The Cubs missed the postseason for the fourth consecutive season. Chicago completed 83-79 for a second straight 12 months. 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 group’s payroll outlook. Ricketts confirmed that the Cubs narrowly exceeded the $237MM base aggressive stability tax threshold — as president of baseball operations Jed Hoyer instructed they might in August. Like most homeowners, Ricketts didn’t present a transparent reply as as to if he’d be keen to pay the tax for a second straight 12 months.
“The penalties on CBT, they develop over time and so that you need to watch out while you do it,” Ricketts mentioned. “And so if there’s ever some level sooner or later the place there’s a big monetary dedication you need to make midseason, it’s important to be considerate about it.” Ricketts is referencing the escalating penalties for groups that pay the tax in consecutive seasons. The Cubs stayed under the CBT threshold in 2023, so that they’re first-time payors this 12 months. 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 group.
Paying in any respect means the Cubs could be taxed at a 30% charge for his or her first $20MM in overages in the event that they surpass the edge subsequent season. That jumps to 42% for the subsequent $20MM and comes with larger penalties (75% and 90%) for the respective $20MM after that. The penalties would enhance if the Cubs paid the tax for a 3rd straight 12 months.
The CBT additionally contains larger 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 choices within the 2025 draft and $1MM in worldwide bonus pool house.
Subsequent 12 months’s base threshold climbs to $241MM. Cot’s tasks the Cubs round $150MM in CBT obligations. That assumes Cody Bellinger won’t choose out of the ultimate two seasons on his contract however doesn’t embody arbitration projections. MLBTR contributor Matt Swartz tasks the 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 may knock that all the way down to the $20MM vary.
That’d depart roughly $70MM earlier than the bottom threshold, so there’s loads of payroll room earlier than the tax turns into a priority. Ricketts’ be aware in regards to the potential for midseason acquisitions may level to a desire to remain under the tax line throughout the offseason. A group’s CBT quantity isn’t calculated till the top of the season. Wage acquired in midseason pickups counts on a prorated foundation within the calculation.
Allocating these assets might 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 remains to be looking for 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 12 months of their deal, thereby stopping from working in a lame duck scenario. Ricketts sidestepped a query concerning a possible Hoyer extension. “He’s underneath contract, that’s the way in which I see it,” the proprietor advised Montemurro. “I believe he’s motivated. … I believe Jed’s going to have a fantastic offseason and put us again within the playoffs subsequent 12 months.”
