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January 12, 2010

Hot Stove U.

The Cubs' Contractual Cul-de-Sac

by Kevin Goldstein

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When Tom Ricketts purchased the Cubs at the end of the 2009 season, he spoke openly about how important it was for him to bring a title to the North Side of Chicago. That's certainly possible, but previous moves by general manager Jim Hendry have handcuffed the team on a nearly unprecedented level. The contract situation Ricketts inherits is among the worst in baseball history, akin to him assuming somebody else's poker hand and he's all in, needing some help on the river.

Entering 2010, the Cubs have more than $125 million committed to just 11 players, including eight earning more than $10 million. That leaves a team that opened 2009 with a club-record payroll of $137 million almost already there again with 14 contracts still left to fulfill, nine of which could get locked up in the arbitration process. The $125 million figure doesn't lead baseball, as the Yankees and Red Sox surpass it, but what makes situation so uniquely bad is that many of the contracts are for underperforming players, with Hendry' propensity for handing out no-trade clauses like they were lollipops further constraining future personnel decisions, including at the July 31 non-waiver trading deadline should the Cubs contend.

Here's a look at the eight big deals that are weighing down the Cubs, courtesy of our own Jeff Euston of Cot's Contracts fame:

1. Alfonso Soriano, LF*
2010 salary: $18 million
Further commitment: $72 million for 2011-14

Coming off his worst season, Soriano actually gets a raise in 2010, with a good chance to be the team's highest-paid player for the next five years. While Soriano has not been awful overall, he has hit .275/.328/.508 for the Cubs. As a point of reference, the Marlins' Cody Ross has been an exact match (.276/.333/.503) over the same stretch. Soriano still certainly has the ability to be a good player, but nobody would give him a deal anywhere close to five years and $90 million at this point.

2. Carlos Zambrano, RHP*
2010 salary: $17.875 million
Further commitment: $35.875 million for 2011-12 with a vesting option for 2013 that will be difficult to reach.

Zambrano is paid like an ace, but hasn't pitched like one for the past two years, as he is usually beset by minor dings here and there, with the annual emotional blowup now becoming downright predictable. Like Soriano, he is good, but that doesn't mean he's not overpaid.

3. Aramis Ramirez, 3B*
2010: salary: $15.75 million
Further commitment: $14.6 million player option for 2011, $16 million team option for 2012

Ramirez is worth every penny when he is healthy, yet he's averaged less than 130 games a year over the past five seasons, including just 82 last year.

4. Kosuke Fukudome, OF*
2010 salary: $13 million
Further commitment: $13.5 million for 2011

One of the biggest stars in Japan, Fukudome was expected to be a middle-of-the-order run producer and center fielder, but instead, has given the Cubs fourth-outfielder production. That mistake costs roughly half of the Marlins' payroll for each of the next two years.

5. Ryan Dempster, RHP
2010 salary: $12.5 million
Further commitment: $13.5 million in 2011, $14 million player option for 2012

While the Cubs did a dangerous thing by giving Dempster a four-year deal coming off a career year, it worked out in the first season as Dempster actually out-pitched Zambrano in 2009 with a VORP of 30.3, compared to the Big Z's 27.7.

6. Derrek Lee, 1B*
2010 salary: $13 million
Further commitment: None

Worth every penny.

7. Ted Lilly, LHP*
2010 contract: $12 million
Further commitment: None

Lilly has gone from an above-average lefty to one of the better ones in the game, and while he turns 35 before the 2011 season, another strong showing this year could lead to a considerable salary bump next year.

8. Carlos Silva, RHP
2010 salary: $11.5 million
Further commitment: $11.5 million in 2011, $2 million buyout in 2012

In fairness, the Cubs are responsible for "just" $6 million this year and $8 million next, as the Mariners, whose previous administration was dumb enough to give the fat strike-thrower this deal in the first place, will pick up $9 million. Even the $16 million the Cubs are responsible for is wasted money, a leftover sunk cost that serves as a two-year reminder of the Milton Bradley mistake.

*: The players marked with an asterisk have a contract clause preventing the Cubs from trading them, although Ramirez' only applies through 2010.

