Phil Rogers reported this morning that the Cubs may well continue spending in 2013 international free agency, ignoring imposed spending limits in continued pursuit of the best remaining players. I have my doubts, but let's assume for the moment it's true. Is this a stroke of genius by the front office in exploiting available loopholes, or something else? (Spoiler Alert: I'm going with "B"). The Cubs currently having $2.18 million remaining in their pool that can be spent without restricting their pursuit of IFAs next season, but are reportedly near a deal with top prospect Eloy Jimenez worth $2.8 million. At the moment, the cap definitely seems to be an issue. Here are the penalties for exceeding their pool space:
• 0-5 percent over pool: 75 percent tax on the pool overage.
• 5-10 percent over pool: 75 percent tax on the pool overage. Team won’t be allowed to sign a player for more than $500,000 during the 2014-15 signing period.
• 10-15 percent over pool: 100 percent tax on the pool overage. Team won’t be allowed to sign a player for more than $500,000 during the 2014-15 signing period.
• 15 percent or more over pool: 100 percent tax on the pool overage. Team won’t be allowed to sign a player for more than $250,000 during the 2014-15 signing period.
If the Cubs do go deep into the penalty, I think there are only two explanations, and neither of them are particularly flattering to the front office.
1. The Cubs intended to stay under their cap limits, but the market for acquiring pool space proved to be too expensive.
This, is the most likely scenario in my opinion. The Cubs made a flurry of moves on July 2nd in which the underlying goal seemed to be the acquisition of more space. These are not the actions of a team that intends to blow through their spending limits. As of yet, they haven't acquired enough space to sign all of their intended targets, but they may not be finished yet. A leak to a few beat reporters that gets picked up by mlbtraderumors could be specifically designed to convince potential trading partners that they really don't need the space, they are just trying to save a few dollars on the whole.
Quoth noted liberal whackjob scientist Shawn D. Goldman:
Isn’t the simplest theory here that the Rogers piece was based on a leak to get the Cubs more leverage in their ongoing trade negotiations? “No, we don’t really care about going over the limit. We’re going to do that anyways. We just want to limit the amount we go over by.”
If this is the case, and they fail to acquire enough space, I don't find it to be particularly damning of the front office. The market moves, no one can predict it perfectly. It's definitely a miscalculation, though, and the Marmol trade doesn't look great in retrospect (not that it looked great at the time).
Moreover, if they try and fail to gain enough space, they should step up pursuit of the top remaining players. Fifteen percent is the max possible penalty level, and exceeding it wouldn't incur any additional restrictions.
2. The Cubs intended to go over all along. The trades on July 2nd were just to save a few dollars along the way.
This alternative is much worse from the perspective of Cub fans. You see, the Thoyer regime has always been very deliberate when it comes to making trades. Rather than moving quickly, dumping payroll, and acquiring what prospects they can, they hold out and fight for the best possible return. The rumor season seems to stretch out indefinitely for the Cubs. Interviews are filled with cliches about "impact talent" and improving their core. If the Cubs always intended to go over their IFA budget this year, than the trades of July 2nd signal a stark departure from that philosophy. Rather than waiting and maximizing their return in terms of prospects, they moved quickly with the aim of saving…. pinky to mouth…. $1.5 million dollars*. If the front office is that concerned about about a few million dollars, than all of us in the blogosphere need to reevaluate the team's financial situation. I'm betting against that, though. I think they will try to get under their cap until it becomes clear that they cannot.
*Assuming 100% overage tax of $963k in net slot money returns as well as approximately $500k payroll savings from the Carlos Marmol trade.
Comments
Bretts argument in the link you have above is that the trades for the extra IFA money is in the “why not?” category, as I read it. Suppose his-boy Eloy gets eaten by Astro. Then they still have $$ for the Asian guys and stay under their cap. At that rate, they can just do the same thing next year. If Eloy signs then they blow through the cap and don’t look back after the too-young-to-sign-for-a-few-more-weeks Asian prospects are eligible. And they sell off their $4 million or whatever in cap space next year. If you can buy Torreyes for $800,000, you could probably do some interesting things with $4,000,000.
