Now what? Jon Lester’s Contract and its Effects on Cubs Payroll

I can’t help but think about Mashiro Tanaka at this time. The contract the Cubs offered him last year was 6 years, $120 million, which is significantly less than their offer to Jon Lester of 6 years, $135 million. Added to that total for the Cubs’ new ace was a $20 million signing bonus, which just happens to be the same amount the Cubs would have paid on Tanaka in the form of a posting fee.

It is interesting to note that the Cubs would go for a higher AAV on the same length of contract that was offered to the younger, unproven guy (who now comes with an injury risk). The Cubs decided to add a player past the injury nexus and who has averaged 207 innings and 32 starts over the past six years ,and were willing to pay $15 million more for it.

The ripple effect of the Tanaka move aside, the Cubs’ budget is a fascinating subject. First, the question of how the signing bonus is calculated will be interesting. The obvious connection to the Tanaka posting fee suggests that money might be coming from a separate pile as it were. There were whispers at the time that the changing of the NPB posting system indicated that one-time bonuses like this were outside the spending restrictions of the debt load agreement.

For the purposes of this exercise we are going to exclude those figures. If we take out just the $20 million bonus and figure that the deal is roughly even, it means that Lester would cost $22.5 million next year and $24.5 million in each subsequent year. Now, of course, most deals are back-loaded, so the actual hit on the 2015 budget might be smaller.

We know, or at least think we know, the costs of Jason Hammel ($9 million next year) and Miguel Montero ($12 million).  That would put the Cubs at $43.5 million in additional payroll for next season already. According to Baseball-Reference, the Cubs had a projected payroll of an estimated $62.74 million for next year.

These additions would push the Cubs’ payroll to 2013 spending levels with a $108.74 million price tag. To be fair, the b-ref figures overestimate some of the Cubs commitments; Edwin Jackson’s signing bonus, for instance, is not figured into his ’15 salary. Jorge Soler and Gerardo Concepcion both had their salaries figured higher than actual due to similar misapplication of signing bonuses. That said, the Cubs’ salary is probably closer to $104 million dollars.

That would likely put them in a position where the only additions at this point might be value guys, veteran bench players like Jonny Gomes and David Ross. The salary impact of those players should be neutral, as the Cubs would look to move pieces with similar value in Justin Ruggiano ($2.5 million arbitration estimate) and Welington Castillo ($2.1 million arbitration estimate), thus freeing up the necessary cash to add those veteran bench pieces.

The Cubs also appear to be in on lefty Craig Breslow and maybe a buy-low flyer on the starting pitcher market. They reportedly offered Justin Masterson $6 million, which would suggest that the Cubs payroll could push $110 million next year without factoring in the signing bonus. However, Travis Wood’s expected $5 million price tag could also be mitigating that cost and the real payroll figure will likely check in at 2012 levels of just below $110 million.

These basic figures paint a pretty bleak picture for adding a mega-bat in trade. Carlos Gonzalez is a reasonable trade target, especially with the Rockies looking to upgrade behind the plate defensively. Pitch framing aside, Castillo would provide a major upgrade over Wilin Rosario’s all-bat approach.

The focus on young players being involved over top prospects is certainly a trend you can see the Cubs hoping to take advantage of, with redundant arbitration-eligible pieces in Luis Valbuena, Justin Ruggiano, Welington Castillo, and Travis Wood. However, CarGo’s $16 million salary would blow the Cubs back up to 2008 levels, and that seems more like wishful thinking at this point. And to be sure, despite the contract and injury risk, a trade for Gonzalez would require parting with major talent in return.

Evan Longoria’s contract would make a lot more sense, but even if Tampa would consider moving him it would cost significant chunk of the future. It would move Kris Bryant into the outfield and add the much-needed on-field lieutenant Joe Maddon dreams of as an everyday presence. But this feels much more the stuff of fantasy GM-ing than reality. Then again, adding Jon Lester seemed almost as fanciful at one point.

At the end of the day, I think the Cubs will be right around $110 million on Opening Day — scratch that, Night — 2015. That would seem to contradict them being the mystery 4/$65 million offer for Chase Headley, as even selling off all the replacement parts and counting on kids to step into bench roles would net them only an extra $13.2 million in spending money.

The offseason would then be complete, with the Cubs hoping to fill in roster gaps with lower-level prospects like Logan Watkins, Matt Szczur, and the like. The budget currently points to the Cubs making moves on the periphery of the roster to add to the elusive clubhouse chemistry and leadership void acknowledged by everyone on the North Side. It won’t be sexy, but does it really have to be after the additions of the Winter Meetings?