So not only did the Cubs give these contracts, they're stuck with them. On the financial side, they don't have the dollar flexibility needed to add talent for the stretch run, and on the flip side, should things go horribly wrong and the Cubs find themselves out of contention, they'll have veterans around with no ability to trade them to acquire help in building for the future because of the no-trade clauses. Hendry's club-crippling addiction to such clauses even applies to the draft: as if Jeff Samardzija's ridiculous deal to steer him away from football doesn't already generate snickers from other teams, he too cannot be dealt.

This isn't the say all is lost, even though just Lee and Lilly come off the books at the end of this season, still leaving the Cubs committed for more than $100 million for just nine players. We're talking about a team that finished in second place in the National League Central last season, 7 games out of a playoff spots, in a year where everything that could go wrong, did. The Cubs are already an economic cash cow, as Wrigley Field doubles as a tourist attraction and they are one of the few franchises with little correlation between win-loss record and attendance. A World Series title would turn them into a true economic monster, as winning forgives everything, both in terms of fan sentiment and economic struggles.

Which brings us to one last contract, that of Hendry. He signed a four-year contract extension following the 2008 season. He has four years to get that river card to come up in the form of a World Series or he'll be someone coming off the Cubs' books in 2012.

A version of this story originally appeared on ESPN Insider Insider.

Kevin Goldstein is an author of Baseball Prospectus. 
Click here to see Kevin's other articles. You can contact Kevin by clicking here

Related Content:  Cubs

42 comments have been left for this article. (Click to hide comments)

BP Comment Quick Links

oskinner

Glad to see Jeff on board and making more use out of his data; I'm so used to having to flip back and forth between the two sites, this should be a major win-win! Thanks Kevin for getting the ball rolling!

Jan 12, 2010 10:14 AM
rating: 2
 
Guancous

I've been a Cubs fan my whole life. This level off mediocrity is still an improvement over recent history. If you need me, I'll be in the corner rocking back and forth in the fetal position.

What happens next year? Josh Vitters to replace Lee at 1st? Jay Jackson and Andrew Cashner in the rotation? I assume the Cubs will trade Theriot next offseason to open up space for Starlin Castro.

Jan 12, 2010 10:31 AM
rating: 1
 
3n2sports

This could actually become a nice little segment giving a snapshot of each team's financial health (in terms of player commitments). It would fill up the remainder of the offseason and spring nicely.

Jan 12, 2010 10:33 AM
rating: 22
 
Travis Leleu

I second this suggestion.

Jan 12, 2010 11:03 AM
rating: 2
 
Eddie

Here here!

Jan 12, 2010 11:39 AM
rating: 2
 
Quagmire

I love the idea!

Jan 12, 2010 13:55 PM
rating: 1
 
CRP13

Good idea. I would really like to see some conclusions drawn about how a GM can finagle his way out of these types of situations, and maybe some "what if" projections of the types of deals that could be made over a 2-3 year period that would "fix" the club. There's good data here, but it would be very cool to have something to take away from it to make you go "hmm".

Jan 12, 2010 11:47 AM
rating: 2
 
JC

Agreed. Fun stuff.

Jan 12, 2010 11:47 AM
rating: 1
 
BillJohnson
Other readers have rated this comment below the viewing threshold. Click here to view anyway.

I love the idea too, but could we get some assurance from the Powers That Be that it doesn't lead to Kevin experience the same tragic fate as the last guy that tried something similar, the late, lamented Doug Pappas? I'm sure that Kevin would appreciate such assurances as well ....

Jan 12, 2010 14:50 PM
rating: -24
 
dianagram

Unfunny and uncalled for ... early nominee for most insensitive comment of 2010.

Jan 12, 2010 20:49 PM
rating: 0
 
Vince Galloro

Well, there's still some value in flipping to the original Cot's: it looks like Aramis Ramirez is a five-and-10 man anyway (9.11 years of service time through the end of 2008, according to the original Cot's), so the expiring of his contractual no-trade clause is moot.

Jan 12, 2010 10:48 AM
rating: 1
 
Richie

If the Cubs start losing, the no-trade-clause veterans will be happy to waive those clauses if traded to contenders. If the Cubs are winning, they'll want to hang onto those players.

Nothing wrong with the $125 million figure. That's probably about what it should be, behind the two bigger-market franchises, Yankees and Red Sox.

