The Brilliant Meaning of July 2, 2013

This is a story about one of the most important days of the Theo Epstein Era in Chicago, and perhaps in Cubs history. It was July 2, 2013, and while that day will always be famous as the day the Cubs stole Jake Arrieta from the Baltimore Orioles, there was more to it than that, and besides, the story of that trade—the way the Cubs set themselves up for it, and why they did so—is both interesting and important. Whenever the Cubs end their World Series drought, even if it’s 10 years from now, that day in July will probably be the one history labels as the biggest turning point.

When the current MLB Collective Bargaining Agreement rolled out in November 2011, it was a blow to the new Chicago Cubs front office. Theo Epstein and company recognized the dearth of talent in-house when they accepted the challenge of turning around the franchise, but the new CBA sharply increased the difficulty of addressing that shortfall. It would no longer be easy to divert resources from the big-league team toward amateur talent acquisition. Instead, the Cubs would have to get creative.

They immediately began doing so. Trades sent away pitchers who would be unable to have a significant impact on the team’s playoff chances before they reached free agency—guys like Carlos Zambrano, Andrew Cashner, and Sean Marshall—and brought back valuable pieces in Anthony Rizzo, Travis Wood, and Ronald Torreyes. Even as they offloaded talent, though, the front office made short-term investments on the free-agent market, most notably in the persons of Paul Maholm and David DeJesus. Maholm would prove to be the first foray into one creative solution to the problems posed by the new CBA: signing players for the primary purpose of trading them.

Let’s pause and enumerate the things that got harder for a rebuilding team when the new CBA was signed.

1. Changes in the free-agent compensation system made it harder for teams to amass extra draft picks, and the introduction of a new competitive-balance lottery distributed extra picks (or chances for them, at least) to all NL Central teams save one—the Cubs.
2. New, harder caps on bonus spending in the Draft made it harder for teams to manipulate the process and get highly talented players in later rounds, or to lure certain players away from firm college commitments.
3. The international free agent market came under serious regulation for the first time. Whereas the only rules and regulations in place previously had been those aimed at preventing identity or age fraud, the new rules put substantial penalties in place for spending more than an allotted pool amount, including the loss of the right to make big expenditures in that market in future years.

That meant that, unlike the Red Sox Epstein ran over most of the decade before his arrival in Chicago, the Cubs would only be able to access top-tier talent through three avenues:

1. Their top few Draft picks—and then only insofar as their record allowed them to draft high enough to select from among the country’s best players.
2. Signing Latin American and other international free agents when their previous year’s record allowed them to carry one of the bigger bonus pools in the league, or (as they and other teams would turn out to favor) in one year, at the expense of opportunities in other years.
3. Trades, prying loose other teams’ prospects by carrying valuable trade assets into the winter and July markets.

Maximizing the first avenue meant losing a lot of games at the big-league level for at least two or three years, so the team wouldn’t be picking over secondary options further down the board, and so that they might be able to spread money not spent on top picks over a few high-ceiling projects in later rounds. Maximizing the second one meant not only hiring an exceptional suite of international scouts, but making full use of the team’s new facility in the Dominican Republic and pouring resources into the endeavor of getting IFA signing periods right. Maximizing the third avenue meant signing players like Maholm and DeJesus, among others, and thinking of the expenditures their salaries represented as substitutes for bonus payments to draftees.

In 2012, the Cubs had relatively little to trade, especially after Matt Garza hurt his elbow in late July. They did spin off Maholm, for Arodys Vizcaino and another relief arm, and they turned Ryan Dempster into Kyle Hendricks and Christian Villanueva, a major coup in hindsight. Geovany Soto also got dealt, though for only a forgettable arm. The team spiraled over the final two months, losing 101 games—but setting themselves up to draft Kris Bryant the following June, and saving money by running a much lower payroll than their resources might have allowed. They spent some of that would-be big-league payroll on Jorge Soler and Gerardo Concepcion, among other last-minute international investments

Over the ensuing winter, the team again added through free agency, this time signing not only one-year trade bait (Scott Feldman) but also a potential piece of the next good Cubs team’s rotation (Edwin Jackson). Still, the gas pedal wasn’t really on the floor. There remained some budget constraints on the front office, both foreseen and unforeseen, and it became clear to the front office that they would need to blend the objectives of acquiring talent and marshaling resources.

That brings us, more or less, to the day in question. When it dawned, the Cubs were 35-45—not entirely non-competitive, but far from playoff contention. They made several moves that day, but since it was the centerpiece, let’s start with the obvious:

Acquired RHPs Jake Arrieta and Pedro Strop, and international bonus slots 3 and 4 from the Baltimore Orioles in exchange for RHP Scott Feldman and C-L Steve Clevenger. [7/2/2013]

You know what Arrieta and Strop have meant to the Cubs’ surge over the last year and a half. It’s worth remembering, though, that in addition to scouts’ doubts that Arrieta would make it as a starter in the big leagues, there were well-founded fears that Strop wouldn’t make it as a big-league pitcher, period. He’d become what Sam Miller called “the opposite” of Carlos Marmol, a hard thrower who couldn’t seem to miss bats but managed to get outs, until he didn’t. On the other hand, Strop was, like Marmol, prone to erratic command and some streaks of unbelievable hittability.

