In his latest column, Jeff Passan of Yahoo Sports takes a lengthy, thought-provoking look at what has been a downright glacial free-agent market unlike any seen in MLB history. To date, no free agent has agreed to a contract guaranteeing more than three guaranteed seasons, and the vast majority of top-tier free agents remain unsigned with roughly a month to go until pitchers and catchers report for Spring Training.
If this sounds familiar, perhaps that’s because Passan tackled the general issue months back, when a slow-down was already apparent. Of course, the plot has thickened in many ways since, even as some free agents have signed in the interim. We took our own look at his arguments at the time, and will do so again here.
So, is there evidence of collusion? Is the luxury tax line effectively creating a salary cap of sorts? Are factors unique to the 2017-18 market really an explanation? What’s really at play here? In many ways, it’s all still uncertain, but Passan argues that the slow market primarily about broader structural changes that have redounded to the benefit of teams — particularly, perhaps, a system of player compensation that no longer aligns with the realities of the game.
Let’s start with the concept of collusion. Unsurprisingly, Major League Baseball issued a staunch denial of any such notion in a statement to Passan that interestingly targets one very notable agent (more on that further below):
“There are a variety of factors that could explain the operation of the market. We can say that without a doubt collusion is not one of them. It’s difficult to pinpoint a single cause, but it certainly is relevant that an agent who has a long track record of going late into the market controls many of the top players.”
Certainly, there’s no clear evidence of collusion that has been cited to this point. As Matthew Trueblood of Baseball Prospectus argues, there are a few questionable data points on the market, but still no definitive proof of price fixing — in large part because we don’t yet have the full context necessary for interpreting what has occurred to date. As Passan has explained previously, uniformity in team valuations can perhaps create a fairly consistent line in the sand at a certain number of years or dollars for a given free agent. Really, who’s to say whether that — standing alone — represents active collusion, some kind of passive collusion, or simply standardized analytical processes?
It isn’t as if we have yet observed bunches of players settling for contracts far below their market values. To the contrary, while years have been on the light side — no deals have gone past three guaranteed — the overall earnings have been as robust as MLBTR generally expected for those players that have signed to this point. While Addison Reed recently fell well shy of his predicted value (we don’t really yet know why), others, such as Tyler Chatwood and Tommy Hunter (to take but two examples), have received quite a lot more than expected.
As for the still-unsigned players, we just don’t know yet, and what little information we have seems inconclusive. Passan says that “one of the best free agents” feels the offers he has received are “so incompatible with his production” that he might wait until mid-season to sign. Without more information — who? how much? what would he deem fair and is that supportable? — that example really can’t even be assessed. An assistant GM tells Passan he’d rather pay Lorenzo Cain at a big rate ($24MM) for one season than promise him a longer-term deal. That’s an interesting and somewhat curious position, as Cain projects as a quality asset for a few years into the future, though it’s tough to assess without knowing the full context. More to the point, that view from one executive on one team hardly establishes the absence of a reasonable market for Cain.
Asking prices and expectations don’t always coincide with results in free agency. For every surprisingly large contract, there’s typically a supposed bargain. There was perhaps more talk than ever about lofty asking prices for free agents entering this offseason. Over the last several months, there have been reports of asking prices of $200MM or more for J.D. Martinez, Eric Hosmer, and even Jake Arrieta — rates that hardly seemed achievable at the outset of free agency. Players like Alex Cobb and Lance Lynn were both said (at some point, at least) to be seeking nine-figure commitments and/or $20MM annual salaries. We recently addressed just this subject with regard to Cobb, who never seemed likely to command that sort of deal and appears to be receiving some interest within range of what might reasonably have been anticipated entering the winter. Some have suggested that outfielder Jay Bruce was forced to settle for his three-year, $39MM deal, but that’s exactly the contract we predicted back in November.
Passan identifies ten teams that will or may sit out this free-agent period, suggesting that “players are panicking” in the face of the situation. But it isn’t exactly unusual for a variety of teams to forgo significant open-market spending in a given year — for instance, as of February 1, 2016, ten teams had spent $12.25MM or less — and few of the listed clubs seemed to be in position to go for broke in free agency before things got underway. Further, some of the organizations he lists (the White Sox, Tigers, and Athletics, for instance) have already spent at least some money on mid-level free agents. Others (the Royals and Padres) have reportedly offered nine-figure contracts that have helped establish the market for Hosmer. Still more (the Braves seem like a possibility) could still dangle multi-year deals in the right circumstances.
