards to the Cubs' budget, they are focused on how much they're actually paying players in 2019, not the average annual salary. So even Daniel Descalso is getting deferred money on a very minor deal — he'll take home $1.5 million in 2019, but his average annual salary is $2.5 million for each 2019 and 2020.

Barring anything crazy occuring over the next two months, the Cubs will assuredly surpass the luxury tax threshold and thus will be paying extra money after 2019. For reference, the Red Sox were forced to pay nearly $12 million in 2018 strictly for taxes. The Cubs had to pay $2.96 million to the tax after their World Series run in 2016.

The more the Cubs go over the luxury tax, the more they have to pay.

Here's a breakdown of the Cubs payroll (as of Dec. 19) that impacts the 2019 budget (so not the luxury tax):

Jon Lester - $27.5 million
Cole Hamels - $20 million
Jason Heyward - $20 million
Yu Darvish - $20 million
Kris Bryant - $14 million*
Ben Zobrist - $12.5 million
Tyler Chatwood - $12.5 million
Anthony Rizzo - $11.29 million
Jose Quintana - $10.5 million
Brandon Morrow - $9 million
Kyle Hendricks - $8 million*
Javy Baez - $6.5 million*
Steve Cishek - $6.5 million
Pedro Strop - $6.25 million
Addison Russell - $5.25 million*
Brandon Kintzler - $5 million
Brian Duensing - $3.5 million
Kyle Schwarber - $2.75 million*
Carl Edwards Jr. - $2.25 million*
Mike Montgomery - $2 million*
Daniel Descalso - $1.5 million
Willson Contreras - $600,000**
Albert Almora Jr. - $600,000**
Ian Happ - $600,000**
David Bote - $600,000**
Victor Caratini - $600,000**
Kyle Ryan - $550,000

(Note: * denotes projected arbitration salary; ** denotes player is pre-arb and will make roughly $600K as league minimum salary)

That's 27 players — a complete 25-man roster plus Morrow (slated to begin the season on the disabled list) and Russell (suspended through at least April). 

Russell's suspension is without pay, so the Cubs will not have to pay him roughly $870,000 of his 2019 projected arbitration figure.

So...how did we get here?

Last winter, it seemed like a guarantee that the Cubs would at least have a seat at the table in the Harper Sweepstakes but now that this star-studded offseason is upon us, the Cubs are on pace for the slowest offseason of Epstein's regime.

How did the Cubs get to this point?

—Last offseason's hangover

This front office has been famously aggressive each winter since the Cubs' contention window opened in 2015. First it was adding Heyward, Zobrist, John Lackey and bringing back Dexter Fowler ahead of the 2016 championship season. Then it was trading for Wade Davis and signing Koji Uehara, Jon Jay and Brian Duensing before 2017. That led to last winter, when Epstein and Co. signed Chatwood, Smyly, Morrow, Cishek and Darvish.

It's that last offseason that really has a carry-over effect to this winter. Say what you want about Heyward's contract and there's no denying a guy making $23 million/year has a huge impact on the budget. But he's at least given the Cubs 4.0 WAR, a strong clubhouse presence, Gold Glove defense and delivered the most important speech in the history of the franchise.

Chatwood, Smyly, Morrow, Cishek and Darvish combined to contribute only 1.1 WAR to the 2018 Cubs while taking home $56 million. The team still owes $145 to this group of pitchers (minus Smyly's salary now that he's been shipped off to Texas) over the next few seasons and each of the four remaining pitchers carries a rather significant question mark entering 2019.

Last winter serves as a pretty damn effective cautionary tale that the Cubs can't keep spending wildly each winter with no repercussions. It's also a much tougher sell from Epstein's front office to ask for more money when the budget increase they were afforded last offseason failed to deliver (through one season, at least).

—Lack of young pitching

This has been discussed ad nauseam, but the main reason the Cubs are at this point with a tight budget is because the only way they've been able to build a big-league pitching staff during these years of contention is by spending an exorbitant amount of cash. 

Rob Zastryzny is the most accomplished drafted-and-developed pitcher in the Epstein regime and he has appeared in just 18 games and tossed only 34.2 innings over the last three seasons.

Almost 64 percent of the Cubs' projected 2019 payroll is going to the pitching staff, with more than $133 million committed to the 13 arms under contract at the moment. Only Ryan is projected to make less than $2 million and three pitchers (Lester, Hamels, Darvish) will pocket at least $20 million.

The Cubs badly need some cheap and effective pitching to help turn around their payroll/roster issues and the best way to fix the issue is having pitchers come up through the farm system to eat up some big innings in the majors.

—The Cubs have gone all-in to contend the last few seasons

It's not as if the Cubs haven't been spending money on the payroll. Prior to 2016, the highest Cubs year-end payroll for the 40-man roster came in 2010 with a $142.4 million tab.

The Cubs have obliterated that total the last three seasons (per Cot's), racking up year-end payrolls of $205.9 million (2016), $183.3 million (2017) and $193.3 million (2018).

Other factors

The Cubs would not suddenly be able to afford Harper if they had played another week or three in the postseason, but that extra revenue certainly would've helped.

The Ricketts family has spent more than $750 million in rehabbing Wrigley Field and the surrounding area, as Epstein pointed out at the GM Meetings last month. Sure, that hardly impacts the team's on-field success (if it even affects it at all) and it's not like the billionaire Rickettses are suddenly using food stamps or flying Spirit airlines because of the renovations to Wrigleyville.

The Rickettses have also made an insane amount of money from the Cubs' recent success (again, want to reference the franchise valuation of $2.9 billion), but we're simply pointing out that there have been other expenses beyond the payroll.

—The Cubs’ TV rights beyond the 2019 season are still up in the air. But the Cubs have discussed starting their own network, which will take a significant financial investment, like those poured into Wrigley Field and the surrounding area. That includes a financial risk without guaranteed revenue from an established network, but the Cubs hope it could be more financially lucrative at some point.