The Cubs missed the postseason for the fourth consecutive season. Chicago finished 83-79 for a second straight year. That’s a frustrating outcome in a down NL Central — especially since Chicago added around $30MM to its Opening Day payroll relative to 2023, per Cot’s Baseball Contracts.
Owner Tom Ricketts spoke with Meghan Montemurro of the Chicago Tribune about the team’s payroll outlook. Ricketts confirmed that the Cubs narrowly exceeded the $237MM base competitive balance tax threshold — as president of baseball operations Jed Hoyer suggested they would in August. Like most owners, Ricketts didn’t provide a clear answer as to whether he’d be willing to pay the tax for a second straight year.
“The penalties on CBT, they grow over time and so you want to be careful when you do it,” Ricketts said. “And so if there’s ever some point in the future where there’s a large financial commitment you want to make midseason, you have to be thoughtful about it.” Ricketts is referencing the escalating penalties for teams that pay the tax in consecutive seasons. The Cubs stayed below the CBT threshold in 2023, so they’re first-time payors this year. That’ll subject them to a 20% tax on their first $20MM in overages. Cot’s estimates that they were only about $300K over the line, so the actual tax payment (roughly $55K) is more or less a rounding error for an MLB team.
Paying at all means the Cubs would be taxed at a 30% rate for their first $20MM in overages if they surpass the threshold next season. That jumps to 42% for the next $20MM and comes with higher penalties (75% and 90%) for the respective $20MM after that. The penalties would increase if the Cubs paid the tax for a third straight year.
The CBT also includes higher penalties for teams that lose or add a free agent who declined a qualifying offer. The Cubs don’t have any impending free agents who’ll get a QO. If they signed a qualified free agent, they’d forfeit their second- and fifth-highest selections in the 2025 draft and $1MM in international bonus pool space.
Next year’s base threshold climbs to $241MM. Cot’s projects the Cubs around $150MM in CBT obligations. That assumes Cody Bellinger will not opt out of the final two seasons on his contract but does not include arbitration projections. MLBTR contributor Matt Swartz projects the entire arbitration class to cost around $33MM if they were all tendered contracts. Moving on from some or all of Patrick Wisdom, Yency Almonte, Christian Bethancourt, Julian Merryweather, Nick Madrigal, Trey Wingenter, Jimmy Herget and Colten Brewer could knock that down to the $20MM range.
That’d leave approximately $70MM before the lowest threshold, so there’s a lot of payroll room before the tax becomes a concern. Ricketts’ note about the potential for midseason acquisitions could point to a preference to stay below the tax line during the offseason. A team’s CBT number isn’t calculated until the end of the season. Salary acquired in midseason pickups counts on a prorated basis in the calculation.
Allocating those resources will be at Hoyer’s discretion. The front office leader is entering the final season of the five-year extension that he signed in 2020. Chicago is still seeking its first playoff appearance since Theo Epstein turned the reins to Hoyer after the ’20 season.
It’s relatively common for teams to sign executives and coaches to extensions before the final year of their deal, thereby preventing from operating in a lame duck situation. Ricketts sidestepped a question regarding a potential Hoyer extension. “He’s under contract, that’s the way I see it,” the owner told Montemurro. “I think he’s motivated. … I think Jed’s going to have a great offseason and put us back in the playoffs next year.”
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Moving on from some or all of Patrick Wisdom, Yency Almonte, Christian Bethancourt, Julian Merryweather, Nick Madrigal, Trey Wingenter, Jimmy Herget and Colten Brewer could knock that down to the $20MM range.
Maybe Almonte or Merryweather depending on their health. Hoping a better catcher than Bethancourt. Please keep none of the rest.
jbigz12
Almonte should absolutely be tendered. Merriweather is such an injury risk that they may just move on. Shame he never holds up.
Hammerin' Hank
Nick Madrigal isn’t even good enough to make the White Sox.
ATinz
Padres! Lol!
DonOsbourne
Exceeding the threshold by $300k is just bad management. There are no “ya but’s” that excuse it. Hoyer is an unimaginative, overmatched clerk.
Ignorant Son-of-a-b
Ouch!
Samuel
DonOsbourne;
Maybe.
Or it could be an inexpensive way to provide a built-in future excuse to keep the payroll in a range…..
“We’d really like to be flexible enough to take on a few salaries, but the tax considerations constrain what we can do.”
Brick House Coffee Tables Inc
The $300k feels like they had a deadline deal to unload someone and then it fell through.
Blackpink in the area
Cubs were a huge disappointment in 2024. With that kind of payroll playing in a weak division they should have won more games.
I mentioned this the other day their top 6 prospects are all due to be ready in 2025. They are going to have to make room for them or trade them for help.
YankeesBleacherCreature
The Chicago Tribune quoted Ricketts stating that the ’24 season was his most difficult season to endure while missing the playoffs. It sounds like Hoyer is in the hot seat and won’t be extended until after next season if the Cubs decide to keep him. My take is he wants Hoyer to stay under $241MM for ’25 bc he thinks they should make the postseason while having the ability to outspend all teams in the NL Central.
jbigz12
The cubs are set up pretty decently. They need to build out the back out of the bullpen and make some moves around the margins but wouldn’t surprise me to see them win the division next year.
I predict Paredes will be a flop though. Bigge will be the best ML’er in that trade from the time of the trade onward. Cubs have infield prospects on the way though.
sad tormented neglected mariners fan
It’s hard to think the cubs have that high of a payroll but not many star caliber players
But that’s what happens when belly and Swanson and shota have big contracts
johncal25
I wouldn’t consider Shota’s contract to be big. He was paid less money than Jameson Taillon. And after the year he had where he might finish top 5-7 in Cy Young and even higher in ROY I think the Cubs are pretty happy to have the affordable options to pick up assuming he can continue to pitch at this level.
YankeesBleacherCreature
Shota made less than $10MM and was a deserving All-Star this season. He’s not a Cubs problem.
sad tormented neglected mariners fan
I wasn’t saying they’re problems I was saying they weren’t superstars
But above average quality players? Absolutely
Samuel
I’ve really liked Craig Counsell as a manager. Think he’s one of the best in MLB.
He went from a Brewer organization that played in a small market, to Chicago’s most popular baseball team. Chicago being the 2nd or 3rd largest market in the US, so that even with an owner holding payroll down had almost double the payroll of the Brewers this season…..who went to the playoffs.
The Brewers have a smart front office, even with David Stearns leaving for the Mets. They have approach’s and systems in place to value potential players and to develop many when they acquire them. Hoyer has been the primary baseball guy with the Cubs for 13-14 years. Their approaches and systems are more in line with what a Mark Shapiro does – try this a little bit of something. When it comes up short try whatever the new fad is to buy another 2-4 years.
Mr. Counsell walked into a situation that is not a good one for him. Whether it’s the owner, the GM or both, he’s going to be limited in what he can do. All the people on here that have been bad-rapping him this year are mistaken. He’s a high-quality ML manager that is hardly in a high-quality organization. When Chaim takes over perhaps Craig will head south.
Oldguy58
Hoyer has made a career of riding Epsteins coattails which his lack of solo success tells you all you need to know. Maybe Ricketts can stop buying up the neighborhood and turn his full attention back to the Chicago Cubs and hire capable front office people. I realize it’s a business, but the bottom line has become more important than wins and losses to Tom.
rememberthecoop
Tom, you’re printing money @ Wrigley. Pay the tax and tell Hoyer to be more aggressive. There is absolutely no reason for the Cubs not to be serious bidders for Juan Soto. But no, that’s not gonna happen. They are all complacent. Their bellies are full. And so are the coffers.