On the Feldman trade, the added cap money isn’t what they were going for, but it might be like the non-roster rookie-ball throw-in a team can sometimes get. “OK, we’ll take Arrieta and Strop, if you include some cap money.” To me, Arrieta and Strop are a decent return for Feldman, the cap money is the “fight for the best possible return.” It’s just that since this is the first time we have this system, it isn’t necessarily recognized as such.
SVBQuote Reply
I should say that I don’t have any idea what’s up. I’ve never followed the IFA market before, but it’s more fun than the currently over-achieving but still pretty bad ML team. You could absolutely be correct GW, but at least Brett’s suggestion hints at a long term plan that also maximizes the Cubs apparent best asset right now: $$$$
Hope
SVBQuote Reply
@ SVB:
So it’s just a coincidence that the feldman trade happened on July 2nd? Even though the torreyes deal happened a few hours later? I think not. Slot overage was a priority.
GWQuote Reply
SVB wrote:
it does the opposite of this. It saves money now.
GWQuote Reply
add in the fact that the two prospects mentioned, encarnacion and molina, have been previously connected to the phils and yanks, and not at all with the Cubs, I think the leverage theory just fits better
GWQuote Reply
I don’t see the Cubs punting on any IFA as long as Thoyer is here. They’ll be active next year even if they’re limited. You don’t build a brand new Dominican home for the Cubs to punt a year later.
dmick89Quote Reply
I check the score and tell my 6-yr-old, “The Cubs are only behind 1-0 in the 8th.”
She says, “They’re going to lose, Daddy.”
I thought there was optimism in youth?!
SVBQuote Reply
@ SVB:
guerrier fitting in well
GWQuote Reply
Kaplan must be pissed that someone else is carrying water for the Cubs (dying laughing).
BerseliusQuote Reply
GW wrote:
For what it’s worth, pitchers tend to throw more fastballs when they’re behind in the count, not ahead.
BerseliusQuote Reply
@ Berselius:
true, and you guys are probably right about his fastball problems in general… there haven’t seemed to be as many wgn games this year, so i haven’t paid enough attention.
GWQuote Reply
Good article, GW.
How long do the Cubs have to add that space?
dmick89Quote Reply
I know Whittenmeyer mentioned that it may be Garza’s last start. Then again, that’s what these guys say after every start in July.
dmick89Quote Reply
@ dmick89:
up until they max out their existing pool space. i’m sure eloy is anxious to sign, but if he is indeed committed, no harm in asking him to wait a while.
GWQuote Reply
@ GW:
I don’t know if it’s right or not. He’s seeing a bunch more fastballs. To me, that’s about all that stands out. It seems to me he’s not hitting the ball as hard this year, but that would be expected when you’re this bad.
dmick89Quote Reply
@ GW:
I’d have a very hard time being that trusting. I know it happens, though.
dmick89Quote Reply
@ dmick89:
yeah. if i had to guess, they asked him to wait until the end of the week
GWQuote Reply
@ GW:
No, I don’t think it was a coincidence. I think it was a hedge. If they can’t sign the high profile guys, they don’t pay the tax and then they can try again next year if the rules are the same. They save money in the short run in case the overall strategy doesn’t work, but they position themselves to be able to spend a lot, both this year on IFA and next year on buying prospects with IFA cap money.
SVBQuote Reply
@ GW:
Do you think the Cubs could have gotten more for Feldman? I don’t. I think it’s a pretty good trade and fair on both ends. What was Feldman’s preseason projection? 1.5 WAR? If that is accurate, he’s already provided 1.0 WAR and there’s not much more to gain. Possibly he could be transformed and be a 3.5 WAR guy, but who would really believe that? Could be just as likely he just hit a hot streak in a SSS. Maybe the slot money came from Clevenger anyway. Maybe the Cubs could have gotten a grade C player in low A ball instead, but the slot money probably has more upside.
SVBQuote Reply
By the way, I’m not trying to imply that I’m right about what the Cubs are doing (or that Brett is), it just seems like a possible alternative to me.
SVBQuote Reply
@ SVB:
What makes you think that’s what they’ll do? They have a limited amount of money and they will not come away with any impact talent. Theo and Jed have both said this game is about impact talent. They’ve said this several times. The Cubs must acquire young impact talent to contend. According to the guys calling the shots.
