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Why Cubs Are Waiting To Spend Big

By bullpenbrian at 12.10.2012 6 comments.

Cubs Pie 5

Here’s a visual reminder that it’s not about how much the Cubs spend, but how they spend that’s important.

Only twice in the past 10 years have the Cubs seen an increase in payroll translate to more wins. However, four times they spent more on player salary than the year prior–only to lose more games.

The result of careless spending ultimately limits roster flexibility. It makes it tougher to acquire players and increasingly difficult to trade underperforming ones signed to gaudy contracts.

Doubling down on payroll can open a small window to win a championship, as it did for the Cubs in 2007-08, but we know it’s no guarantee to winning a ring and the long-term effects makes it virtually impossible to maintain any success.

That’s why Theo Epstein is taking a more careful approach with team payroll than his predecessor Jim Hendry. Building the Cubs into a consistent winner, one that reaches the postseason year-after-year, gives the club its best odds of winning a World Series.

To build that model Epstein has to first relieve the pressure of what became a suffocating team payroll and roster gridlock under Hendry. It means making smarter investments, taking fewer risks and practicing more patience until some roster flexibility returns.

Of course building a core player group won’t come on the cheap. Neither will supplementing the core group with the best available free agents. No doubt Tom Ricketts realizes it’s going to take significant dollars to build a championship roster. It’s just important the payroll and roster talent grow together and not apart.

A staple of smart investing is discipline and patience. It’s understanding there’s no penalty for making smarter, smaller moves. But there are, however, severe consequences for losing sight of the long-term goals with greed and impatience.

What better way to sum up the chart above.

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6 Comments

  1. Lou says:

    I like the Theo Epstein model of rebuilding. Yet, all my beliefs are now being questioned by the Dodgers. If the Cubs got Greinke, Hamilton, Youkilis, League, Broxton, Bourn, R. Martin and Ryu don’t you think they would be the favorites in their division?

    An outfield of Soriano, Bourn, and Hamilton, with Dejesus and Schierholtz would be very solid. An infield of Youkilis, Starlin, Barney, and Rizzo, with R. Martin & Castillo behind the plate is very solid with Valbuena and Stewart off the bench.

    With a bullpen of Marmol, League, Broxton, Camp, Fujikawa, and others would be great. With a Starting rotation of Greinke, Baker, Garza, Feldman, Ryu, Jeff S., and Travis Wood would be solid too.

    So why can’t the Cubs buy a championship? Now with NEW TV contracts and new revenues why can’t the Cubs be like the Dodgers? Mainly fear and unwillingness to spend your way out of your mistakes.

    If you sign all of the above and some do not work out, are you willing to get another top guy to replace them? That is the key and that is what the Yankees have done. I am behind Theo, but all of my excitement when Theo was hired is now gone.

    The Dodgers have ruined that enthusiasm as they now are willing to outspend the rest of the NL to win and before it was the Red Sox and Yankees, but the Dodgers have legitimate stars and adding what they are is closing the Cubs window over the next few seasons, basically expiring Theo’s five year contract.

    We know now that 2015 is their target and 2016 ends Theo’s contract, so will he win by then? And if not will they re-sign him? Or will he want to go to the Yankees and replace Cashman by then?

    • bullpenbrian says:

      Hey Lou, thanks for checking in.

      I understand what you’re asking. It’s an interesting thought. But there are 2 things to remember…

      1.) This is real money to Tom Ricketts. Actual dollar bills, cabbage, coin, cash. Not play money, not poker chips…we’re talking millions upon millions of dollars. It’s always easier to spend money, on anything really, when it’s not yours.

      2.) The Dodgers have not won anything except a record payroll for a National League team. Eventually this kind of spending will catch up to them…they’re taking on massive risk despite having the money to spend.

      In theory, yes, a team should be able to gobble up all the best players on the market and win a World Series year, after year, after year, etc. In reality, however, it doesn’t work that way, which is why the ’97 Marlins never lasted and why the Yankees have one ring in the last 12 seasons.

      Things change…especially players who age, become disgruntled, get injured, want traded, want more money…the list goes on. As I talked about on Monday…excessive payroll severely limits roster flexibility…and when a team can’t get addition players, or move certain players, it can’t sustain a winning roster.

      Over spending is not a reliable formula for long-term success…it’s a huge risk to ‘win in the now’. And when the risk doesn’t pay off, the owners bleed through their eyes; these may be wealthy people, but the money is not endless, not easily replaceable. It’s lost, sunken cost, poorly invested with a poor return…which isn’t lost on the business people who acquired this wealth in the first place.

      Ah, but wouldn’t over-spending be worth it for the Cubs…just for one WS ring? Sure, if can you convince Tom Ricketts it’s worth making that gamble? Would you bet the millions you don’t have (I’m assuming!) the Cubs would win? What if they don’t win…should Ricketts keep spending until he’s busted? I wouldn’t think he would want to do so.