On the whole, while the market hasn’t yet produced nearly as many contracts as is typical at this point on the calendar, it seems premature to presume that this is the beginning of a lasting trend. There’s little question that this is a highly unusual market environment, but just how that’ll shake out simply cannot be known. Even if the result is a lesser overall outlay for the current crop of free agents, moreover, there’ll still be room for interpretation and ongoing developments regarding what it all means going forward. None of that is to say that all players or all agents are setting unrealistic starting points or targets — or that, in fact we aren’t about to see a massive shortfall in anticipated free agent spending. That could yet come to pass.
Even without the benefit of knowing how the market will line up, though, there’s plenty more to chew on here. Passan focuses particular ire on the concept that the new CBA’s luxury tax provisions have created a de facto spending cap. He argues that the actual penalties embodied in the CBA spending provisions aren’t that significant, calling the tax “a well-branded pretext for teams not to spend.”
The point is well-taken, on the one hand: it serves as a comfortable reference point when teams need to explain why they’re suddenly clamming up. For many organizations, though, that level of spending is so far from actual payroll levels that it doesn’t even enter the picture. And it isn’t as if the biggest spenders can’t afford to pay some taxes, as they have in the past.
Still, is there legitimacy to teams wanting to dip beneath the line? If so, what does that tell us? Passan says that limboing under the luxury tax for one year and then jumping back to a $246MM payroll would save the Yankees and Dodgers “only $12 million in luxury-tax penalties.” But his approach — simply comparing the hypothetical 2019 tax rate between scenarios in which these organizations do or do not end up over the luxury line in the prior year — seemingly ignores a few other factors. Since the tax rate rises with each consecutive year in which the line is passed, there’s more than one future season of payroll to consider. Plus, the new CBA includes a surcharge on exceeding the tax by more than $20MM (12%) and exceeding it by $40MM or more (a whopping 42.5% plus a loss of ten places in the first-round draft order; 45% on the second consecutive time). As ESPN.com’s Buster Olney notes on Twitter, the Dodgers and Yankees “might have a $100+ [million] incentive to get under” for one year, all things considered.
Still, the general point regarding the luxury tax seems to be correct: it isn’t the sole or even a major cause here. But it is a factor, especially as a part of several other somewhat one-off considerations that may be lining up to make this a unique offseason. Given the history of spending from the Yankees and Dodgers (to say nothing of the Giants, who are engaged in their own staredown with the CBT threshold and reportedly prefer to remain south of that $197MM mark), it could be this really is mostly a one-year dip. Taking those teams out of the top-level market-driving position, perhaps in part as they anticipate chasing younger, better free agents next winter, could have a major short-term impact without necessarily indicating that the balance of power has shifted for good against players.
How about that other factor that’s popularly mentioned and which the league itself (rather remarkably) suggested in its statement? On the one hand, it’s probably too neat an explanation to say simply that the Boras Corporation is holding things up. While Scott Boras is notoriously willing to run the clock, he doesn’t exactly make a habit of negotiating well into January and February; to the contrary, he usually isn’t forced to drag things out, as Passan notes. And he does represent a huge number of this year’s free agents, including top-tier names like Hosmer, Martinez, Arrieta, Mike Moustakas and Greg Holland in addition to second- and third-tier free agents such as Carlos Gonzalez, Carlos Gomez, Tony Watson, Matt Holliday and Jayson Werth.
While it seems hard to believe he’s single-handedly responsible, Boras is reportedly sitting on big offers for Hosmer and Martinez that seem at least to approach the bounds of expectations when the winter started. Those players are well within their rights to wait and seek more, but the figures they seemingly have in hand to this point aren’t unexpected. And the fact they haven’t taken deals yet does hint at the influence of Boras to some extent. For his part, true to form, Boras provided Passan with a cheeky analogy to express his position: “I wouldn’t blame the baker if the flour doesn’t show up.”