Who is going to sell young impact talent for a few million dollars? Would you be happy if the Cubs sold Javier Baez, Albert Almora, Jorge Soler or any other of the elite prospects to some team for a few million bucks? Is there any team in baseball that would do it.
If the Cubs goal was to add a few middling prospects that they thought would help them become champions, then I could see it. Otherwise it doesn’t make a whole lot of sense.
If the Cubs were contending, they could probably trade Javier Baez, straight up, for an above average MLB player worth about $15 million per year. Maybe even more than that. The Cubs will have less than $4 million in slot money next year unless they are considerably worse the rest of the season. Even then, they’ll still have nowhere near enough to add impact talent.
Second, the Cubs are building a brand new state of the art facility in the Dominican Republic. This is to lure talent to play for the Cubs.
dmick89Quote Reply
@ SVB:
what has this front office done that makes you think they are overly concerned with their budget? because this is the first thing i can think of. and it’s a pretty odd time for this to come up.
i’m thinking that I’m missing your point here, skip. are you saying they are hedging against eloy not signing? because i completely disagree with that. these things tend to be worked out well in advance.
if they wanted to buy all those IFAs, there was absolutely no need to trade for overage space. all they had to do was sign them. the only reason to trade for overage space is to save money on the luxury tax. maybe all of the sudden there is a budget crunch, but I think the better bet is that they tried, and are still trying to get under their limit so that they are unrestricted in spending again next year.
GWQuote Reply
i don’t think ben badler has missed on a single one of his predictions yet. that’s not a coincidence. these agreements are worked out well ahead of time in most cases.
GWQuote Reply
GW wrote:
There was also no reason to trade away some of their overage space. I can accept that the Cubs would prefer spending big money on IFAs at the expense of losing Ronald Torreyes. It’s not a huge loss. I still wouldn’t have done it, but I also highly doubt the Cubs would have if they just intended to spend whatever and face the consequences. They’d be a better farm system with these IFAs and Torreyes.
dmick89Quote Reply
SVB, you should go back and read some of the articles when the Cubs announced their new Dominican facility in 2012. The quotes from Ricketts, some of the players, coaches, scouts and front office really leave no question about what the Cubs plan to do with the IFA. Spend as much as possible every single year. Ricketts even said that you cannot win without a large presence in Latin America. Theo said how far ahead the Cubs were of all other teams in the Dominican with this facility and that, we know, is something they will take advantage of.
dmick89Quote Reply
GW wrote:
Me too. But I live in a world that pokes at alternative possibilities….
dmick89 wrote:
I agree with this too.
I guess I did a bad job explaining my point before. I don’t think the Cubs care about the tax. If they do, then Zell really did screw them hard. Maybe that’s why Brother Ricketts can’t say anything coherent anymore. I think it is more about the bonus limit penalty that comes with overspending your cap. So if you believe the Twitter rumors about the Cubs making plays in Asia in addition to Eloy, (did these come from Badler?) then the Cubs are going to be way over their cap no matter what and they better have another strategy for next year. If the Asia rumors are true, then one or more of the following should also be true:
1. Cubs think this year’s IFA class is so much better than next year’s that they wouldn’t >$250,000 on anyone next year anyway (total BS, right?)
2. Cubs think there is enough rough impact talent that is underappreciated in other systems (I guess like Sandberg was) that they can buy some really good guys at the A/AA level next year for IFA cash.*
3. Cubs have something more complicated in mind, like: Trade a bunch of cap money next year to team X for Torreyes-like player, Team X doesn’t have a big stake in Latin America. Team X signs guys the Cubs like. Cubs then trade Jae-hoon Ha and Bijan Rademacher for the IFA guys Team X signed. Team X gains guys with higher floors and lower ceilings. Cubs get guys whose floor is Never Leaves the DR, but whose ceiling may be Yu Darvish. I think IFA signees are tradable now, right?
*This requires Thoyer to have better evaluation and development systems than others. Maybe they do for evaluation. I don’t see it for development. Also doesn’t square well with the development of the DR facility.
Occam’s razor says the Cubs are just trying to stay under the cap to maintain the ability to give big bonuses next year. Twitter says the Cubs are players in Asia too on these apparently great guys that turn 16 in a few weeks, which suggests the Cubs still need much more cap space. They don’t seem to square.
