Jed Hoyer was on the sportscasts late last week after the trade deadline. He continued to mutter the mantra that "hopefully" the Cubs won't be sellers next year; that "hopefully" their top prospects will be reaching the majors soon; and "hopefully" things will fall into place so they can go out and get pitching a few years afterward.
Hope does not float a boat.
The trade of two major leaguers, Russell and Bonifacio, for a Class A catcher and CASH makes sense only if you believe David Kaplan's statement that the Cubs are tied by their loan covenants to only have a payroll of 110 percent of attendance revenue. The trade was a salary dump and a cash infusion for the Cubs. However, other reports indicate it was the Cubs who gave Atlanta a million dollars to "get the prospect they wanted." (If so, the move would be double the amount owed Russell and Bonifacio for the rest of the season, so the Braves get two major leaguers for free (?) What kind of deal is that for the Cubs?). Putting the moves for the past several seasons, and salary dumps together, there is more circumstantial evidence that the Cubs do not have the fiscal pieces to make any significant changes to the ball club. One caveat to this analysis is that the Cubs sported a $144 million payroll at peak attendance; but now payroll has been slashed in half (but attendance has not). If the lenders are pressing loan covenants on the team, that means the bankers are not comfortable with their loan risk, even if the club is current in its payments.
Cubs peak attendance was around 3.2 million fans. Current projects show this season to be close to 2.4 million. That is a 25 percent drop under Ricketts ownership. Using the Cubs own internal revenue number per fan attending games, the Cubs lose $56 million in revenue this year from the peak years.
But still, at 2.4 million fans at an average face ticket price of $35 million, the payroll budget would still be around $92 million, and not at its current $75 million level. The "savings" has to go somewhere - - - to debt service or to the ever-changing Wrigley renovation plans.
There is also conflicting information on the broadcast fees. The Tribune has reported that the old WGN-TV deal paid the Cubs $250,000 per game while Comcast pays $500,000 per game. Earlier reports had Comcast only paying $350,000 per game. Even if the Cubs wanted to raise the rights fees $100,000 a WGN contest, that is only maybe another $5 million per season. With all the additional signage in Wrigley, advertising executives speculate that it will only bring in perhaps $10 to $14 million in new revenue. So basically, the Cubs cannot make up lost attendance revenue from new broadcast fees or additional Wrigley advertising.
And it appears despite all the "hope" messages, the financial situation is not going to change. The real problem is that people will not commit to a season of premium major league prices for minor league talent. The Cubs front office is positioning itself to have the playing field occupied by players at the major league minimum salary levels in half of those positions (LF, CF, 3B, 2B). A team dominated by rookie minimum salary prospects is the definition of a struggling small market team.
If we assume that the debt and ownership structure prevents the Cubs from operating like a real baseball team, then Ricketts is solely blame for accepting those terms. It also shows that if the payroll is so fixed that the team cannot truly make deals to bring in high quality players like David Price because their salaries breach a loan agreement, then the franchise is in quicksand.
Tampa Bay gave away Price to the Tigers.
The Tigers acquired David Price from the Rays by trading Tigers center fielder Austin Jackson to the Mariners, with Nick Franklin (from Seattle) and Drew Smyly (from Detroit) heading to Tampa. Minor league shortstop Willy Adames is also going to Tampa from Detroit in the deal
MLBTR notes that the move brings and end to near-ceaseless speculation regarding the
now-former Rays lefty, who has been one of the game’s best pitchers in
recent seasons. Still only 28, Price is under control for one more
season through arbitration, though he will certainly not come cheap.
Playing this year on a $14 million salary, Price will be in line for a big
raise next year. Of course, one key element of his value lies in the
fact that his new club will have an opportunity to explore an extension.
The reason that Price figures to draw a big salary next year is
obvious: he has continued to be outstanding. At present, he owns a 3.11
ERA with a remarkable 10.0 K/9 against just 1.2 BB/9 over 170 2/3
innings.
The return for the Rays is not particularly splashy, but delivers
obvious value. Smyly, 25, was outstanding last year as a reliever and
has since converted into a solid starting option. He carries a 3.77 ERA
through 100 1/3 innings, with 7.8 K/9 and 2.8 BB/9 and a 36.9%
ground ball rate. While his strikeout numbers are down since moving to
the rotation, he can be controlled through 2018.
The 23-year-old Franklin, meanwhile, seemed without a future in
Seattle after the club added Robinson Cano. Though he has spent time at
both short and second, many observers believe he is better suited for
the keystone going forward. He had a solid 2013 at the MLB level
(.225/.303/.382 in 412 plate appearances), and though his numbers were
off this year in limited action, Franklin has continued to swing a big
stick against Triple-A pitchers.
Then, there is Adames, who could be something of a wild card in the
deal. Just 18, he has a promising .269/.346/.428 slash line through 400
plate appearances at the low-A level this year. He entered the year as
Baseball America’s 30th-ranked Tigers prospect, but appears to be
raising eyebrows around the game.
Seattle managed to address its
center field need without giving up an indispensable prospects of the
future. In fact, the 27-year-old Jackson will be at least a mid-term
piece for Seattle. He is playing on a $6MM salary this year before
hitting arbitration for the final time. He currently sports a
.270/.330/.397 line that is approximately league average (as it was last
year). With solid contributions in the field and on the bases, the Marineres believe he is
certainly an above-average big league starter.
The Rays were still in playoff striking distance when the trade was made, signaling a white flag moment for the team. The Rays could have kept Price and traded him in the off-season. The only upside of the trade for Tampa is that they got three players who they can control and manage salary effectively for the next few years.
But Detroit now has a powerhouse post-season pitching staff, anchored now by the last THREE Cy Young Award Winners. It is a trade like this that moves the fan interest needle to HIGH. Clearly, based on the players moved, the Cubs had enough prospects and bodies to acquire Price from Tampa, but the Cubs (being perpetual sellers) were not even in any reported trade conversation. If the Cubs cannot make blockbuster deals for major league stars now, what is going to change this off-season to make it happen?
