NEWSLETTER
The primary reason the 2024 Chicago Cubs might look to sell at the July 30 MLB trade deadline? Their record.
Last night, the Cubs (37-43) fell to a season-low six games under .500 and a season-high 10.0 games out of first place. In the entire National League, only the Marlins (28-51) and Rockies (27-52) have worse records than the Cubs, whose playoff odds fell from 41.3% preseason to just 12% today. Bad teams don’t buy at the Trade Deadline. If anything, they sell. The Cubs may very well be a bad team come late-July.
But there’s another reason the Cubs might sell. A tiebreaker, at least: Money! Er, well, future money.
According to Roster Resource, the Cubs estimated luxury tax payroll for 2024 currently sits just a hair under $234 million. Cot’s Contracts has it at $232M. Spotrac has it at $235M. These are estimates with sometimes fuzzy inputs, so that’s why there are discrepancies. But they’re close.
In any case, the Cubs’ current luxury tax payroll is roughly in the range of $2-$4M beneath the first tier of luxury tax threshold ($237M) – and that gap could shrink further (or even exceed the limit) depending on bonuses and buyouts and call-ups and so on that happen throughout and after the season. So generally speaking, it’s safe to assume the Cubs are *very* close to the first tier of the luxury tax. A single, even affordable addition at the deadline could push them over, and they might be right up against it even if they don’t add anybody.
Now you might be wondering why that really matters – after all, going over the lowest tier of the luxury tax the first time costs a club just 20% on only the overage. So if the Cubs went over by $1M it would only cost them an extra $200K. Not the end of the world when you’re otherwise spending $238M. However, the penalties stack. And if you’re over the lowest tier two years in a row, exceeding the threshold costs 30% (even if you were only barely over the year before). If you do it three years in a row, it costs 50%. And that’s only on the lowest tier. If the Cubs spent $20M or more over, it would be even higher. (Moreover, there are some baseball-related penalties tied to the draft, international free agency, and free agency that do factor into the calculus, too, though those do not stack.)
In other words, if the Cubs have ANY intention to go over the luxury tax next year, then going over by just a hair right now – to add to this team, if they’re still playing like this – would be pretty silly.
Now, we can debate whether the Cubs actually have any intention of going over the luxury tax next season. And frankly, it seems more likely that they will not. Not only has the bottom tier of the luxury tax been floated as a sort of soft ceiling for this organization (sigh), but the Cubs also have a good amount of money coming off the books as is.
Even without knowing what’s going to happen with Cody Bellinger ($27.5M player option) or Hector Neris ($9M club option that could turn into a player option with 31 more appearances), the Cubs will shed salary from at least Kyle Hendricks ($16M), Trey Mancini ($7M), Yan Gomes ($6M), Tucker Barnhart ($3.25M), Drew Smyly ($9.5M), and David Bote ($3M). Plus, there could be some significant savings from various non-tender candidates. Needless to say, they might be able to spend a lot and still remain under the first tier of the luxury tax (which also increases to $241M next year).
So maybe the Cubs (and the budget office) would decide not to go over the luxury tax next year anyway. Conceded.
But if there’s a chance they would, then this year’s luxury tax is going to be at least some small part of the decisions made during trade season.
Again, their record and chances of the postseason should drive the decision of whether they buy, hold, or sell, but you can count their proximity to the luxury tax as a tiebreaking factor if it were to get close.
Brett Taylor contributed to this post.