Ugh, the previous paragraph. I think I’ve been hijacked by Twitter rumors. I should STFU. Probably the Hope Monster clouded my judgment.
SVBQuote Reply
I guess it really comes down to this: *If* Crazy Uncle Phil and others are right about the Cubs blowing through their cap, then:
1. Why trade for more cap space (Answer: to hedge your bet in case Eloy OR Asian guys don’t sign so you don’t go over.)
2. What will you do next year with a $250k bonus limit? (The only obvious option I see is to buy a bunch of Torreyeses.)
SVBQuote Reply
@ SVB:
ah… ok. sorry, i wasn’t getting it.
If by the Asian guys you mean Tseng, then I don’t think a hedge was necessary. Had they not made any deals involving space, at this point they would have $1.17 million left, which i think should be enough for him.
GWQuote Reply
On Tseng, the Cubs were mentioned by Badler before the signing period started, but not in his typical “team x has been connected to…” it was more like, “well, the Cubs need pitching, but probably won’t have the space for him.” The Twins and Indians were mentioned as teams that are most active in Taiwan.
In the latest twitter rumors (which I know you are following closely), Jesse Sanchez has said that the Twins are talking to him.
GWQuote Reply
@ dmick89:
yeah, the Marmol trade is the biggest point in favor of “2” above. I’m still sticking with: they thought they had enough space coming from elsewhere in another deal and liked Guerrier, but it hasn’t happened yet. Because the alternative (“They just really needed that $300k”) is still a bridge too far for me.
GWQuote Reply
SVB wrote:
I still disagree with this. I really don’t think there is any way in which the Cubs take the $4 millionish they’ll have in the IFA and spend it on guys like Torreyes. Remember, they’ve said this game is about impact talent and you’re not going to get that by buying guys like that. They will take their money and instead of signing a few guys like they did this year, they’ll go the more typical route and sign a bunch of guys.
If the Cubs FO does what you’re suggesting next year, they should probably be fired and security should grab them by their ears and lead them out.
When you first mentioned this I thought it might be interesting, but by the time I finished that sentence I realized it can’t work. They can’t buy impact talent this way.
dmick89Quote Reply
GW wrote:
Agreed. So do the Cubs go ahead and sign Jimenez even if they don’t free up the space? Would they be better off investing it elsewhere (other Latin American or Asian players)? I’d lean toward investing elsewhere. I really don’t like the idea of the Cubs being unable to sign someone next year for half a million or $250K. That and it’s probably hard justifying going that much over on the IFA market.
I really don’t know why they’d like a 34 year old reliever who has only a few good seasons and a few other serviceable ones.
dmick89Quote Reply
dmick89 wrote:
yeah, you forgot “coming off elbow problems and has diminished velocity.” (dying laughing)
GWQuote Reply
dmick89 wrote:
That’s the way I would bet. I think the deal is all but signed. And to be honest, I don’t know that they have any place else to spend the money. I don’t think they are pursuing anyone else.
GWQuote Reply
dmick89 wrote:
Because his name isn’t Carlos Marmol, and even if they personally liked Marmol, sometimes you need to start over elsewhere. Why not take a flyer on Guerrier? Camp’s days were limited anyway, and the I-Cubs weren’t going to contribute.
SVBQuote Reply
dmick89 wrote:
I don’t like it either, but I could see them going that route if they really like Jimenez.
GWQuote Reply
@ SVB:
Guerrier had also been DFA’ed, so unless someone else liked him they could have just waited.
GWQuote Reply
Why not Guerrier? 34. Elbow problems. Not any good. At all. Free agent after this year.
I understand you take what you can get and that’s what this trade was. It doesn’t stop making it a poor or, at best, questionable trade.
dmick89Quote Reply
I should also mention that a few years ago there was a fangraphs article which argued for pursuing mid-level IFAs rather than the top-level guys. I think it was based on some bad assumptions, but I’m a little surprised it hasn’t been brought up yet.
