What would Cubs' payroll look like with Shohei Ohtani on the North Side?

A report has emerged that the Chicago Cubs could be “serious contenders” for the services of free agent Shohei Ohtani, but what would their payroll look like if they were to pull off the signing of the century?

Here’s what we know, and what could unfold in the negotiations surrounding Ohtani.

How Serious is the Cubs’ Interest?

Judging by the report from USA Today’s Bob Nightengale, the Cubs are expected to be “serious contenders” for Ohtani, and several general managers told the insider that the Cubs are expected to be the “most aggressive team” in pursuit of the reigning American League MVP.

The Los Angeles Dodgers will surely be involved, as will the Texas Rangers, New York Yankees and Boston Red Sox, among others.

Could Ohtani’s Injury Concerns Play a Role?

Sure, there is some concern that Ohtani’s value could be impacted by the elbow surgery he underwent during the 2023 season. That procedure will in all likelihood keep him from playing in the field during the 2024 season, but beyond that, he is expected to make a run at returning to the pitcher’s mound.

That two-way ability is what makes Ohtani’s such an intriguing player, but even if he were to forego pitching in the future, there is always the very real chance he could make at least a serviceable, if not above-average, corner outfielder. If he were able to do that, then his bat would still make him the top-available free agent, and a highly-prized commodity.

What Would the Money Look Like?

While it’s unclear what the exact figure will be, one would have to figure that Ohtani is going to come close, if not exceed, the richest contracts in baseball history. Currently, Mike Trout has the highest total value of a contract, checking in at $426.5 million with the Angels.

In terms of annual salary, Max Scherzer and Justin Verlander each signed deals that paid them $43.3 million annually, with Aaron Judge close behind at $40 million.

Since Judge’s contract with the Yankees runs for nine years through his age 40 season, one could realistically assume that Ohtani would want his next deal to end on a similar timeline as well.

For the purposes of this exercise, we will say that Ohtani will sign a 10-year deal, paying him $40 million per season for a total financial outlay of $400 million.

How Would That Impact the Cubs?

According to Spotrac, the Cubs’ current estimated payroll, at least for luxury tax purposes, stands at just under $185 million. That includes their current players, as well as the anticipated salaries they would hand out to their pre-arbitration and arbitration-eligible players.

According to MLB, the luxury tax threshold for the 2024 season will check in at $237 million, meaning that any team that exceeds it would have to pay penalties to the league.

For the first year that a team exceeds the tax, all payroll that goes over the $237 million mark is taxed at 20%, meaning that for every $1 million, a team would have to pay $200,000 in taxes.

That also compounds each year, with the penalty increasing to 30% for a second year of overages and 50% for three or more years.

What’s more, if a team exceeds the luxury tax by more than $20 million, they are assessed a 12% surcharge. Doing so by $40 million would result in a 42.5% surcharge, and any team exceeding the luxury tax by $60 million or more would potentially have to pay a staggering 60% surcharge.

With all of that in mind, if the Cubs were to pay Ohtani $40 million, and decided to keep all of their arbitration-eligible players, their payroll would balloon to an estimated $225 million, according to Spotrac.

That would give the Cubs just $12 million to work with to fill out the remainder of their roster, a task that could include corner infielders and additional pitchers.

The Cubs would almost assuredly exceed the luxury tax in the coming year, and they would run the risk of repeat violator status given the extensions handed out to Ian Happ and Nico Hoerner, as well as the continued increases in the salary of Justin Steele.

Are There Ways to Save Money?

The Cubs could lower their luxury tax bill by opting not to re-sign some of their arbitration-eligible players, with Patrick Wisdom and Mark Leiter standing out on that list, but that would only save them a few million dollars.

The real savings would come in the second year and beyond of Ohtani’s deal, with Kyle Hendricks’ $16 million contract coming off the books. Drew Smyly’s $10.5 million would also come off the books, as would the $10.25 million in retained salaries for Trey Mancini and Tucker Barnhart, both of whom are counting against the Cubs’ luxury tax bill in 2024.

Will the Cubs Pull the Trigger?

It seems hard to imagine a world where the Cubs would be able to compete with the financial resources of the Los Angeles Dodgers, but with the New York Mets and San Diego Padres likely sidelined in the discussions, and with the New York Yankees potentially looking elsewhere to make impacts, the Cubs could be in a position to seriously compete for Ohtani.

Of course, there are other needs that will have to be addressed too. That includes center field, with Cody Bellinger departing via free agency. Yes, Pete Crow-Armstrong is likely the long-term play there, but having another veteran outfield option is surely something the Cubs would be okay with.

The Cubs also need to solidify their corner infield spots, both of which were black holes in terms of offensive production in 2024. The team has indicated they will explore having Christopher Morel manning first base, but between him and Matt Mervis, the Cubs certainly can’t assume they have that position taken care of.

Finally, there is the pitching staff. The Cubs will need to add more bullpen arms too, and with Marcus Stroman opting out of his deal, the Cubs will need to add at least one more starting pitcher to the mix as well, and there are plenty of options available on the free agent market there.

Adding Ohtani wouldn’t rule the Cubs out on adding other free agents, but it certainly would limit the level of player they would seek out.

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