In mixing the free agent batter, Boras and his compatriots on the agency side do seem to be running into some unexpected interference, too. But what’s the root? Another somewhat unique circumstance that may be impacting this year’s market is that identified by Dave Cameron (formerly) of Fangraphs: with fewer than ten teams currently projected to run roughshod over the remainder of the league, there’s a lack of incentive for win-now spending from mid-level organizations. That, in turn, helps decrease the need for the top teams to maintain their edge through spending. It’s a phenomenon that is not entirely dissimilar from what we’ve seen at the non-waiver deadline, where Wild Card contenders are at times reluctant to make significant splashes knowing the endgame to be a one-game playoff.
Passan does recognize a few of these factors, but perhaps views them in a different light. He says that “33 percent of baseball teams declare themselves unwilling to spend and others still pronounce themselves unfit yet to win,” suggesting that modern baseball’s emphasis on wise spending also serves as an excuse not to try to win. He contends that the preference to trade, rather than to sign mid-level free agents, has “almost destroyed baseball’s so-called middle class of veteran non-stars.” (Counterpoints come in the form of Chatwood and Bruce, among others.) One GM told Passan: “Why would I pay a guy now when I can trade for one every bit as good in July and give up almost nothing?”
While there’s likely some structural element to all this, it’s difficult to simply reject the unique circumstances of this winter out of hand. We don’t always have an abundance of what Cameron calls “super teams” — at least, that is, not until some big-market bullies have gone out and bought up the best veterans. With so many teams entering the winter with already impressive arrays of talent, along with the other circumstances discussed above, the stage was perhaps set for a slow-down that could stand apart from any broader forces.
As we suggested back in November, if there is indeed a broader force at play that strongly explains what we’re currently seeing, perhaps it’s the ongoing youth movement that has occurred since the steroid era. The fact that more on-field value is coming from younger players suggests a reason that older, mid-level players are encountering a market that isn’t interested in promising many years. After all, as more teams are able to find equivalent production from within at a cheaper rate, future roster spots may be increasingly anticipated to be occupied by current prospects.
Many of the points Passan makes touch upon this very factor. Sources on both the league and union sides tell him that the free agent model (six years of service before the open market) is simply outdated. He spends considerable time discussing the union’s blind spot on this subject in recent CBA talks. The MLBPA focused on lifestyle changes while letting the league have a hard cap on international amateur spending, doing nothing to boost spending (some would argue the contrary) in setting luxury tax rules, and (we’d add) failing to do anything to boost significantly the earning capacity of pre- and mid-arbitration players (save for some nominal increased to the league’s minimum rate of pay).
Of course, it’s also worth emphasizing that the union went to great lengths to revamp the qualifying offer system in an effort to scale back the reluctance teams had expressed when weighing the pursuit of players who’d rejected the QO under the previous CBA. That was a significant talking point both in the media and at the negotiation table as the MLBPA sought to eliminate instances of players being “forced” to settle for short-term deals due to the burden of draft-pick compensation. Just how well that worked is not yet fully clear thanks to lack of data the slow-moving offseason has provided, though Carlos Santana and Wade Davis had no issues finding healthy contracts that beat most expectations — at least in terms of average annual value.
The union’s assumption, presumably, was that open-market spending would continue to support the size of the players’ pie slice, particularly with lesser penalization issued to teams seeking to sign players that had performed well enough to receive a QO. In turn, the MLBPA undoubtedly hoped that said slice would continue to be allocated to the best veteran players (even if their more youthful brethren will be expected to produce more value on the field in the years to come). While the offseason has clearly not played out in that fashion, current calls for wholesale changes to the arbitration system and service time requirements for free agency weren’t pushed as hot-button topics on which the MLBPA needed to focus — at least not to the extent that changes to the QO system were underscored as a critical need.
While the general situation could set the stage for a labor conflict over the coming years if these trends continue, as Passan suggests, there’s probably also room for developments to push back in the other direction. The union might press back before it reaches the point of labor unrest. Some of the unique circumstances on this year’s market may ameliorate the situation. Of greatest interest, perhaps, is the possibility that the inefficiencies created by aging curve trends will begin to resolve. The market has already shown some means of adaptation, as with the advent and increasingly frequent use of opt-out clauses. Some very youthful free agents are expected to hit the open market in the seasons to come, with age still well on their side in no small part because they were promoted early and were able to resist extensions by locking up plenty of money through arbitration and endorsement deals. These players will still have ample opportunity to land massive contracts.