Maybe the bad contracts - which as a group don't strike me as all that awful, if two out of Soriano, Zambrano and Fukudome bounce back this year no one will be surprised - maybe they move the Cubs behind the Cards in terms of ability to take on salary. But if both the Cubs and the Brewers are contending come July, of course the Cubs will be more able to take on salary.

Jan 12, 2010 11:47 AM
rating: 0
 
Peter7899

If Jim Hendry believes in anything, its that money buys happiness. After 2006 when Tribune opened up their pocketbooks to drive up the value of the team, Hendry made it rain like he was Pacman Jones and free agents were strippers. Unfortunately for Hendry, and Jones can attest to this, there's some consequences and repercussions to the lavish lifestyle.

But let's give ol' Hendry a break. Heck, if Tribune had given me a blank check, I probably would've blown it on hookers (Soriano and Fukudome) and blow (Bradley) too. But that's probably why I'm not in charge of a 9 figure baseball roster. For some reason, lost to me and most of my compadres, somehow Hendry is.

I'm going to go way out on a limb here and say that an owner who built his wealth based on economics and analytics just might find a more like minded individual to run the team in the near future.

Jan 12, 2010 12:51 PM
rating: 5
 
ofMontreal

Yes! I give Hendry one year and that's it. They're gonna let it roll and see what happens. The Cubs should improve next year. But they might need a total management overhaul regardless.

Jan 12, 2010 16:40 PM
rating: 0
 
mhsiegel14
(636)

Fukudome actually wasn't *that* bad. A .375 OBP and some good defense was worth 4 or 5 WARP. He might be a bit overpaid but he's not the Cubs' biggest problem.

Jan 12, 2010 12:54 PM
rating: 3
 
BurrRutledge

Agreed. His salary isn't suitable for a platoon, but his performance sure is!

Jan 12, 2010 14:44 PM
rating: 0
 
Berselius

For what it's worth, Fukudome wasn't this hopeless vs LHP in Japan. Small sample caveats should apply - he only has 218 PAs vs LHP. He's not going to crush LHP, but it's highly unlikely that he's nearly as hopeless as his MLB performance has indicated

Jan 13, 2010 12:27 PM
rating: 0
 
ofMontreal

I would like to weigh in in favor of Kosuke. He almost earned his salary last season and seems to be adapting to US style. He reminds me a bit of 'Godzilla' in his development, with much better D and a lot less homers.

Jan 12, 2010 16:36 PM
rating: 1
 
Berselius

Agreed here too. Kevin, did you look at any value stats before writing this piece?

Jan 13, 2010 12:24 PM
rating: 0
 
Richard Bergstrom

Soriano's biggest problem is that he's probably been the least flexible player to deal with since the Cubs signed him. He must play left field, he must bat leadoff, he must hop when he catches the ball even if he pulls a groin, he must go between the hottest and the coldest player in the league, etc.

On the other hand, us Cubs fans have gotten extremely spoiled. The Cubs have been to the playoffs more in the last five years than they were in the three to four decades prior. Hendry does make some good moves on occasion, but he does handcuff himself with deals like Soriano and even the more minor moves like Miles and Gregg chip away at the budget and talent.

Jan 12, 2010 15:11 PM
rating: -1
 
ChuckR

One of the worst contract situations ever? Thats quite an achievement, I'm curious as to what other teams would be in the discussion for that dubious honor.

Frankly, I'm surprised that Hendry, who I think has done a horrific job, is still around. The 'all-in' attitude that lead to some of the contracts being signed was a novelty for Cubs fans at the time, but to my eyes there was a window of opportunity for playoff success that may have already closed. I suspect it will get worse before it gets better on the north side.

Jan 12, 2010 16:37 PM
rating: 1
 
sapsparky

I think that this may be a vast overstatement. By 2012 the Cubs have less money tied up than the Cardinals. Yes, 2010 and 2011 is set in stone, but most of those contracts come off the books in 2012.

Jan 12, 2010 17:06 PM
rating: -1
 
Benjamin Harris

According to the aforementioned Cot's, the Cubs are responsible for 62.5M in 2012 and 19M in 2013 (all to Soriano); the Cardinals are responsible for 30.938M in 2012 and 17M in 2013 (to Holliday). So that's just wrong.