      The silver lining to MLB not having a salary cap is the most money spent on team payroll doesn’t assure a championship…it’s the smart money that wins, which you can read more about at this link:

      http://bullpenbrian.com/2012/11/06/2012-mlb-salaries-chicago-cubs/

      I would hope the Dodgers’ spending spree would bring more enthusiasm and more encouragement for Epstein’s method. Theo’s building for the long-term…he’s building to win multiply championships…he’s doing it without blind faith in free agents and he’s doing it in a way Ricketts can afford to keep funding a championship caliber ball club. It’s not as flashy as LA, it takes longer, but it’s no less effective.

      Of course, there’s no guarantee Theo’s way works either. You’re right, he could fail to win a World Series in Chicago. But there’s no question he’ll leave the Cubs better than what he found them–with or without a ring.

      A huge factor in Theo accepting the Cubs offer was the challenge of building the Cubs into not only a winner, but a dynasty. Epstein wants to earn another WS ring…not join the Yankees and Dodgers who are just happy to throw money at guys in the short-term without ever ‘building’ anything. Any GM could do that with moderate success.

      As for where the Dodgers (and Yankees for that matter) will be when Theo’s time is up in Chicago? Most likely digging their way out from under busted, over priced contracts. Maybe they have a WS ring to show for it, maybe not.

      After all, if winning was as easy as the Dodgers are making it seem…there wouldn’t have been only one George Steinbrenner who would risk losing everything just to win. Regardless, trying to buy a championship by simply outspending the competition is a big risk almost any fan would take…as long as it’s not our money being lost.

      Keep the faith, my friend :)

  2. Lou says:

    Of course it is a risk. Yet, what I am talking about is the increased revenues from the national TV contract ($25 mill a year). And the Dodgers were actually purchased by a group anticipating the new TV deal regionally. They bought the team first and then recently they announced their new TV deal locally. So there is a precedent set. There will be a new Cubs deal or the Cubs will get their own network like the Yanks. The dollars are staggering.

    I know these are real dollars, but I looked at their revenues and I did not expect the cubs to outspend what they are bringing in. With the new contract they are bringing in around $200 million. That is with their local TV
    deal as is. The new deal would add around $150 million to the current revenues and that is only half what the Dodgers are getting.

    The deal is that we now are hopeful again and this Dodgers situation puts the Cubs situation at risk. The Yankees have made the playoffs 17 of 18 years and the Dodgers are now going to shoot for that.

    The combination of a great front office, high payroll, and building a strong minor league system looked great, but the new CBA has decreased the Cubs advantage in the draft and in developing the minor leagues. Hoyer and McLoud turned around San Diego in two years under the old rules, with these rules it will take a long time.

    • bullpenbrian says:

      No doubt the Dodgers have a killer TV deal, but again, they haven’t won anything yet. The Yankees, meanwhile, are failing apart piece by piece. New York hardly has the core of minor league players that sparked its long run atop baseball, which came at the cost of trading for elite talent and the laziness of having the luxury to acquiring the best free agents at any cost.

      It’s one way of doing business, but not the only way. Just because the money is there, or will be there presumably, doesn’t mean it’s a good investment.

      Spending ridiculous dollars comes with a price…luxury taxes, etc…it’s hard to sustain that kind of payroll, which is why teams, like the Cubs, don’t do business this way.

      I respectfully disagree the Dodgers’ spending puts the Cubs at risk; the Dodgers are putting the Dodgers at risk…their payroll, their problems…not the other way around.

      There’s no reason in the coming seasons the Cubs can’t field a quality club at an efficient price that beats LA on the field. Eventually the Cubs will add payroll, too…but they’ll in a better position to win and will likely be able to sustain its roster longer than LA. Whereas the Cubs will have built a foundation, the Dodgers will be patching hole after hole with massive contracts. Those television dollars are great, but they don’t go as far when a FA player turns into a bust.

      Sure, it’s going to take Epstein some time to build…the cost of doing business I suppose. But at least we won’t have to rebuild in the foreseeable future, or worry about whether or not the Cubs will be successful year to year.

  3. Dan says:

    I like this team that Theo has put together thus far with the major exception of why have the cubs not been able to move soriano? how about a trade straight up soriano to the brewers for hart?

    • bullpenbrian says:

      Thanks for checking in, Dan. Team Theo has basically done what we’ve expected this offseason…fill holes with stopgap players while staying on the lookout for other team’s undervalued assets.

      Granted most of the moves have been boring, but we’re seeing the club improve inch by inch.

      As for Soriano…good question. Not sure why it’s taking the Cubs so long to move him. With Chicago willing to eat the majority of his 2-yr, $36M contract, he’d be a very good addition to a contender and extremely affordable over the next two seasons at roughly $5M per year. That’s a steal if Soriano is close to matching his production at the plate last year.

      However, hurdles could include Soriano’s 10-5 no-trade rights and the Cubs holding a hard line to get a better prospect in return for Soriano. I don’t necessarily have a problem with the Cubs holding out for the best deal, if, in fact, that’s the case. But my hope is Soriano will be dealt before Opening Day.

      I don’t believe Soriano’s trade value increases if he starts the season with the Cubs…too much risk for injury or a slow start offensively; then what would the Cubs get for him?

      As for a straight-up trade of Soriano for Hart…well, it’s fun to think about but it’s not a match for either side. That said, I’d look at Texas, Philadelphia and Atlanta as potential landing spots for Alfonso.

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