There could be a trickle-down effect for extension scenarios, too. If teams forgo mid-level free agents, they’ll be giving more time and opportunity to younger players, who’ll in turn reach arbitration eligibility and free agency sooner. Teams will continue to search for extension bargains, as ever, but there’s no particular reason at this point to think that’ll be a problem so much as a further opportunity. Passan says in a somewhat accusatory manner that “every team tries to sweet-talk its young players into under-market long-term contracts that delay their free agency, leading to a paucity of 26- and 27-year-olds in free agency.” That’s a hardly a new trend, of course, as John Hart-led Indians largely pioneered that practice roughly a quarter century ago.
While the examples like Jose Altuve, Christian Yelich, Paul Goldschmidt and Madison Bumgarner are among the many team-friendly deals, there are also plenty of examples that turned into largely sunk costs. Jon Singleton, Cory Luebke, Jose Tabata, Allen Craig and Devin Mesoraco all provided little in the way of long-term value on their respective early deals, whether due to poor performance or persistent injuries. And let’s not forget that Houston reportedly tried and failed to give money to players such as Matt Dominguez and Robbie Grossman.
Other top stars have, to date, resisted the urge to take money in exchange for giving up their rights to the open market. If players like Carlos Correa, Francisco Lindor, Kris Bryant and Mookie Betts won’t rush into extensions, then they’ll hit the market at young ages with huge earning potential — as, of course, Bryce Harper and Manny Machado will next winter. If those players continue on year-to-year paths, teams hoping to find value through extensions may need to promise more money and years than they’d prefer to mid-level players, which ought to be beneficial to players in such uncertain situations.
Furthermore, younger stars that do ultimately accept long-term extension offers could very well see those markets move forward if teams do indeed begin to cut back on investments in aging free agents; Lindor reportedly received and rejected a nine-figure extension offer last winter. That would’ve crushed Andrelton Simmons’ $58MM pre-arbitration record for a player between one and two years of service time.
Turning back to the immediate market, though, it does still seem possible that some of this winter’s free agents will be caught in the middle of these broader forces. But it should not yet be assumed that there’ll be a far-reaching spending drop in the form of a permanently changed free-agent market (even if this year’s overall market falls well shy of reasonable expectations). The market for baseball players is highly susceptible to change from nuanced, often uncertain variables. We ought to see how they all play out before passing final judgment.
If its a trend, Im gonna need to reevaluate my life, lol. Winter sucks enough in Philly with the weather and if I cant have my baseball transactions either I dont know what Im gonna do.
Personally, I don’t think it’s a “trend”? I think it’s just that FOs are paying attention to the aging curve now, which scrutiny has been brought about by the horrible deals like FIelder, Howard, Zito and several others, and the perception that the players in question are not worth the money for which they are asking.
You just described a trend…”a general direction in which something is developing or changing.”
But his untrend, which is currently trending, is spot on.
Let me elaborate: If i had to guess I would speculate that next year’s FA class gets paid handsomely and earlier, meaning this may be a one-year issue.
I just think that this year’s class isn’t as good as this year’s class think they are.
Mous, Hosmer, JDM et al. are nice players, but they all have their issues and teams obviously don’t value them as highly as they do themselves.
Also, Boras tries to push the envelope – all agents do – but with this particular group of players I’m not sure that teams will pony up.
Martinez has had a great run, but he’s headed to what is normally a decline phase, he’s been injury prone. and he can’t play defense despite what he may want (and it’s an obvious attempt to try to get more money).
I’m not a GM, but I wouldn’t give him an AAV of $30MM – not for a guy who is only on the field for 2/3 of a season and will wind up being a DH.
I hope it’s a trend. The contracts are getting out of control and they make it really difficult for a lot of franchises to compete.
This has been an incredibly boring and painful offseason but I hope it’s a sign of a correction in the market… where players and agents reel in some of these absurd demands.
Every time we think Boras is losing his grip he still gets the deals he wants
On the Max Scherzer and Chris Davis contracts Boras deferred money far into the future, more than a decade, allowing him to claim a victory when in reality the actual current value of the contract is lower than his claims.
