CHICAGO -- Cubs president of baseball operations Theo Epstein has made it a policy not to delve into specifics when it comes to his team's payroll plans in any given year. That remained the case when Epstein was asked earlier this week about the 2020 financial situation.
"As an organization, we're not talking about payroll or luxury tax at all," Epstein said after manager David Ross' introductory press conference on Monday. "I feel like every time we've been at all specific, or even allowed people to make inferences from things we've said, it just puts us in a hole strategically. We'll see how things shake out at the end of the year."
Want to gauge the Cubs' 2020 payroll? Grab a calculator and do the math.
Of course, Chicago's situation as it plots its offseason plans is not as simple as adding up the known or projected salaries for '20. Epstein has called this an offseason of "real change" and that could mean subtracting from the core group via trade in order to address needs on the Major League roster. That leaves a lot of unknowns about how the final financial picture will look, or how the Cubs can approach the open market.
At the moment, there is roughly $107 million locked into eight contracts for next season. Then, it is a safe bet that the Cubs will pick up the team options for both Anthony Rizzo ($16.5 million) and José Quintana ($10.5 million). When factoring in other contract decisions, potential arbitration raises and other costs, both the '20 player payroll and the figure used for the Competitive Balance Tax ("luxury tax"), the Cubs already project to be in the neighborhood of $200 million.
On Wednesday morning, Cubs chairman Tom Ricketts went on 670 AM The Score in Chicago and discussed the team's finances without getting too specific about its strategy for ‘20. He pointed out that the 84-win Cubs ran the second-highest payroll in baseball (an estimated $234 million at season's end), but missed the playoffs in 2019.
"It's not about how much you spend," Ricketts said on the Mully & Haugh Show. "It's about how much you win. The correlation between spending and winning isn't nearly as strong as we'd like it to be in a sense. Obviously, the top couple teams in the league [in payroll] didn't make the playoffs. We spent more than every team that made the playoffs -- probably a couple of them combined. Even if you really thought spending was the answer, the free-agent market is always fraught."
Ricketts also noted that the Cubs are risking "bumping into the luxury tax" at their current level.
In 2019, the first Competitive Balance Tax threshold was $206 million and the Cubs finished with a CBT payroll in the $230 million range. Teams who surpass the first threshold must pay a 20 percent tax on the overage and there is a 12 percent surtax for landing in the $228-$248 million range. If a team moves north of $248 million, the tax penalty rises to 42.5 percent and the team will have its highest selection in the next Draft moved back 10 places, unless the pick falls in the top six. In that case, the team will have its second-highest selection moved back 10 places instead. Tax rates increase when there are overages in consecutive seasons.
The first luxury-tax threshold will climb to $208 million for the '20 season and then to $210 million in '21. The salary number used for that payroll calculation is the average annual value of a contract.
"This year we'll pay several million dollars to the league," Ricketts said, "which is just kind of a dead-weight loss that goes to the other teams. And on top of that, if you do it for too long, the fees go up. And if you do it for too much, then you lose Draft picks. Ultimately, it's great to have the financial resources that we do. It's an advantage, and there's no doubt about it."
During the club’s final road trip last season, Epstein was asked if the Cubs' new Marquee Sports Network -- launching in February -- will lead to more resources for the baseball operations department as soon as next year.
"The new TV deal," Epstein said, "at least for the first few years, basically means the exact same thing for us as the old deal. The first few years will basically replicate the old deal, but then with potential for real growth moving on."
Epstein added that the front office will not be making any baseball decisions in the name of ratings for the team's upcoming network.
"The baseball decisions will be unrelated to any TV considerations," Epstein said. "The guys are really excited about this project and the network and they understand it's a long-term thing and it's going to grow. It's not dependent on the number of wins we have next year. Obviously, we want to win as many games as we can.
"We want to win the World Series, but it's not because of the TV network. It's just because that's the goal. So, it's unrelated and there's a wall between baseball decisions and anything related to the TV network."
One important aspect of the Cubs' roster is the fact that several core players are closing in on their free-agent eligibility.
Rizzo has a team option for '21, but he could enter free agency with Kris Bryant, Javier Báez and Kyle Schwarber in '22. Willson Contreras follows suit in '23. The Cubs will likely approach some within that group about possible extensions this offseason, and those talks could influence how the front office maps out its path in the coming weeks and months.
Even with that element in mind, Ricketts said on The Score that he believes the Cubs are past the point of focusing on a "window" of contention.
"We should be able to be consistent without windows," Ricketts said. "We have the resources financially. We have the good, young players. Maybe we can't keep them all because of the salaries that they'll demand over the next few years. But ultimately, now I think we can stop talking about windows. We should be consistent, and we should be looking toward building a division-winning team every year."