Jan 12, 2010 17:35 PM
rating: 0
 
sapsparky

You are absolutely correct....for as long as it takes for the Cardinals to try and get Pujols under contract. If they are able to retain his services he's going to cost between $25-30mil per year. I apologize for presuming that everyone here was going on the assumption that the Cardinals were about to wrap up $50mil in two players, which is amazing for a team that has never gone over $100mil in payroll.

And even if you ignore that fact, then the Cubs only have $2mil more committed in 2013 than the Cards, so how are the Cubs in such a bad spot? The whole thing just seems to be an overstatement.

Jan 12, 2010 22:11 PM
rating: 0
 
sapsparky

Again, the 2012 number doesn't have anything for Pujols....making that number closer to $60mil.

Jan 12, 2010 22:13 PM
rating: -1
 
sapsparky

Sorry, not to belabor the point, but the 2012 option on Wainwright is $9mil, so you can bet that that will get picked up. Meaning that if the Cards get Pujols under contract (at the current estimate of $30mil per year) that means the Cards will be on the hook for $70mil for five players (Pujols, Holliday, Wainwright, Lohse, Molina). Oh, and Carpenter's option is $15mil.

Jan 12, 2010 22:18 PM
rating: -1
 
oskinner

As Kevin mentioned in the article, one of the Cubs problems is contract construction with so many no-trade clauses. Not mentioned by Kevin, but also a problem, is that much of their 2012 and 1013 commitments other than Soriano are PLAYER options (Dempster's $14 mil in 2012 and Zambranno's vesting option of $19.25 mil in 2013, as well as the strange case of Aramis Ramirez: a 2011 $14.6mil player option and a $16 mil 2012 CLUB option that HE can void by giving up the $2 mil buyout)! So the Cubs are left with big payroll commitments if the player tanks or is hurt (insert Dempster) and nothing but draft choices if the player does well and bolts for free agency (hasn't Ramirez already done this to the Cubs before?).

By contrast, the Cardinals are looking at CLUB options on Carpenter ($15 mil in 2012), Molina ($7 mil in 2012), and Wainwright ($9 mil in 2012 and $12 mil in 2013)! Throw in whatever you want for Pujols post-2011, but would anyone rather have their payroll going to productive players rather than to the Carlos Silvas of the world?

Jan 13, 2010 05:49 AM
rating: 6
 
sapsparky

I think that those are all fine points (and I think that most people are of the opinion that short of a World Series Hendry is gone after his contract is up) but the $62mil commitment ends after 2012 and while you can point to the Cardinals having some control over their destiny, they are about to have $50mil wrapped up in 2 players with a whole payroll to fill in a smaller market.

I harp on the cardinals here because while I do believe Holliday to be a superior player to Soriano (and the stats certainly bear that out), they didn't do themselves any favors by handing him the insane contract that they did knowing that they were going to have to hand out one that was likely going to be 50-60% bigger to Pujols. He doesn't age well per pecota, he hasn't played one full season outside of Coors (basically getting 17mil per year based on less than three months of fantastic play in St. Louis)and by the time he's at the end of his contract there's very little chance he'll be a full-time player, let alone workth 17mil.

I would certainly like the Cubs to have a bit more control over their own destiny for 2010 and 2011, but it becomes largely moot after that. Hendry gets to play out his contract with these players. If he doesn't win a WS, he and nearly every player on this team goes away after that.

Jan 13, 2010 06:25 AM
rating: 0
 
briant1
(778)

Not that this changes the gist of the article, but by what metric is Fukudome considered a "4th outfielder"? VORP and WARP1 have him as a average to above average producer.

I'll take this a step further and note that really, out of this list, there are only 2 guys truly overpaid (3 if you count Bradley, which begat Silva), Soriano and Zambrano. If 2009 truly showed Soriano's skill set going forward, then this is a bad contract of comic proportions. If however, he bounces back to anywhere near his 07-08 levels, then it's just a bad contract, the same bad contract everyone knew it would be when he signed it.

Jan 13, 2010 06:52 AM
rating: 0
 
vtadave

I find it rather humorous (sorry Cubs fans), that the two most productive players listed above, Derrek Lee and Ted Lilly, are also the only two of that group that are off the books after next season. Sure, the Cubs get a LITTLE flexibility with their contracts expiring, but all signs point to both being productive again in 2010, leaving the Cubs to have to either dole out two more long-term deals or attempt to replace very productive players in free agency.