It will be interesting to see what happens with his clients this year.
If I were a free agent who received a five-year offer at a 5-10% higher AAV without deferrals or a six-year offer at a 5-10% lower AAV with deferrals, I would take the extra guaranteed year every single time. By the time the contract expires, I am very likely to be either out of baseball entirely or barely hanging on via one-year deals that pay about 15-30% of what I used to make. One extra year at the high AAV, plus five years of deferrals going forward, seems like a much better deal to me.
What if you could get an extra 20% AAV on that 5 year deal – meaning it is the same money as the 6 year deal – ,but part of the money is deferred and paid out over the 4 years after the contract ends?
Anamoly. It’s not everyday two of the best players of our generation (Bryce Harper & are Manny Machado) are scheduled to be Free Agents, after next year— the 2018 season— at an incredibly young ages.
Furthermore, those 50 percent luxury tax penalties for repeat lux tax payers, being reset to 20 percent, after getting under $197M luxury tax threshold ONE TIME, only made matters worse, with regards to FA market activity.
Harper is overrated and the team that signs him will regret it, just check out the image that pops up when you google him, that guy is looney toons.
Anomaly* Sorry about that.
Disagree on Bryce. Only thing looney tunes, is the haircut lol
But the talent, is unquestionable.
How many teams are realistically in on either? Five? What about the other 25 teams. Also, both have been rather inconsistent players due to injuries.
The reset of the LT for a team that signs a Harper and then goes over the LT by 20 million the next 2 years saves them all of 10 million dollars. Boy have you swallowed the cool aid
See recent LAD-Braves trade?
Also, it’s the only thing Hal Steinbrenner’s been feeding us, since he took over the team. Sure, he pulled of the Stanton trade, but Yankees still sit below the the tax line (for the first time, since its inception)
This is the first year, Hal’s followed through. Why?
Only Reason Sox are only ones spending $$$ on JD, is because they already reset it last year, with Buchholz trade — if I recall correctly.
Except the Dodgers and Yankees look poised to run with payrolls in the $250+ million range, making the savings closer to $25 million, or roughly one year’s salary of a superstar like Stanton. Getting a superstar’s production for free is a pretty big deal.
Trend, however I expect next off season to be an outlier, with the exceptional youth hitting the market. It may even be the cause. All the teams trying to get under the luxury are gearing for a spree next year.
The culprit is clearly the new luxury tax, and since the new luxury tax system is not going away, neither is this trend.
Player salaries are unrealistic. The owners don’t pay or offer the perks to their top execs to run their highly profitable businesses that they pay to a mediocre utility baseball player. $5M/year is absurd much less $25M/year for a borderline all-star.
This was predictable as soon as the new CBA was signed.
The next step will be 6-8 teams going well over the luxury tax thresholds next season creating a super league while the other 22-24 teams become a AAAA within MLB.
If those AAAA teams pare down their spending enough it could finally be the impetus to get a salary cap and floor system.
I think the NHL system would work just fine in MLB. It has a hard cap and floor. Players are restricted free agents after 3 years. UFA after 7. Cap hits are based on the average salary over the deal. Contracts are guaranteed and cannot be renegotiated. Players get a fixed % of revenues.
Trend, the contracts are terrible. It used to be, “if we don’t sign such and such, someone else will.” Now, GMs are hoping other GMs sign an Albert Pujols like deal.
It would be pretty easy to fix the current arbitration system. Pay players more in the minors. May them more during their first six years.
The 5-7 year deals have almost universally not worked out. Teams are realizing that many players don’t perform into their mid-30’s. Look at all the years the Dodgers paid Carl Crawford to not do much of anything.
Carlos Santana and Tyler Chatwood have signed for more than projected. If Arrieta, Hosmer, Martinez, et al were willing to take 3-4 years I’m betting the AAV would be what’s expected. If the amount spent isn’t less, what’s the complaint?
The luxury tax is causing a few teams at the high end to spend $197 million instead of $217 million. Is that really the complaint? That the top spenders who are already spending money aren’t spending enough? One problem is that teams like the Tigers and the Phillies are rebuilding. Rebuilding teams used to spend anyway but that’s changed.
