The Cubs’ IFA Mistake

There hasn’t been any significant news on the International Free Agency front since the Cubs officially signed Catfish Tseng last week. (The Cubs don’t seem to be in on Alexander Guerrero, which is somewhat disappointing, though not unexpected). As such, I thought I would present a few thoughts on the Cubs’ July 2nd IFA strategy, since it seems that a few are still not convinced that the team made any sort of error in judgement in the market. I don’t think it’s a big deal, but I’m not one to let a good debate die, and I certainly don’t think the team deserves media accolades for their grand strategy.

My position is that the team intended to stay within their allotted pool space. I also don’t think there is anything about their actions during IFA signing that should have led us to believe that the team was in dire financial straits. And I think that all of this is fairly obvious to an outside observer. If you agree with me, or are just counting down the days until the start of the NFL season, no need to read on.

1. Jen-Ho Tseng: Fallback or Target?

Take a minute to compare Baseball America’s predictions for top 30 signings to the actual outcomes. This wasn’t guesswork. There wasn’t a whole lot of mystery about where most of these players were going to sign, since most had already agreed to deals. The one big exception was Tseng, a Boras client who acted like Boras clients do, stringing out the process to get the best offer. Now, it could be the case that the one guy out of all the available IFAs that the Cubs targeted for overspending happened to also be the player that didn’t have an agreement in place by the Fourth of July. More likely, though, is that he was the best (and nearly only) available fallback when the team realized that acquiring the necessary pool space to sign Eloy Jimenez was going to be more costly than they thought.

2. International pool money is worth more than it’s weight in dollars.

This is a bit of a subtle point, but fairly obvious if you think about it. The reason that the international cap exists is because teams would spend more money on these players if they were left to themselves. With the exception of the occasional barren year for talent here or there, this means that a dollar’s worth of pool space is going to be worth more than a real dollar. The implication here is that if the Cubs were trying to overspend their pool while saving some money in the process (as is claimed by their defenders), they would have been better off doing anything but what they did. Want to trade Ronald Torreyes because he’s redundant? Go for a prospect or cash elsewhere, not pool space. Want to maximize the return on Scott Feldman? Ask for cash or a lower-level arm instead of pool space. In fact, this is what the Cubs did with Carlos Marmol. Marmol essentially had no value (he cleared waivers for the Dodgers after they acquired him), but the Cubs managed to get $500k in salary relief by sending along $210k in pool space.* Teams targeted pool space in order to stay within their spending limits, not to exceed them. I see no reason to believe the Cubs were an exception.

*The inclusion of Guerrier complicates the issue a bit, but I think the general point stands.

3. The Cubs didn’t save much money.

For all their effort, the team really didn’t spend that much less than they would have had they not made any trades for space. The Cubs ended up spending $10.2 million on IFAs when including the penalty tax. Without any acquired space, they would have spent $11.1 million. However, if they had acquired an extra $613k in space ($404k without the Marmol trade) and passed on Tseng, they would have spent only $6.4 million. That was the cost-saving move, not getting more than halfway there and overspending anyway. And it would have come with the added bonus of no penalties in 2014. That the Cubs didn’t go that route to me is a clear signal that the additional space was too expensive (likely in terms of prospects), and they weren’t willing to pay for it.

4. Don’t take my word for it.

To your average beat reporter, covering the acquisition of 16-year old Dominicans is above and beyond the call of duty. They simply have no reason to doubt front office explanations on the matter, no matter how ad hoc. The front office leaks their intentions in early July and then confirms in mid-August? Sounds like consistency.

Fortunately for those of us who are really interested, late June, reiterated that the Cubs were one of these teams in early July, and has heard nothing to convince him otherwise (see 

 

I’m not bothered by what the Cubs did. It would be nice if they had perfect foresight, but for most of us, a front office that’s actually willing to spend in the international market is still a refreshing upgrade. I wasn’t crazy about the Torreyes trade, and am glad that they didn’t have to give up another prospect of that caliber in order to stay within their space. If there is anything to take from this, it’s that not every move is going to be brilliant. Theo has said that from day one, and on that front, I completely believe him.

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