Jan 13, 2010 07:49 AM
rating: 4
 
dianagram

But would you agree that both Lee and Lilly are "past-prime" in terms of production?

Jan 13, 2010 08:04 AM
rating: 0
 
Peter7899

Lee has been very productive for his contract, but like Diana hints at, Lee will not be paid $13 million a year going forward. I do see Lilly getting a Randy Wolfe contract next winter though ala 3 years $30million. Purely a guess, but I have a feeling Derek re-ups with the Cubs for 2 for $20 million. As much as I love Ted Lilly, and the Cubs love Lilly, I don't see how they can afford to bring him back after this season.

Jan 13, 2010 10:59 AM
rating: 0
 
Dano

Agreed this would become a great new regular feature. In fact, I'd like to see a team reviewed from the opposite perspective, like the A's, who have hardly any money tied up now, or in the future as the only guys with contracts for 2011 are all club options (Chavez - no way, Ellis - maybe, Crisp - maybe)

Jan 13, 2010 11:47 AM
rating: 0
 
Berselius

oskinner mentioned it above, but almost everyone, especially Cubs fans, seems to forget that Ramirez can opt out after this season. Unless he's badly injured again, there's very little chance that he won't. He'd have a much easier chance at cashing in on another multi-year deal after 2010 than he will after 2012. I'd like to think that he'd like to stay with the Cubs, since he re-signed with them the first time he opted out despite the Angels supposedly gassing up a dump truck full of money to send his way. But it's definitely not something to count on

Jan 13, 2010 12:22 PM
rating: 0
 
Peter7899

Ramirez is owed $30M over the next 2 years. Do you really think he's going to opt out? What did Beltre just sign for? Anything close to Ramirez? No. No way he opts out.

Jan 13, 2010 14:26 PM
rating: -1
 
Berselius

Good point. Ramirez still has a big stick though, and has been more valuable over the past several seasons. He still posted a higher WAR than Beltre in 2009 despite separating his shoulder and missing half the season, and has posted 4-5 WAR seasons ever since he joined the Cubs. I'd be shocked if the Angels still weren't interested in backing up the truck for him. I suspect that Beltre has been so underrated for so long that he's overrated now.

Jan 13, 2010 14:51 PM
rating: 0
 
Peter7899

The more I think about it, the more I think maybe it is possible for him to opt out. 3 Possible outcomes.

1. He doesn't opt out. Plays 2010 and 2011 for $30M, Cubs pick up his 2012 option for $16M. He'll be 34 and hitting the market again.

2. He doesn't opt out. Plays 2010 for $16M, 2011 for $14M. Cubs buy his 2012 out for $2M. This is where the risk comes in for Ramirez. If he doesn't stay healthy they don't pick up the option and hits the market coming off a bad year at 33.

2. He opts out. Plays 2010 for $16M, then hits the market at 32. This is where the risk is on the club but the incentive is on Ramirez. He plays at least 145 games and performs he can opt out and re-up with another club for $16M a year for 3 or 4 years no sweat. Has another 2009 and he's got his "pillow contract" for 2011.

If I were a betting man, and he has a good year, I bet he stays only if the Cubs guarantee his 2012.

Jan 13, 2010 15:58 PM
rating: 2
 
Berselius

I posted a broader look at this over at the blog I post at, If you're interested. http://www.anothercubsblog.net/2010-articles/january/will-ramirez-stick-around-after-2010.html

Jan 14, 2010 09:57 AM
rating: 0
 
eighteen

September 20, 2010: After falling into 4th place in the NL Central, the Cubs today announced the firing of General Manager Jim Hendry.

Jan 13, 2010 13:29 PM
rating: 0
 
YaoPau

Last three years, Zambrano's had a 3.88 ERA, averaged 191 IP, and had a .728 OPS in 233 at-bats. Two playoff starts aside, I gotta think he's earned his contract so far.

Jan 14, 2010 10:08 AM
rating: 0
 
Berselius

Not to mention that he pitched well in those two playoff starts - his infield defense let him down big time in the second one.

Jan 14, 2010 10:31 AM
rating: 0
 
zskuhn

Yes. Next subquestion.

Jan 14, 2010 18:54 PM
rating: 0
 
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