Candid Jed Hoyer Addresses Budget Situation, Futile Alex Bregman Pursuit

Maybe we’ll be able to start talking about the players the Cubs actually have in camp once it officially opens for position players on Friday. Until then, Alex Bregman remains the topic of conversation across baseball and out in Mesa, where Jed Hoyer addressed the media to discuss his ultimately futile pursuit. The Cubs put together what should have been a competitive proposal, particularly with Bregman seeking a shorter deal, but the Red Sox came flying in off the top rope with a Macho Man flying elbow.

“Ultimately, I feel like we made a strong offer,” a deflated-looking Hoyer said. “But clearly it wasn’t enough and again, when you’re in free agency, most of the time a player goes to the highest bid. The Red Sox got a great player. They were aggressive and kudos to them, they got a great player. But I’m glad that we were able…given where we are with our budget right now, I’m glad that we were able to pursue it and, like I said, I’m thankful that we were able to.”

The initial report of $120 million over four years was revised to $115 million, which comes to a $28.75 million AAV that certainly seemed reasonable for Bregman’s projection production. Detroit had the highest overall value at six years, $171 million, but they and the Cubs both punted the first opt-out until after the second year of the deal. So the Red Sox not only won with a $40 million AAV whopper, their inclusion of opt-outs after each of the first two years made their offer significantly stronger than the others.

Even with deferrals lowering the net present value of Bregman’s deal to something in the $90-100 million range, the Red Sox had the highest bid on an annual basis. This and many other deals being signed, especially by the Dodgers, have led fans to wonder why the Cubs don’t try to operate the same way. The answer wouldn’t be too simple even if I had the financial data to back it up, but my hypothesis is that Tom Ricketts is either principally opposed to the practice or simply lacks the capital to make it happen more broadly.

He’s gone on record with his disdain for “dead money” from luxury tax overages, something the Cubs are dealing with now as a result of going over last year. Though it’s not exactly the same, paying for players who are no longer on the team correlates strongly to the CBT penalties. According to Bruce Levine, Hoyer said the Cubs won’t defer money any longer because they’re still paying Jason Heyward ($5M each of next two years) and Jon Lester ($2M this year) on deferred deals. That stuff no longer goes toward the CBT, but it is a drag on ownership’s total expenditures.

To that end, we need to differentiate between deferrals and how they impact the CBT number vs. actual payroll. It’s not as simple as kicking the can down the road, because money must be put aside for the sole purpose of funding the deferred obligation. The CBA holds that funds can be kept in cash or cash equivalents, but teams can also invest in “registered and unrestricted readily marketable securities” as well. So the total cash layout doesn’t really change much.

But doesn’t that mean teams should be able to invest the money and earn interest while it sits there waiting to be paid out?

I’ve often wondered aloud whether the Ricketts’ never-ending investments in the ballpark and local real estate have left them with a massive disparity in net worth and liquid capital. This isn’t like Steve Cohen with the Mets, especially when some of their cash-generating ventures like Marquee Sports Network haven’t produced as expected. Or maybe as the team’s business operations arm had hoped, as I think a lot of us saw the RSN’s disappointing returns coming a mile away.

And now I’ve gotten into topics that are a little too far over my head to keep chasing, so let’s get back to what the Cubs will do with the money that didn’t go to Bregman. In short, nothing. Hoyer admitted that there isn’t a plan to reallocate it other than maybe a few minor tweaks. As frustrating as that might be for some fans to hear, it’s a much better route than spending $30 million on some combination of remaining free agents.

Maybe they still go out and sign Justin Turner for a few million or something, but that’s probably the biggest move they’ll make. Indications out of San Diego are that the Padres are fine with keeping all their pitchers for the time being, which is partly true and partly AJ Preller admitting he didn’t get anyone to bite on massive asking prices. With that in mind, it makes sense for the Cubs to keep more money in reserve for splashy deadline deals should they be in position to do so.

They’d damn well better be buyers, and the prospect cost for guys like Dylan Cease, Robert Suárez, etc. will be much lower in July. I’ve been saying all along that they were probably budgeting for real payroll in the range of $200-210 million, which would leave them up to $19 million or so left to spend at some point. The upside, if you want to grasp a little handful of optimism, is that the Cubs have over $70 million falling off next season and another $89 million disappearing after 2026. Let’s avoid concerning ourselves with the expiration of the current CBA at that same point, but suffice to say it’s a factor.

What I’m driving at is that the money is most definitely there to extend or sign Kyle Tucker to a monster deal, it’s just a matter of whether ownership will allow it. In the meantime, we can finally focus our attention on the 2025 season and how the Cubs will navigate it. At the risk of telling you how to fan or just feel in general, I sincerely hope we can all have a little more fun this year than we have over the past several.