The First Hundred
There is so much in baseball that we can quantify. This trend of needing to quantify data is not confined to baseball, but perhaps it hasn't been as successful in any other area as it has been in the game. There is some argument about whether that is a good thing in every facet of life, but in baseball it has increased our understanding of the game tremendously. It is hard to argue that isn't a good thing in baseball, but there are still gaps in what we know. A player, much less a person, cannot be reduced to just a series of numbers, and the totality of a player is in those gaps we still have.
Hungry, Hungry Castellanos
It is safe to save that everyone loves Nick Castellanos. It is hard to make a better first impression than the Cubs new corner outfielder has done. The Cubs are now 6-2 since the acquisition, but more than that the lineup has looked completely different with Castellanos batting second. Castellanos has hit safely in every game, starting with the Cubs lone hit against Jack Flaherty on August 1 to his two home run performance last night.
The nine extra base hits in those eight games are easy to quantify. What is a lot harder to qualify is the attitude that Castellanos has brought to the Cubs. Joe Maddon was the first to describe Castellanos reminding the Cubs what hunger looks like. His teammates have commented on it, and Theo Epstein even mentioned hunger when describing Castellanos yesterday.
The comments from Maddon prompted a few to raise their eyebrows at some of the implications of the statement. After all, Maddon's strengths as a manager are the relationships he develops with players, and that the Cubs needed an outside influence to get through to the team undercuts that a fair bit. The soundbite also does not speak well of the players who have been using urgency as a watchword for the entire season.
The effect of Castellanos' attitude is unmeasurable, and making an immediate impact with the bat certainly makes it easier to affect clubhouse chemistry. Winning cures most clubhouse issues, and those factors led many in the early days of sabermetrics ascendancy to dismiss it as a non-factor. An anecdote I can recall from 2004* was then GM Paul DePodesta quipping about the loss of veteran catcher Paul Lo Duca's clubhouse presence in the Brad Penny trade. The line was something to the effect of: "he talked with Billy Beane about acquiring some clubhouse chemistry, but they didn't think it would clear waivers".
My beliefs about clubhouse chemistry followed that mold until about five years ago. The effect of Jonathan Herrera and then David Ross on the rise of this core though shifted my beliefs. There are times where the old guard of baseball wisdom perhaps overvalued it, but the idea that because something isn't measurable it doesn't exist was also a bridge too far. So perhaps Castellanos' effect on this team is greater than just his production and the lineup differentiation he provides. Perhaps the true totality of Castellanos' value is in that gap of what can and cannot be measured.
The Luxury Tax
The Luxury Tax, or what it is actually named the Competitive Balance Tax, has been a topic which I've brought up several times. I mentioned it directly yesterday when I made the assertion that it has been more salesmanship than a death knell to the long term viability of an organization that is frequently mentioned. It has come up in the conversations occurring in the comments around the Cubs team record high payroll. But there doesn't seem to be a lot of agreement about what those penalties actually are.
The goal in the next couple of paragraphs isn't to make any particular case about the luxury tax and what teams should do about it. Rather the goal is to state exactly what the penalties actually are for passing each threshold. The tax is primarily a financial deterrent, and the overwhelming majority of the penalties for exceeding each one of the three levels of the tax threshold is an added financial cost. The CBA is available to all to read here, and in it is this handy chart on page 110.
The Cubs currently sit at that middle tier of tax penalties as a first time CBT payer. The Cubs are either about 1.5 million dollars from entering the highest tier or over 11 million dollars, depending on the site you prefer. We are going to use the highest figure to be the most generous to the Cubs ownership's spending in 2019. That has the Cubs taxable payroll at $244,442,524.
The 32% rate is their highest tax rate, but this is not a tax on the entire payroll. Rather these taxes are marginal taxes on the amount spent over each threshold. The Cubs in 2019 will be charged a tax of $4 million on their first $20 million over. The Cubs will then pay a 32% tax on the remaining $18. 5 which is just a bit shy of $6 million. The Cubs tax bill would be about $10 million in the year 2019. That is not nothing, but when you factor in that the Cubs actual payroll is significantly lower than their taxable payroll due to extensive front loading of contracts years ago. The Cubs actual payroll figure is $214,563,493 and so the total cost of this year's team will actual be lower than the taxable figure including their tax bill.
Now what if the Cubs had been willing to blow by the highest level and signed the most expensive contract by any free agent this offseason by average annual value. Manny Machado received the highest at $30 million which would have pushed the Cubs payroll to $274.5 million roughly, and for the hypothetical let's pretend the Cubs have been spending above the tax for three years now. The Cubs total tax bill at this highest level would have been around $50 million. There are some financial teeth to spending at the absolutely highest levels for three seasons in a row or more.
Many fans have stated that the financial costs aren't really their concern, but rather the penalties imposed on acquiring future talent. And it is true that for the first time in baseball history there is a draft cost for spending money on big league payrolls. That is true only for teams spending in the third tier which have their highest draft selection moved back ten places. That is not an inconsequential penalty with the hard slotting of draft picks and the rapidly declining value of each slot in the first round determining in large part the total size of the bonus pool, but it is hardly an impossibility to continue filling your pipeline. Winning and making the postseason is a far harsher draft penalty than spending money.
There is no penalty for just going over any of the competitive balance tax threshold in terms of international amateur bonus pools. According to the CBA page 287 the Cubs are in the group of teams that will be given the standard bonus pool each year. The only teams that receive higher bonus pools are those that receive a competitive balance pick which the Cubs are ineligible to receive due to their massive market size.
The only effect being over any threshold of the competitive balance tax has on the bonus pools is the penalty for signing a free agent who received a qualifying offer. The penalty for signing such a free agent for teams going over the threshold at all is losing a second round, fifth round draft pick and $1 million in international bonus pool money. Those are harsh penalties, but there is a penalty for any team which signs such a free agent. The difference between being over the threshold or not for the Cubs is actually a fifth round draft pick and $500,000. Again these penalties are not nothing, but they are hardly prohibitive for a team building a quality farm system while being over what most teams owners are treating as a salary cap these days.
*I have searched Google on more than one occasion to find a link to this line, but have come up empty. There is the possibility that it is an invention of my own mind. Human memory is such a fragile thing, but it has been burnt into my memory for so long that it is hard for me to question that it did happen.
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