GWQuote Reply
dmick89 wrote:
Well that probably makes the most sense. Maybe even more than spending 2.x mil on Eloy. At 16, with good facilities and coaching, it seems to me there are lots of guys there that are still way under the radar, especially in Latin America. I’d think you could sign 40 guys next year at 100,000 each and have as much success as they’ll get from the 6 or so they sign this year.
How many 10th graders are on the top 100 prospects lists already in the States? And how many of those that are will still be there in 2 years? And in 2 years, how many of the names among top-prospect seniors will be names that no one knows today? I really don’t follow this, maybe GW does. My guess at answers are: 4 of 100; about half of them because to be on the list they really have to be outstanding otherwise they wouldn’t be on the list at 15 now (so 2); 65.
SVBQuote Reply
@ GW:
I didn’t know fangraphs existed a few years ago, or baseball reference. (dying laughing)
SVBQuote Reply
@ GW:
Yeah, my guess is they’ve gone too far to not sign him at this point. If they don’t acquire extra space it will be, as you said, a miscalculation by the FO. Can’t get too upset about it. This stuff happens, but it would have been better if it didn’t.
dmick89Quote Reply
@ GW:
I don’t know how you could go about proving it since it’s only been the last few years in which we’ve had really good information on signing bonuses in Latin America. That said, it makes sense to me and there are a few teams who go that route.
dmick89Quote Reply
@ GW:
@ dmick89:
Agreed on both, which of course begs the question “why?”
Maybe the Cubs were doing a solid for Marmol. Marmol and Guerrier both DFA’d. Cubs get Marmol to the Dodgers, which could be a good situation for him, instead of to some other backwater team, like Seattle. Dodgers have to pick up the league minimum salary right? So they cover that with the slot money. In return, Cubs get something that is as useful as Shawn Camp, maybe moreso, since it helped eliminate Camp from the roster.
SVBQuote Reply
SVB wrote:
I don’t think any by the major sources. I’m fairly certain Baseball America limits it to those who are eligible to play in the US. These 16 year olds in LA can’t come here until they’re 18.
I’d have to check for sure.
dmick89Quote Reply
GW, do you remember the author of that article? I’m trying to search for it on google, but they have a billion articles each day so it will be difficult to find.
dmick89Quote Reply
Have any of you considered that MLB installed this IFA system just to troll the statfags?
RynoQuote Reply
SVB wrote:
With all this fine analysis I’m providing on motivations of Cubs execs, I should just be a psychologist. I have a Ph.D. Do I need something more than that? If it doesn’t work out well, all I need is a friend with a talk show who can have me on sometimes to tell people what they need to do to straighten out their lives. Maybe I can get my start on the Friday Cubs Talk podcast. Then I can move on to having my own TV show, etc. etc. I’m pretty sure that’s worked before…
(dying laughing) (dying laughing)
SVBQuote Reply
Ryno wrote:
The ones in cyberspace, or the ones that work in Theo’s basement?
SVBQuote Reply
I think a fair point that we all need to remember is that Phil Rogers is known as Crazy Uncle Phil for a reason. I maybe should have emphasized that further with my original post as he could very well be completely full of shit.
Aisle424Quote Reply
@ Aisle424:
yeah, like put in the title or something next time.
SVBQuote Reply
@ dmick89:
i’ll see if i can find it
EDIT: can’t seem to.
GWQuote Reply
@ Aisle424:
What he said would make sense if the Cubs have learned since the signing period ended that they will be going over by quite a bit. If that happens, just spend and spend and spend.
If they go over and have a penalty, they should just go way the fuck over. If they end up at like 6% over, WTF?
dmick89Quote Reply
OK, now, let’s just hold a minute before we go too crazy…dmick89 wrote:
Aren’t we stepping a little too close to unleashing the forces of the Zombipocalypse? They are triggered by finding some state-space where the above quote is said in earnest…
It’s already taken me down, separating me from my well-reasoned responses to Twitter. Save yourselves….
SVBQuote Reply
@ SVB:
The ones that get fired for thinking about horses.
RynoQuote Reply
I apologize about no JOT and no warning, but it was the 4th of July and I was traveling/partying. I don’t have my normal setup today, either (two screens), so I’m doing one now but it’ll be abbreviated, most likely.
MylesQuote Reply
from gleyber’s presser
GWQuote Reply
New Shit
MylesQuote Reply