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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 ($68m). 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 cap space 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.
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