BP360 is Back! One low price for a: BP subscription, 2022 Annual, 2022 Futures Guide, choice of shirt
Team Audit | Player Cards | Depth Chart

Signed president of baseball operations Theo Epstein, general manager Jed Hoyer, and senior vice president of player development and scouting Jason McLeod to five-year contracts. [9/28]

Wednesday night the Cubs announced that they have signed Theo Epstein, president of baseball operations since 2011, to a five-year contract extension which will keep Epstein on the North Side of Chicago through the conclusion of the 2021 season. Terms of the deal have not yet been disclosed, but reports suggest that the final figure is somewhere in excess of $50 million. That’s (a) more than anyone has ever been paid before for a similar job, and (b) right around where we expected the number to be, given what we know about Cubs owner Tom Ricketts, Theo Epstein, and the relationship between the two.

In fact, the confirmation of long-held expectations is the theme of this “transaction,” insofar as transactions have themes. Since arriving in Chicago five years ago, Epstein and his staff have taken the Cubs from a third-class organization–comparatively bereft of talent, wins, and off-field leadership–to a franchise that has (we can say this, at the very least) won 200 regular season games over the course of their last two campaigns. That’s no small feat, but it’s been done. There was no question the Cubs would want him back, and at nearly any price. Now he is back, and the Cubs are better for it.

In fact, in the absence of any real news to report here—the status quo makes for a lousy headline—I’d like to discuss briefly two elements of the deal that are worthy of further consideration. The first is this: General manager Jed Hoyer and senior vice president of player development and scouting Jason McLeod are along for the ride, too. Both have had ample opportunity to test the waters elsewhere in recent years— McLeod as recently as last week, in Minnesota—and both have now affirmatively committed themselves to Chicago for another five years. That’s both a boon to a franchise that has recently found itself led more by a troika than a dictator and an affirmation of the culture that’s been built over the last half-decade in Chicago.

So, second thing: $50 million. That’s a lot of money. But here’s the thing: It’s almost certainly worth it. Let’s suppose that we can assign 50 percent of the credit for the Cubs’ strategic choices in the next five years to Theo Epstein (the rest, I imagine, goes to some combination of the rest of his staff). Let us further say that a replacement-level GM and front office squad could acquire and maintain a roster half as good as the Cubs’ current one, which has produced about 70 WARP this season. Half of that is 35 wins and, though it's of course the players who produce the wins and who should get the credit, surely we can understand that the credit for their performance above those who would otherwise have played is due to the front office. Anyway. 35 wins. Half of that (Theo’s portion) is 17.5. At a very conservative price of $8 million a win, that’s $140 million worth of value created by Theo. A year. (It’s $700 million over the length of the contract).

But! (You cry.) It’s ludicrous to assign 50 percent of the credit for the Cubs’ choices to Theo! OK, sure. It is ludicrous. Let’s assign 10 percent of the credit, instead (which I think is low, but whatever). And let’s say that the Cubs actually produce 60 WARP annually, not 70, over the next five years. Half of 60 wins is 30 wins, and 10 percent of that is three wins. Again, at $8 million per win, that’s $24 million in value every year, or $120 million over the life of the five-year contract. Still a long way from $50 million.

In fact, in order to believe this deal isn’t worth it for Theo at $50 million over five years, you’d have to believe that he’s worth (on the margins) something on the order of one-and-a-half wins a year, or even less than that. That’s a reliever, and not even a terribly good one. Do you believe Theo Epstein is worth more than a middling reliever? I do. The Cubs do. You should too. Front office talent is still ludicrously under-priced, and the Cubs just got the best on the market for way under cost. Oh, and two guys named Jed and Jason, too.

Thank you for reading

This is a free article. If you enjoyed it, consider subscribing to Baseball Prospectus. Subscriptions support ongoing public baseball research and analysis in an increasingly proprietary environment.

Subscribe now
You need to be logged in to comment. Login or Subscribe
Such a good day. I was thinking that the deal would include a small ownership percentage of the team. The Ricketts got a bargain.
It's about time the Cubs are run as a professional organization. They have been able to spruce up the stadium and the players in a relatively short period. Nearly all the credit goes to Theo and his gang, but without the support of ownership none of it could have happened. It's a good time to be a Cubs fan.