Just for the record, it was Boston who gave Crawford that huge contract. The Dodgers only toook on that dead money as part of the price of getting Gonzales. Still it’s worth asking who would make a trade like that now.
Interesting read.But what aboutthe minor league free agent market? It seems to be as slow as the major league one and it got nothing to do with big spending…
I think the minor league free agents are indirectly related. Most minor leaguers want to sign with a team where they have the best opportunity/ best chance for time in the major leagues, but it is hard to judge if major league players haven’t signed. For example, if JD Martinez did decide to sign with the Boston Red Sox, unless he gets injured, it is less likely an outfielder on a minor league contract would get a shot with them in the majors.
When you ask about the minor league free agent market are you talking about actual minor leaguers or Major Leaguers signing minor league deals? I don’t think minor league free agents have had a slow market. Teams have signed them.
I don’t know if it’s slow for big leaguers who get minor league deals, but if it is it’s likely because more established free agents haven’t signed. If you think you might sign a big league free agent you might not need someone on a minor league deal.
A lot of factors are playing into why such a slow offseason in baseball and most of it is the top free agents with the exception of Hosmer (27 yrs.old) & Moustakas (29 yrs.old) the rest are early 30’s and therefore the length and money is working against them. Another thing going against this crop of group is in reality which one is a difference maker that will take your team to the top? There are a lot of holes in this year’s free agent class and most are not worth 20 million-30 million as some are requesting. I mean Alex Cobb looking for 20 million? Arieta is restricted to the NL if he comes over to the AL he will be killed, Hosmer would have been a good bet for the Red Sox at a good price but if he goes to the Padres in that spacious park he is not worth then $25 million a year.
Then the next issue is most are looking at next year’s class which will far outweigh this class and then some so most teams would rather just try and gut it out for a year and try their hands on Manny, Harper, Donaldson etc
Finally metrics is also ruining the game when you have Brian Kenny gushing at the time for Jason Heyward at $184 million we have something wrong in baseball. Yes defensive players can help a team win a game but when you start paying all glove and no bat at $28 million last year and this year (Houston we have a problem) no defensive gloveman should be worth even close to $12mil-$15mil at most. Yankees had Cashman who favored Chris Carter because of metrics and Joe Girardi who didn’t want him to play goes to show how the Gm’s mind has evolved.
Personally I think that too many people when they look at the Heyward contract only see him as a defensive player. It is easy to look back now after two subpar seasons and bash it (and for the record I thought it was an overpay then too), but let’s look back at Heyward’s offensive numbers back before he signed:
Age 20 atl ops+131
21 , atl 93
22, atl 117
23, atl 114
24, atl 104
25, stl 117
So each season except one Heyward was a better than league average hitter, and his sophomore year he was almost league average. Heyward was young with upside and seemed to be a perfect fit for Chicago. They also wanted to pry him away from the rival Cardinals (with whom he had just had a great season). The Cubs took a GAMBLE, one to this point they’ve lost badly since Heyward has been a shadow of his former self (ops+ of 68 and 85). Yes, it looks horrible now, but they thought they were getting a different player than the defensive specialist that showed up the last two years.
The Cubs gambled on a young player, with upside to play great defense AND be a better than league average hitter. Heyward has failed to live up to that. It isn’t the fault of sabermetrics because the data did show who he had been. There was no way it could have predicted this sort of bottoming out.
Without question, this is a trend and there is enough data out there to prove it. We’ve all seen it with our own eyes over the last year or two. Fewer and fewer contracts. The truth is, the market no longer supports the current compensation structure. Players are way overpaid. Way, way, way, way overpaid and there shouldn’t be any debate about it. We’ve seen players (Cano) comes to mind, leave the best possible environment for himself for perhaps the least ideal for more money and really no one wins. This just continues to happen. At some point we hit a ceiling. Perhaps the only winning contract that remotely stands out that has worked out in its entirely was the Matt Holiday contract with the Cardinals. I mean, I sometimes wonder any other player that can say that? Maybe the original Jeter contract from 01 for 9 or 10 years. Overall, was a good value and he played the entire time (defensive debate aside). Who else?
