Cubs May Actually Gain Around $1.6M by Releasing Colin Rea

When it was announced that the Cubs had released potential fifth starter Colin Rea, the primary motivation given was that they were allowing him to pursue an opportunity in Japan. Sure enough, the NPB’s Softbank Hawks recently announced an agreement with the righty. Terms of the deal were not disclosed but will have a greater impact on the Cubs than just pocketing Rea’s surplus.

He was only due to earn $702,500 in 2021 and the savings come out to less than $600,000 once termination pay of 30 days of salary (~$115K) is removed. But as pointed out by Arizona Phil at The Cub Reporter, probably the foremost authority on all manner of procedural details, the Cubs are coming out much better.

When a player on an MLB 40-man roster is released so that he can sign with an NPB (Japan) or KBO (Korea) team, the MLB club typically receives a $1M release fee from the NPB or KBO team.

 

So the Cubs will have to pay Rea 30-days salary (about $115K) as termination pay when he is released, and then the Cubs would very likely get $1M from the NPB team, and then the Cubs can re-allocate Rea’s $700K 2021 salary (minus the $115K termination pay) elsewhere, which amounts to about $1.585M available in 2021 MLB payroll after the smoke clears. 

With the team looking to load up on as much starting depth as possible for as little payroll as possible, the $1.6 million or so they net from Rea’s release could cover the cost of two new pitchers. Is it pathetic that the Chicago By-God Cubs have to operate that way? Yes. But it’s also a pretty shrewd move given what we know about their current situation.

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