A Bryant Extension Would Save Money

by Moshe W.

The Cubs could save $7m in luxury tax penalties by signing Kris Bryant now to a four-year contract covering his arbitration years.

The Cubs will face a salary cap crunch as soon as arbitration salaries rise for most of their young core. The Cubs have plenty of cap room this offseason (). Yet the Cubs will need to use most of that space to sign pitching this offseason. Once they do, the Cubs will not have much cap space moving forward into 2019-2021, during the heart of their competitive window.

As such, I expect the Cubs will exceed the luxury tax in 2019, 2020, and 2021, in order to stay competitive. Luxury tax penalties rise each year a team stays over the cap. The penalties also increase the more money a team spends over the cap. Signing Bryant to a four-year deal today would lower the Cubs cap liability in 2020 and 2021, when cap penalties would be highest.

In my chart, I estimate Bryant will earn the following salaries in arbitration: 2018 - $8.9m; 2019 - $14m; 2020 - $19m; & 2021 - $24m. That equals $66m over four years. These arbitration salaries are one-year contracts. As a result, Bryant’s cap hit grows larger every year. Multi-year contracts, however, are averaged for cap purposes. If Bryant signed a four-year contract for the exact same four salaries, his cap hit all four years would be $16.5m. That would increase his cap hit in 2018 by $7.5m, a year when the Cubs do not plan to exceed the cap. Yet it would lower his cap hit by $7.5m in 2021. The penalty on $7.5m in 2021, could be as high as $7.13m. In other words, the Cubs could save themselves over $7m, without shortchanging Bryant in the process.

Bryant is a Scott Boras client. Boras is well known for advising his clients against signing extensions, so I don’t expect Bryant to sign any deal that extends beyond his arbitration years (2018-2021). But Bryant would probably be happy to sign a four-year deal through his arbitration years. He might even give the Cubs a small discount for guaranteeing the money now.

Such a deal does have some risk: Bryant might have a serious injury or catch whatever bug bit Jason Heyward when he left St. Louis. But the potential savings make it worthwhile.

For me, the most exciting thing about seeing a Bryant four-year deal, would be the confirmation that the Cubs are planning on spending above the salary cap soon. I am a firm believer that the Cubs need to start flexing their financial muscles and behaving like the big-market team they are. Signing Bryant would not only confirm the Cubs intend to spend big, but would also show they are planning ahead for the process.

Comments

DFA'ing bryant would save even more money. MONEYBALLS!

Totally unrelated, but wouldn't Billy Hamilton be interesting on this team as a 4th OF type?

He would. I think that is a better profile for him, especially given his mediocre OBP and runs scored total over his career. But I don't think he sees himself as a 4th outfielder, which could be a problem. He's got two more years until he hits free agency and he might balk at anything that would drive his perceived value down like that.

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  • bradsbeard 3 hours 3 min ago (view)

    Great info. Thanks! 

     

  • Arizona Phil 3 hours 3 min ago (view)

    BRADSBEARD: What happens on 12/2 is each club submits what's called a "Central Tender Letter" to the MLB LRD listing which unsigned players on the club's MLB Reserve List (40-man roster) are being tendered a contract and which unsigned players are not being tendered a contract. 

    The CTL is sufficient as far as providing proof of contract tender.  

    For players being tendered contracts, the CTL must list the club's MLB salary offer, a minor league split salary offer (if the club so chooses), and performance bonuses (if any) the club is offering to the player.

     

  • crunch 11 hours 39 min ago (view)

    theo walked away from a big payday for an executive in his last season as a cub without having another job scoped out...and according to him he's not even looking one.

    something tells me this isn't going to be a fun off-season for cubs fans.

    the state of the cubs household aside, i wouldn't exactly be shocked to see theo with the mets, though he's supposedly not on their radar at the moment.

     

  • Dolorous Jon Lester 12 hours 3 min ago (view)

    The Cubs have been at the forefront of tone-deaf owners in terms of financial hardship during the pandemic. "The game isn't as profitable as most people think"

     

  • tim815 1 day 8 hours ago (view)

    The decision on the amount comes later.

     

  • bradsbeard 1 day 11 hours ago (view)

    At the point when the team makes the initial contract tender, do they have to offer a specific salary, and if so is that the same number the team takes into arbitration? Or does the specific number the teams files at for arbitration happen at a later date?

     

  • Arizona Phil 1 day 14 hours ago (view)

    jdrnym: A player who is signed to a contract that does not include a minor league split salary is paid his full MLB salary while optioned or after being outrighted to a minor league club.

    So if a player goes to arbitration and is awarded (let's say) a $2.5M salary by the arb panel, the contract will not include a minor league split salary or performance bonuses, and if the player is sent to the minors he is paid the full $2.5M while in the minors.

     

  • Hagsag 1 day 15 hours ago (view)

    Maybe Trump can give them a loan.

     

  • crunch 1 day 15 hours ago (view)

    it's not exactly looking good when the cubs brass is complaining about "losing 100m in revenue" when a huge chunk of that seems to include Hotel Zachary.  it looks like the entire "entertainment complex" is the cubs as far as the Ricketts are concerned...and the team might have to suffer a bit because they couldn't fully realize profits last year.  they've publically stated that the big incoming tax credits from the city they're going to realize for stadium work won't help the cubs payroll.

     

  • jdrnym 2 days 1 hour ago (view)

    If a player doesn't have a split salary in his contract, how much is he making when in the minors (or how is that salary determined)?

     

  • crunch 2 days 7 hours ago (view)

    we want kyle schwarber to not be mark trumbo so badly...

    either way, the NL having or not having the DH needs to be figured out pretty quickly for a lot of off-season sanity.

     

  • crunch 3 days 10 hours ago (view)

    minor league hitting coordinator chris valaika moves up assistant hitting instructor for the big league team.

    looks like a.iapoce's job is safe.

     

  • Cubster 3 days 14 hours ago (view)

    Jed Hoyer gets a new 5 yr contract that runs through 2025 season. 

     

  • Cubster 3 days 15 hours ago (view)

    https://www.baseballamerica.com/stories/19-mlb-pro...

    BA's list of 19 prospects who impressed at Instructs. One Cub:

    Chase Strumpf, 2B, Cubs

     

  • Jackstraw 4 days 10 hours ago (view)

    Waiting for Ryan Pace to be available.  He should be a week from tomorrow.

     

  • crunch 4 days 10 hours ago (view)

    i haven't even heard a rumor...which is interesting since "virtual" winter meetings start in a couple weeks.

    surprised dan kantrovitz hasn't been named "interim GM" or something...which makes me wonder how wide of a net they're casting to fill the position.  he was snagged from the A's and was an assistant GM there (and director of scouting for STL).