A player like JD Martinez honestly shouldn’t cost more than $60mm over 4 years. You can use whatever valuation you like, but that’s his value No more, no less than say Victor Martinez a few years back. Plenty of other comps too..
I definitely agree that owners let salaries escalate too quickly and that this is the market normalizing in a way.
The owners don’t control salaries. If they did, that would be collusion.
Each individual owner controls the total salary he gives his team to work with, just like any business unit has a salary budget they work with. In most cases the owner wouldn’t necessarily get involved with individual contracts but most certainly they control what is spent for their team.
Only for their team. Otherwise they participate in a market for players that is set by all the teams bidding for free agent services. No one team can control salaries. They can only choose to not participate in the free agent market, but even if they do, their behavior restrains only their spending, not what other teams are prepared to spend. So it is pointless to talk about what the teams have allowed unless you are also talking about them working together to restrain payroll growth. And if that happened, it would be collusion.
I said owners because as I simply stated above each owner basically controls the payroll for their own specific team. So I’m sorry I confused you with my initial post and wasn’t specific enough by saying something along the lines of “each individual owner let salaries for their team escalate too quickly”. By NO means was I implying collusion. I still have difficulty understanding how you took it as such.
Collusion is when a group secretly meets and works together to do something illegal in order to accomplish a common goal. It would involve sharing detailed and data that is generally private (in most cases, such as actual offers made, but not accepted by free agents). I see absolutely no definitive evidence that is likely happening.
And your wrong that no team can control their own salaries. They all have individual budgets and even you admit that they can stay away from free agency. You do realize that when demand drops, prices should follow right?
If I’d said that no team can control their own salaries, I would be wrong. But of course I never said anything remotely like that. In fact, I said the just opposite. I also wasn’t trying to present any evidence of collusion because I have none and don’t suspect any. So you are welcome to respond to a point I’ve actually made here or elsewhere.
Totally biased but I think Adrian Beltre would be one of the contracts that (at the time) was fairly hefty that worked out well.
There should be a salary floor and less incentive in the draft for teams to tank, like randomize the top 10 picks.
Why?
No offense, and I could have picked from bunches of posts along the same theme as yours. I don’t see anything broken. Some teams are haves, some teams are have nots. All players get paid, but some players just get paid more. What is wrong about that? It seems like any other workplace.
Bernbabybern, I was looking for the motivation behind your ideas. We’re you intending to help the owners? The players? Or the fans?
I don’t understand how that idea is helping the game.
There isn’t a major incentive for teams to tank as there is in the NBA. While the 1st pick has historically been better than other picks, there hasn’t been much difference between any of the other picks in the top 10.
MLB made the international allotment independent of a team’s finish, so that isn’t an advantage any more.
To me I don’t see the system as being broken in any way. Contracts for awhile were given out without sufficient data on how the long term deals for older players would play out. Now teams are being more cautious and have more analytical data available to them. The game has evolved and now the way free agent contracts are handed out is evolving.
Then you combine that with two players who should be hotly pursued next off season (Harper and Machado) despite requiring huge deals to land and you have the big spenders holding their wallets for now. You also had the pirates and Marlins further complicating things.
I love this.
Trend. A team like the angels are going to get beat into the ground by the Astros for the next 3 to 4 seasons as the pujols contract expires and Carlos Correa hits free agency I think more teams will look for the next Carlos Correa rather than paying a shortstop $45 million AAV for the next 10 years… of course, there will be a bidding war between some teams, but the majority of the market sees homer Bailey deals and asks themselves “how can we operate more efficiently?”
owners figured out that long term deals weren’t paying off.
30 separate owners figuring it out at the same time shortly after their last owners meeting sounds like collusion to me
Then you need to look at the definition of collusion. If 30 owners saw that it was raining outside and opened umbrellas when they left the building it wouldn’t be because it was a strategy they cooked up. It’d be because it was a smart way not to get wet.
This strategy didn’t start this year. It actually started last year. Only 3 players got more than 4 year deals. Jansen got the fifth year from the Dodgers because they really wanted to keep him. Chapman got it because Jansen set the market for relievers. Ian Desmond signed early before the Rockies realized his deal was way above market.
No one noticed there weren’t long deals because the free agents weren’t that big. Many of the top free agents got less years and dollars than MLBTR predicted, however.
