Latest On Cole Hamels’ Option, Cubs’ Payroll

Nov. 2: ESPN’s Buster Olney tweets that other teams have gotten the sense that the Cubs’ payroll flexibility is considerably more limited this offseason than many might expect. The sense, per Olney, is that the team will have to “spend very carefully to affect upgrades for the 2019 season.”

That’d explain to an extent why the Cubs would prefer to shed additional salary before electing to retain Hamels. It’d be a departure from standard operating procedure for Epstein & Co., and from a broader perspective, it does raise some questions about the team’s ability to play for top-of-the-market free agents.

Nov. 1: The Cubs still hope to keep Cole Hamels, per Ken Rosenthal of The Athletic (Twitter link), but there may be some steps taken before formally bringing him back. A multi-year contract between the two sides, at this point, is “unlikely,” per Rosenthal, who notes that the Cubs might make a trade to clear some salary off the books before exercising their $20MM option on Hamels.

It’s not immediately clear why the Cubs would feel the need to shed salary before picking up the option. Chicago dipped under the luxury tax threshold this past season, and Hamels’ $20MM salary for the 2019 campaign wouldn’t have any bearing on the team’s 2018 luxury tax ledger. Beyond that, Chicago appears poised to spend in perhaps significant fashion this offseason as president of baseball operations Theo Epstein, GM Jed Hoyer and the rest of the front office look to upgrade a roster that fell shy of expectations when it lost the National League Wild Card game to the Rockies. Given the fact that they’re already likely to add to the payroll, it’s curious to see the suggestion that salary must be shed before free agency truly begins in earnest.

That’s not to say that there isn’t salary the Cubs would prefer to jettison. The remaining $100MM+ on the contracts of Yu Darvish and Jason Heyward certainly aren’t movable right now, but the remaining $25.5MM on Tyler Chatwood’s contract could perhaps be flipped for a different bad contract (or paid down to some extent in a salary dump deal). The Cubs would probably prefer not to pay $5MM for Brandon Kintzler’s 2019 season, either, after the righty struggled in Chicago following a trade from the Nationals.

However, while it’s natural that the Chicago front office would want to shed some of those onerous financial commitments, it’s unclear why they’d need to move any money before picking up Hamels’ option. Exercising Hamels’ option would push the Cubs’ payroll well north of the $206MM luxury tax line for the upcoming season, but there’s been no indication that remaining south of that line is any sort of target for the organization. And even if the team isn’t comfortable with the idea of adding Hamels at $20MM and then spending aggressively in free agency, the Cubs could simply exercise Hamels’ option and then look for means by which to shed some unwanted contracts (e.g. Chatwood, Kintzler) after the fact.

Perhaps there’s more at play here than meets the eye — speculatively speaking, ownership may want a rotation piece cleared out before committing such a lofty payday to Hamels, for instance — but the takeaway that the two sides aren’t likely to strike up a multi-year pact is significant in and of itself. There’s been some speculation that Hamels and the Cubs could work out a multi-year arrangement that would lower the annual rate but still promise Hamels additional guaranteed money. That scenario, it seems, will not come to fruition.

The Cubs, then, are faced with the decision of agreeing to pay Hamels $20MM next season or opting for a $6MM buyout. The Rangers are on the hook for that buyout money as part of the trade that sent Hamels to Chicago in the first place, so while the opportunity exists for the Cubs to swoop back in and re-sign Hamels even after he hits the open market, one would imagine that the Rangers would take some umbrage to that scenario, even if there’s technically no wrongdoing on the Cubs’ behalf.

Frankly, this dilemma for the Cubs was largely unforeseeable at the time of the trade; when the deal went through, it looked like little more than a glorified salary dump that would give the Cubs a durable back-of-the-rotation starter. Hamels’ massive home/road splits gave some hope that he could fare better in a new environment, but few would’ve expected that he’d return to borderline ace status following a change of scenery. That’s precisely what happened, though, as the soon-to-be 35-year-old lefty allowed just five runs through his first seven starts in Chicago and posted an overall 2.36 ERA in 76 1/3 innings after the trade. Hamels benefited from an unsustainable 82.3 percent strand rate, so some regression is to be expected, but he was a vastly better pitcher with the Cubs — so much so that the $20MM option to which few paid any mind at the time of the deal is now a fascinating wrinkle to the onset of free agency as the deadline to make a decision looms.