2012 Cubs Payroll Outlook

Mercurial Outfielder asked recently if I’d taken a look at next year’s payroll. Turns out I had done so about a month ago and had forgotten. In that piece I didn’t show any tables, but figured I’d go ahead do that here. MO mentioned that Gordo has been saying the Cubs payroll will be around $120 million next year so maybe keep that in mind.

Guaranteed Contracts

Player 2012
Ryan Dempster 14
Carlos Marmol 7
Sean Marshall 3.1
Carlos Zambrano 18
Marlon Byrd 6.5
Alfonso Soriano 18
Other 7
Total 73.6

Other: the Cubs owe Carlos Pena $5 million next year (he was paid $5 million in 2011) and the Cubs owe $2 million in a buyout to Aramis Ramirez. That’s assuming they don’t pick up their option, which is not at all likely. The Cubs are more likely to re-sign Kosuke Fukudome for $14 million than pay Ramirez the additional $14 million.

Arbitration Eligible Players

Player, Arb Year Est. Proj WAR Estimated $ mb21 Estimated $
Matt Garza, 3 3.3 9.7 9
Koyie Hill, 3 0 1 0
Geovany Soto, 2 3.3 9.7 6
Jeff Baker, 2 0.8 2.5 1.5
Blake DeWitt, 1 0.4 1.4 1.3
Randy Wells, 1 2.9 5.7 3.5
Total 30 21.3

For the projected WAR, I used current rest of season ZiPS projections and then adjusted for age. I’ve assumed the Cubs will finally part ways with Koyie Hill, but included him in the estimated $ based on projections. I did this because he had the same projection this season and they had no trouble offering him arbitration. My estimated salaries include him being non-tendered. For the Estimated $ I used the 40%, 60% and 80% of free agent values for 1st, 2nd and 3rd year eligible players. Matt Garza is eligible for the 3rd time, but he’s a Super 2 so his 3rd year is the equivalent of a 2nd year.

Auto-Renewal Contracts

Only 12 players under contract, which means a minimum of 13 auto-renewal players. They make the league minimum and that toal is $5.2 million

Non-Active Roster

The players on the 40-man roster, but not on the 25-man roster are paid a minimum of $50,000. I’ve assumed all 15 will be paid $50,000. This is a total of $750,000.

Total 1: $109.6 million
Total 2: $100.1 million

The first total is the estimated salaries based on their projections and the second is with my estimated arbitration values.

I’ll be using the midway point between those two figures from now on. The Cubs have $105 million committed to their 2012 roster at this point. They could trade some players, which obviously affects it, but it also takes wins away from the team. It’s not like you trade Zambrano and then add wins by signing someone. You trade Zambrano AND his wins and then you sign someone and get his wins.

The Cubs 2011 payroll is $134 million. Several writers have said the payroll will go down. Gordo has said in the 120 range. If it is in fact only $120 million, the Cubs have just $15 million to spend in the offseason. If they keep it at $134 million, they have $29 million to spend.

The only way the Cubs are getting Albert Pujols is if they hand out yet another backloaded contract. I’m not against backloaded contracts. The present value of a contract is always less when you pay more money later so it’s a good things for teams to do, but it does make things more difficult at the end of the contract as we’ve seen. It makes things easier in the early part of the contract, which people who hate backloaded contracts conveniently ignore. Even if they find a way to get Pujols, they won’t have money for anyone else.

Let’s say the Cubs find someoe to trade Zambrano to. They send along $6 million. They pay $2 of that this season and then $4 million next year. They’ve freed up 14 million in payroll next season. The value of a win next season is probably going to be about $4.77 million. That will buy the Cubs 2.94 wins. Zambrano at $18 million would be projected around 2.5 wins. So trading Zambrano and using that money to sign someone else adds only half a win to the team.

It’s doubtful the Cubs trade any of the other players with guaranteed contracts: Dempster, Marmol, Marshall, Byrd and Soriano. If the team is trying to contend, you really don’t want to trade guys like Garza, Wells and Soto who are providing excellent value for the money they’re being paid. you can’t buy more wins on the free agent market than they’ll produce for less than free agent value. Take Garza for example. He’ll be paid somewhere between $9 and $10 million next season. That’s just 60% of his free agent value. If you traded him, you buy only 2 wins on the free agent market. You lose 1.3 wins. Same thing with Soto. It’s even worse with Wells.

So if you want to contend, you have to keep those guys. However, the Cubs need to finally take a look at the roster and figure out if they can or cannot contend. They then need to make decisions based on that rather than hopes and dreams. I don’t expect them to, but it’s what they should do. They should look into trading as many of the guaranteed contracts as they can. They should look at trading Garza, Soto and even RAndy Wells. They should rebuild. They don’t have the money to contend next season.

I know they won’t do this, which just prolongs the number of years they’re going to suck, but that’s Cubs baseball.