Cueto's decision puts Giants in sticky situation with luxury tax


SAN FRANCISCO — Johnny Cueto’s camp waited until the final moments Saturday to announce that Cueto would not be opting out of the remaining four years on his six-year contract. Cueto had hoped the Giants would tweak his deal, perhaps guaranteeing his 2022 option or adding a no-trade clause, but general manager Bobby Evans said this week that there were no negotiations. 

The contract stayed the same, and Cueto chose to honor his original pact, surely knowing that he couldn't hope to get $84 million guaranteed after a down year that included elbow discomfort and lingering blisters. For the Giants, Cueto’s decision locked a potential ace back into their rotation -- and they're happy about that -- but it also set off another round of meetings. 

Brian Sabean, Bobby Evans, Bruce Bochy and the rest of the brain trust planned to spend the early part of this week waiting to find out just how much leeway they have to add to the roster. It’s a call made at the ownership level, and after three straight years of paying the Competitive Balance Tax, there are many in the organization who feel free agency is not the best way forward. 

“Obviously it’s a big piece of the puzzle,” Sabean said of the payroll number. “(Cueto’s opt-out) wasn’t a coin-flip in our minds but you have to be prepared for the worst. Now that he’s folded in, it’s a big number to fold in. (This week is) critical to map out what our threshold is. We don’t know the answer to that. We do have some preliminary thoughts and ownership has passed on some of their guidelines, but it’s going to take a session with Larry (Baer) and Bobby and myself.”

The front office had a strong sense of the math coming into free agency, but the numbers weren’t finalized until the last week, when Cueto made his decision and the team officially picked up 2018 options on Madison Bumgarner ($12 million), Matt Moore ($9 million) and Pablo Sandoval ($500,000). 

The Cueto, Bumgarner and Moore deals mean the Giants now have 10 players scheduled to make at least $9 million. The tax numbers are a bit different because it counts an average annual value of your entire deal, but that total isn’t any prettier. 

According to numbers compiled by Cot’s Contracts, the Giants already have a tax number of about $187 million when you account for arbitration-eligible players, the remainder of the 40-man roster and benefits that are included in the final tax number. That leaves them only about $10 million of wiggle room until they hit the tax for a fourth straight year, which would continue to penalize them in multiple facets of team-building. They also would again be taxed a 50 percent penalty on any dollar over the $197 million limit. 

You can see why it’s such a sticky situation. Bringing Nick Hundley back as the backup catcher would wipe out a chunk of that remaining room. The Giants want to add a veteran lefty reliever, and that player would also just about put them at the tax. This is why Sabean again hinted Monday that the best route might be a trade, where the Giants could potentially pick up a pre-arb or early-arbitration center fielder who won’t cost more than a couple million. 

As for third base, the need for power, the bullpen, the bench … well, it’s a tough puzzle unless the Giants are willing to blow past the tax number, and over the last year team officials have indicated multiple times that they’re hoping to dip under at some point soon and reset their penalties. 

“It’s complicated because we admit after a 98-loss season that we do have some glaring weaknesses,” Sabean said. “More and more you play the shell game. There are certain things that are musts (to acquire). We’ve met over and over again and tried to shrink what we can control.”

Contact Us