Feel the Chill
The Kansas City Royals have signed recently-released RHRP Justin Grimm to a major league contract ($1.25M base salary with another $300K in potential performance bonuses).
But because Grimm was signed to a non-guaranteed contract and was released by the Cubs prior to MLB Opening Day, there is no salary offset for the Cubs. The $530K termination pay Grimm got from the Cubs is - NOT - offset by the $1.25M Grimm gets from the Royals. They are considered two unrelated deals, so Grimm ultimately could make upwards of $2M+ in 2018 (close to the $2.2M he was scheduled to make if he had not been released) if he reaches all of the performance bonuses (the $530K termination pay he got from the Cubs + the $1.25M base salary he gets from the Royals + the $300K in potential performance bonuses).
If Grimm had been released by the Cubs after MLB Opening Day, he would have received the entire $2.2M salary he got from the arbitration panel as termination pay, and then the Royals could have signed him for just the MLB minimum salary ($555K) and the Cubs would have been on the hook for the remaining $1.645M.
The Cubs have released veteran RHRP Justin Grimm.
Because he was released 15 or fewer days prior to MLB Opening Day, Grimm will get 45 days salary as termination pay (which is about $530K of the $2.2M 2018 salary that he was awarded by an arbitration panel last month). Note that the Cubs would have saved themselves about $180K if they had released Grimm prior to yesterday (Wednesday), because players with non-guaranteed contracts receive only 30 days salary as termination pay if released more than 15 days prior to MLB Opening Day.
So the Cubs MLB Reserve List now stands at 39 (one slot is open), and 39 players are assigned to the Cubs Spring Training Active List (including ten NRI).
3/11 ORIGINAL POST:
A player on an MLB Reserve List (40-man roster) signed to a non-guaranteed contract who is released more than 15 days prior to Opening Day receives 30 days salary as termination pay (paid at the "minor league rate" if the player is signed to a "split contract"), and a player on an MLB Reserve List signed to a non-guaranteed contract who is released 15 or fewer days prior to Opening Day receives 45 days salary as termination pay (all players paid at the "Major League rate"). A player on an MLB Reserve List signed to a non-guaranteed contract who is released during the MLB regular season receives 100% of his salary as termination pay (paid at the "minor league rate" for players on Optional Assignment to the minors). An unsigned player on an MLB Reserve List released during the off-season receives no termination pay.
So this coming Tuesday (3/13) is the last day a club can release a player on its MLB 40-man roster who is signed to a non-guaranteed contract and pay the player only 30 days salary (which is about 1/6 of the player's salary) as termination pay - AND - at the "minor league rate" if the player is signed to a split contract (meaning the player's salary varies depending on whether the player is on the club's MLB 25-man roster or is on Optional Assignment to the minors).
What this means is that if (for example) RHRP Shae Simmons (who has had shoulder issues recently and a long history of arm problems throughout his career) is signed to a non-guaranteed contract and then is released by this coming Tuesday, the Cubs would only have to pay him about $20,000 (30 days pay based on his minor league split salary of $120K) as termination pay. If the Cubs were to wait until after Tuesday but still release Simmons prior to MLB Opening Day, he would get 45 days pay based on his major league salary (1/4 of $750K, or about $187,500, a difference of about $165K). What the Cubs CANNOT do is send Simmons to the minors by optional or outright assignment while he is injured, because a club (in most cases) cannot option a player to the minors while he is injured and also cannot place a player on Outright Assignment Waivers unless and until a player is able to immediately render service to whatever club might claim him.
If Simmons has a shoulder injury and the Cubs do not release him prior to MLB Opening Day, the only other choice the Cubs would have would be to place him on the club's MLB 10-day (or 60-day) DL by MLB Opening Day and owe him the full $750K but with the possibility that he might be able to pitch later in the season, or possibly release him a a later date (but still owe him 100% of his 2018 salary as termination pay).
These two release deadlines (30 days salary -- with a variance if the player is signed to a "split" contract" -- as termination pay if the player is released more than 15 days prior to MLB Opening Day, and 45 days salary -- paid at the "major league rate" for players signed to a "split contract" -- as termination pay if the player is released 15 days or fewer prior to MLB Opening Day) apply to all players on a club's MLB 40-man roster who are signed to non-guaranteed contracts, which would include ALL pre-arbitration (auto-renewal) players as well as any player who is awarded a contract by an arbitration panel (even if the player loses in the hearing), which would include RHRP Justin Grimm.
So look for the Cubs to possibly release one or more players currently on their MLB 40-man roster prior to MLB Opening Day, perhaps even by this coming Tuesday.