Cubs Exercise Option on Cole Hamels, Trade Drew Smyly to Rangers

In a move that had been hinted at by Ken Rosenthal Thursday night, the Cubs have indeed picked up Cole Hamels’ $20 million option while also making a trade to clear some salary. And wouldn’t you know it, they made the trade with the Rangers, from whom they got Hamels last years. As Jerry Crasnick, now a free agent after a long tenure with ESPN, was first to report, the Cubs are sending Drew Smyly (he corrected the spelling in a subsequent tweet) and his $7 million for 2019 ($5M AAV) to Texas.

The #Cubs are picking up Cole Hamels' $20 million option today, according to sources. In a related move, they're trading pitcher Drew Smiley to the #Rangers.

— Jerry Crasnick (@jcrasnick) November 2, 2018

This is an interesting move on a couple levels, not the least of which is how frequently the Cubs and Rangers have done business together. And not just with player personnel, as the teams essentially traded a pitching coach for an assistant GM in October. Not long after the Cubs hired Anthony Iapoce to replace Chili Davis, Shiraz Rehman left the Cubs front office (a story Cubs Insider broke, by the way) to work under Jon Daniels in Arlington.

But there’s also the matter of Hamels’ contract and the stipulations of the trade, which would have seen the Rangers footing the bill for a $6 million buyout had the Cubs not picked up the option. The Cubs wanted Hamels back after he performed so well for them following the trade, though a multi-year extension would have forced the Rangers to pay up and could have irreparably damaged a great business partnership.

Picking up the option and swinging a trade works out well for everyone involved, as the Cubs get Hamels for what is essentially only $13 million in actual money and something like $14.65 million AAV (his hit minus Smyly’s). The Rangers, who were expected to play in the small financial sandbox this winter, get a lefty starter with a very reasonable contract.

Smyly was going to be squeezed big-time on the Cubs’ staff since he was the very definition of redundancy. And as a lefty swingman with just a single year of control, he wasn’t incredibly valuable as either a pitcher or a trade chip. This gives him a chance to start and perhaps prove himself worthy of a bigger deal for 2020.

Take my calculations here with a huge grain of salt because I’m doing them off the top of my head, but I think think puts the Cubs somewhere around $222 million in commitments for next season. So moving Smyly drops them under the first tier of CBT penalties that kicks in at $226 million. Being above the $206 million threshold results in a 20 percent tax on overages, but going between $20-40 million over subjects a team to an additional 12 percent surtax.

The big whopper is going over $246 million, which would result in a team getting a 42.5 percent taxation on overages and having their first draft selection moved back 10 spots. I don’t believe the Cubs even want to get near that level, so any run at Bryce Harper would have to see them lop as much as $20 million more from the books. And that’s without adding other free agents or making deadline acquisitions.

Again, my numbers could be off a little so this is all somewhat apocryphal. What we know for sure is that Cole Hamels remains in Chicago and Drew Smyly will pitch for the Rangers.

***Update***

The deal officially includes Smyly and a player to be named later for another player to be named later. So it sounds as if the two front offices made something of a deal that basically allowed the Cubs to keep Hamels while also allowing the Rangers to get something back in return for little more than they’d have paid on Hamels’ buyout. The PsTBNL probably won’t amount to much, though some of that could depend on how Smyly pitches this season.