How will the MLB lockout impact the Chicago Cubs moving forward?

And so the lockout has begun. Let’s hope it’s not ‘The Lockout’; those caps will mean something’s gone horribly wrong. As the owners and players head into the trenches, let’s take a look at how the CBA negotiations might affect the Chicago Cubs in their journey back to postseason contention.

A recently leaked Players’ Association document lays out four key issues for the players: (1) the luxury tax and draft pick compensation; (2) raising salaries for younger players; (3) tanking; and (4) service time manipulation. While the owners’ shopping list hasn’t been posted on the interwebs, one key focus of theirs will be playoff expansion. Let’s look at each of these issues in turn.

Luxury tax and draft pick compensation

Formally (and self-servingly) called the Competitive Balance Tax in the CBA, this punishes the highest spending teams with fines and draft penalties. The owners will likely want to lower the threshold at which the penalties kick in, and indeed made a proposal to this effect, linked to a minimum payroll requirement. The players want to get rid of the luxury tax entirely. That (sadly) is not going to happen, but they will fight hard to avoid any drastic lowering of the threshold. Given the players’ seemingly weaker bargaining position (more on this in a minute), a modest tightening of the screw is a reasonably likely outcome. While the luxury tax by design disproportionately harms high-revenue teams, the Cubs’ payroll now and for the next couple of years (at least) will probably be below any likely threshold.

Draft pick compensation, that is, forfeiting draft picks in exchange for signing certain free agents, has been a sore point for players since the system’s inception. It has evolved over the years, and currently requires the signing team to forfeit one or more picks if the player’s original team made a qualifying offer – a one-year contract at the average of the top 125 salaries. Additional penalties apply to teams exceeding the luxury tax. Currently, the highest forfeitable pick is a team’s second pick. Players would like to push compensation picks into the later rounds or do away with the system entirely. Should they succeed, that would probably make it easier for the Cubs to fortify their home-grown roster with free agents when the time comes.

Chicago Cubs, like every other team, will feel the impact of a new CBA

Raising salaries for younger players

The CBA effectively divides players into three categories: pre-arbitration, arbitration eligible, and free agents. The sabermetrics revolution taught that, under the current system, the first two player categories are often underpaid compared to the value they produce. The Players Association gets this, and while they continue to fight restraints on free agency, they also recognize the need to fight more vigorously for the younger players who increasingly form the core of winning franchises.

The Cubs’ next postseason roster will be considerably younger than the current one. Any agreement that tends to increase players’ salaries earlier in their careers will probably raise the cost of that roster compared to the current baseline. That isn’t necessarily all bad for the Cubs; the Cardinals aside, the Cubs play in a division of  financial minnows. Raising the price of younger talent will probably hurt the Pirates, Reds, and Brewers more than the Cubs, unless the salary rises are so high they push Chicago toward the new luxury tax threshold, and exceedingly unlikely prospect.

Unlike the luxury tax, the players may win some ground here; the owners do not seem ideologically opposed to some adjustments, particularly if those can come at the expense of older players’ salaries. However, the owners’ oh-so-snarky opening salvo on this issue doesn’t bode well for a swift resolution.

Tanking

However you define “tanking” (and whether it is still even possible), owners and players now agree that it is about as likable as Bill Belichick. The details are devilish, mostly involving a rejiggering of the June draft, but there seems to be general agreement that something should be done.

Even under the current system Jed Hoyer has said the Cubs are not tanking, and I believe him. Over the last five complete seasons (i.e. excluding 2020) the worst MLB team has lost an average of 110.6 games. The only way the Cubs could lose that many next season is if they sign Hal Chase. The Crew and the Cards will be good in 2022 but not dominant, and the Pirates and Reds will lose at least 90 apiece.  There just won’t be enough wins in the NL Central for the Cubs to absorb 110 losses. Unlike drinking, tanking works best when you tank alone.

So the draft fixes, which could include (among many other possible options) introducing an NBA-style lottery system and limiting how often a team could have the number 1 pick, will likely prevent the Cubs from repeating the Epstein Tank. But circumstances have probably made that harder anyway. To the extent the draft changes reward mediocre teams at the expense of awful ones, the changes would probably help the Cubs. However, if the fixes include placing small-market teams in a preferential draft tier, that would obviously hurt. Given where the Cubs are on the rebuild curve, Len Kasper’s highly innovative solution wouldn’t help at all, and it seems too outside the box for an industry that lives in a pretty small box.