Maintaining Financial Flexibility: 2017 Vintage – Part One

The Chicago Cubs spent a tremendous amount of money last offseason, as they correctly identified the beginning of an open window of contention their young, cost-controlled players gave them. I argued that even the larger contracts that the Cubs signed (namely Jason Heyward, John Lackey and Ben Zobrist) all angled towards keeping the Cubs’ longterm financial flexibility intact, despite eye-popping dollar figures. Heyward’s contract strategically built in opt-out clauses that could capture his prime years without paying for years beyond his prime, should he opt out. Zobrist’s contract was front loaded, in an effort to keep his cost down as he aged, and as the team would need to focus on building the starting pitching staff through free agency. Lackey’s contract was only for two seasons, filling the fourth starter void to perfection. Granted, Heyward’s first year as a Cub went as poorly as it possibly could have, but he still has plenty of time to reclaim the value of his contract.

Fast-forward 12 months and the Cubs have won the World Series and the free agent landscape looks markedly different. Not only was the pool of free agents much less enticing, but the Cubs’ needs were fewer and the sense of urgency has clearly changed. There still exists an obvious need for controllable starting pitching, but this wasn’t the free agent class to pursue in that regard. Keeping flexibility in mind and an eye on the free agent class of 2018, let’s break down each of the Cubs’ acquisitions this offseason to see if they are still thinking the same way we are:

Free agent acquisitions:

Koji Uehara

Term: One year

Average Annual Value: $6 million

Total Value: $6 million

Yearly Breakdown: Year One: $6 million

The first signing of note is the nearly 42-year-old Koji Uehara, a curious addition to an already right-handed heavy bullpen. However, Uehara is the classic example of a reverse-split pitcher, as he retires lefties with far greater efficiency than righties. This makes him a creative addition to fill the need of a solid lefty reliever, giving the Cubs more flexibility with how to use Mike Montgomery (and also Brett Anderson, who we’ll get to in a minute) should they need to move him around. Seeing as Uehara is almost as old as Albert Almora and Javy Baez combined, a one year pact made perfect sense. We’ll see if Uehara has enough left to justify adding him to the mix, but this is likely a one-and-done situation, meaning it completely maximizes financial flexibility moving forward.

Jon Jay

Term: One year

Average Annual Value: $8 million

Total Value: $8 million

Yearly Breakdown: Year One: $8 million

If you looked up “flashy” in Webster’s, and then scrolled down to the antonyms section, you might just find Jon Jay’s picture grinning back at you. At one time, you could probably argue that Jay had a knack for getting on base despite having limited power, bu those days are mostly gone now, and you’d have to think the Cubs would be thrilled if he could finish within 10 or so points of his career OBP. This is purely a platoon play for the Cubs, as you’ll see Jay spell Almora plenty against solid righties.

$8 million seems like a lot for Jay’s current skill set, but the Cubs’ brass must have felt that his position and limited term availability was a nice enough fit to jump on. Once again, it’s fairly hard to argue with their logic. Just don’t get too attached to the affable lefty, as this is probably a one-and-done scenario as well, as the job is Almora’s long term.

Brian Duensing

Term: One year

Average Annual Value: $2 million

Total Value: $2 million

Yearly Breakdown: Year One: $2 million

Sensing a theme here? In Brian Duensing, the Cubs made yet another one year pact, grabbing the LOOGY for $2 million. Duensing isn’t a great option against righties at this point in his career, but his only job will be to get one tough lefty out per appearance. As with Uehara, the odds of him being in Chicago beyond 2017 aren’t great. Another signing, another contract with an eye on winning today without sacrificing the future.

Brett Anderson

Term: One Year

Average Annual Value: $3.5 million

Total Value: $3.5 million-$10 million

Yearly Breakdown: Year One: $3.5 million guaranteed, games started incentives which could reach as high as $10 million

This is the only contract signed with any sort of intrigue or complexity, as the oft-injured Brett Anderson comes with the following incentive package:

Brett Anderson: 3.5M plus 500K for 11 games, 750K for 14 and 17, 1M for 20, 23 and 26, 1.5M for 29 games. 10M max #cubs

— Jon Heyman (@JonHeyman) January 26, 2017

This is basically the Cubs saying “hey, we know you’re talented, but we only want to pay you if you’re on the field.” It’s hard to blame them, as Anderson only pitched in four games last year and the results weren’t pretty. At his best, he keeps the ball down and induces a plethora of grounders—a perfect skill-set to pair with the Javier Baez/Addison Russell/Kris Bryant infield group. At the end of the day, the best scenario is if Anderson pitches great, maxes out his $10 million and is then worthy of a qualifying offer next offseason. The Cubs could walk away with flexibility intact, and a draft pick for their troubles.

So, that’s it—four major-league signings, four one year deals. The Cubs also signed Jim Henderson, Munenori Kawasaki, Fernando Rodriguez and Jemile Weeks to minor-league deals, but each of those are one year deals as well.

Final Thoughts:

In last year’s piece, I wrote the following:

“What Epstein chose to do instead was diversify and retain flexibility by separating the window of contention squarely into two parts: the first part being a roughly three-year window with Arrieta, Lester, Heyward, Zobrist, Lackey, and Miguel Montero as the main supplemental pieces to the young core. The second window will center around acquisitions coming from the vaunted 2018 class, which means largely hop-scotching over the weaker 2016 and 2017 free-agent classes. The core of Kris Bryant, Addison Russell, Anthony Rizzo, and Kyle Schwarber has an expiration date, and surrounding them with the right pieces is critical to maximizing opportunities to navigate the murky world of playoff baseball. This offseason has gone to great lengths in ensuring the ability for that to happen for six full seasons. From where we sit today, demarcating two specific contention windows is a brilliant strategy, and essentially the exact opposite of what the Yankees did two years ago.”

This appears to be the exact direction they are still headed, and winning the World Series likely did nothing but cement that plan into place. The core is intact, financial windfalls are flowing, and the future is exceedingly bright. My next piece will bring you a breakdown of exactly what the Cubs’ financial situation looks like compared to their NL Central foes.

Lead photo courtesy Tommy Gilligan—USA Today Sports