Signing Bryce Harper Would Cost Cubs Around $20M in Penalties

Let’s imagine Bryce Harper suiting up in a Cubs uniform alongside Kris Bryant and the rest of the crew. Pretty fun, right? Maybe it’s not as fun to imagine for Tom Ricketts, who would pay a hefty luxury tax penalty to bring the generational talent aboard.

Right now, the Cubs’ estimated payroll for 2019 is roughly $222 million. If Harper is signed for something like $35 million per season, the payroll jumps to $257 million. Sprinkle in a few other moves and account for some variance, and the total figure for 2019 would probably be somewhere around $266 million, maybe more.

So how much money would the Cubs be paying in 2019 if Harper is brought in for next season and beyond? The answer is something around $54 million, which includes his potential record salary plus luxury tax penalties accumulated by going over each of the three thresholds.

TAX THRESHOLDS Penalty Cost ($M)
Tier 1 Penatly ($206M) 4.0
Tier 2 Penalty ($226M) 6.4
Tier 3 Penalty ($246M) assuming $266M payroll 8.5
Total 2019 cost for Harper 53.9

There’s also the matter of seeing their first pick in the draft dropped by 10 spots, through the difference in projected value of such a penalty is minimal. None of this is to suggest the Cubs shouldn’t pursue Harper, mind you, it’s a simple exercise in trying to determine what the total actual cost would be next year.

After 2019, however, the Cubs may gain a little financial flexibility and might not have as big a luxury tax hit. The real question becomes whether ownership wants to pay the surcharges and fees in addition to a payroll that’s already increased compared to recent seasons.

Clarification note: Consider the $20M estimate is the total penalty assuming the Cubs pay $265 M next season. Since the Cubs are already at $222 M, the specific amount of penalties against the Cubs caused by Harper’s signing would be about $14-16 M.

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