Still, in Strop’s slider and Arrieta’s general promise, there was enough to make the Feldman deal worthwhile. Yet, many people focused on the bonus slots they acquired, which amounted to a bit less than $400,000. Indeed, the Cubs were making as much extra room in their budget for international free agents as possible, and their other trades on July 2 proved it.

Acquired RHP Matt Guerrier from the Los Angeles Dodgers in exchange for RHP Carlos Marmol, cash, and international bonus slot 4. [7/2/2013]

This deal actually sent away a bonus slot, worth more than $200,000, but that was an inducement for the Dodgers, who took on about half of the $4.7 million the Cubs otherwise owed Marmol (whom they had already designated for assignment). As the rest of the day would prove, the Cubs’ maneuvers with the bonus slots weren’t about coming in under a specific number or avoiding penalties, but about minimizing those penalties so as to spend as much in that market as possible under their budget constraints. Saving that much cash after putting a player like Marmol into DFA limbo is a neat trick, one facilitated by the acquisition of the slots the Cubs got in the Arrieta trade.

Acquired international bonus slots 2 and 3 from the Houston Astros in exchange for 2B-R Ronald Torreyes.

Because the Astros, the worst team in baseball in 2012, had the biggest bonus slots in baseball for 2013, the Cubs added nearly $800,000 in this trade. Torreyes had been a throw-in in the deal that netted Travis Wood a year and a half earlier, and now, he was enough to coax the Astros to give up a significant amount in international spending capacity. In total, the Cubs added over $1 million to their bonus pool in these three deals, and even though they blew by even their new, higher spending ceiling, the monetary savings mattered.

Signed SS-R Gleyber Torres, OF-R Eloy Jimenez, RHPs Jefferson Mejia and Erling Moreno.

This is why. This is the group the Cubs were willing to give up a year of chances to spend big in Latin America to get, and the group who made settling for a slightly smaller haul of talent than was theoretically possible when trading Feldman a worthwhile gamble. You can add Jen-Ho Tseng to this list, since the Cubs let DeJesus go on waivers in August, saving $850,000 or so through the end of 2013 and helping clear the way to sign Tseng.

Three years later, Mejia is in the Diamondbacks organization. The Cubs got Miguel Montero for Mejia and Zach Godley in December 2014. Moreno is still promising, but remains in rookie ball, having been set back by injury issues. Torres is a 19-year-old more than holding his own in the Carolina League. Jimenez is one of the best prospects in the Midwest League, and like Torres, won’t turn 20 until after the season ends. Tseng is in Double A, a 21-year-old starter short on projection but high on polish, and sporting a sub-3.00 ERA. This is exactly the home run the franchise decided to try to hit in the summer of 2013. One player has already turned into a key trade chip, and the other four are among the 10 or 12 best candidates to be part of a big deal within the next year.


It’s fair to wonder whether the Ricketts family could have made more money available to Epstein and his cadre during the early days of their rebuild (though the way things have gone since then suggests that they were wise to save up, both for the long-term renovation that’s still just past the halfway point in the journey toward completion, and for free-agent splurges like the one they authorized this past winter). Still, it’s clear that the front office had real financial constraints, however generous they might have been, and the nimble moves they made a little over three years ago proved that they were the right people to navigate those constraints. Under the current CBA rules, it’s hard to imagine a better sequence of decisions over a short span by a large-market team trying to rebuild.

That Arrieta would blossom into one of the game’s five best starting pitchers, even if only for a year or so, was impossible to predict. The Cubs made a wise bet on him, though, and he’s the only player whose performance since that day has so outstripped expectations as to make the front office look lucky, rather than purely smart. The careers of the players the organization acquired that day certainly haven’t played out yet, but it’s not too soon to say that they’ve validated the processes that made them Cubs.

For what it’s worth (and thanks partially to the late July trade of Matt Garza, and the dumping of DeJesus, in addition to the Feldman deal), the Cubs were 31-51 from July 2 onward, plunging them from what would have been the seventh overall pick as of July 1 to the fourth overall. The following June, they used that elevated draft position not only to pick Kyle Schwarber (who might well have been available three picks later), but to grab Carson Sands, Justin Steele, and Dylan Cease in the fourth, fifth, and sixth rounds, using the money they saved by signing Schwarber for less money than the slot allotment for the fourth pick. The difference in slot allotments between the fourth and seventh picks, over the first 10 rounds, is about $1.5 million.

The CBA will change again after this season, although there’s no telling precisely how. For Epstein and company, though, from their time dominating one system in Boston to their expert manipulation of a very different one in Chicago, changes like these have just been new opportunities to get ahead of the curve.

Lead photo courtesy Adam Hunger—USA Today Sports.

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