Maybe. But it seems we might be underestimating the impact of several of the largest-spending teams simultaneously facing the luxury tax reset threshold. The disincentive to go over that number is pretty strong but once the reset occurs the incentives will shift more towards spending. We’ll know better a year from now whether the owners have figured out anything else beyond not wanting to pay the penalty at the highest rate.
While it’s true that some high spending teams aren’t signing free agents to big contracts look at the ones who are.
The Red Sox gave Mitch Moreland two years and now are rumored to be offering J.D. Martinez 5 years. I assume that’s up from what they were willing to offer, as negotiations work toward each other. The premiere free agents (Choo, Heyward, Fielder) often got 8 years. Boras was seeking 7.
The Phillies were a big spender and, one assumes, could be again. The argument against them spending is that spending in 2018 is a waste of money but spending 2019 or 2020 and beyond wouldn’t be. The Phillies would seem to benefit more from longer deals rather than shorter ones. Yet they signed Carlos Santana for 3 years.
They also signed him for $5 million more per year than projected. It can be argued they also paid above market for Neshak and Hunter and that caused reliever contracts to go higher than expected.
This website predicted Tyler Chatwood would get 3 years and $20 million. He got 3 years and $38 million. They had Jay Bruce at 3 years and $39 million. That’s what he got. They said Cozart would get 3 and $42. He got 3 and $38. They had Wade Davis at 4 and $60 million. He got 3 and $52 million.
It may change with the top free agents but thus far free agent salaries haven’t dropped. I think that if the remaining free agents would take 3 year deals their AAV would all exceed the MLB TR predictions.
Salaries aren’t going down. Owners are wising up and not wanting to pay players for seasons where they may not be worth it. The 2015-16 free agent class got huge contracts for Chris Davis, Jordan Zimmermann, Wei-Yin Chen, Alex Gordon, Ian Kennedy, Johnny Cueto, David Price, Jason Heyward, and others. Many of those deals turned bad immediately. That, apparently, was a huge wake-up call.
Very doubtful that teams have suddenly “wised up.” Teams have known for a long time that lengthy contracts seldom make economic sense in the out years. Those are burn years in a great many cases, but that’s the price of doing business for the teams that can afford it and hope to be competitive. Trust me, team owners fully understand how to evaluate the costs of doing business. I’m not sure I see the reason to resist the idea that the luxury tax reset is a major factor influencing how the big-spending teams are behaving this offseason, when that was exactly what it was supposed to do, and the evidence for it having the desired impact is pretty overwhelming.
The luxury tax is a major factor influencing how some of the big-spending teams are behaving this offseason, but that’s not relevant to whether the contracts that are signed are below market or for shorter terms.
Carlos Santana, Tyler Chatwood, Wade Davis, and others have actually signed above market deals. If the Dodgers or Yankees being concerned about the luxury tax had an impact the deals would be below market.
The Dodgers haven’t given out a contract longer than 3 years to another team’s free agent since Brandon McCarthy 3 years ago. And that was just a 4 year deal. The Yankees gave out two 4 year deals in 2014, none in 2015, and one in 2016. And that was 5 years.
So those teams weren’t inclined to give out 5-7 year deals before the luxury tax was a deterrent. I doubt they’re that interested in doing that now. The Red Sox and Cubs aren’t worried about the luxury tax but neither seem interested in 5-7 year deals. It’s telling that the Cubs signed Chatwood to 3 years above market rather than give 5-7 years to another pitcher. They might still go after another free agent pitcher but so far they’re not interested.
Some other teams, e.g. Angels and Mariners, have given out longer deals in the past but aren’t doing that now.
The Phillies are exhibit A on the market change. They are about $130 million below the luxury tax threshold. Shorter deals are less desirable for them than other teams because they are a contender now. Yet they gave Santana only three years. The media reports that if Jake Arrieta is willing to sign for 3-4 years the Phillies would be interested.
The Phillies were burned paying Ryan Howard, Cliff Lee, and others a lot of money for little production and won’t do that again. They don’t believe that’s still the price of doing business even though they can certainly afford it.
Name a team that hasn’t been “burned” by a long term contract and you will be naming a team that has never signed one. For every player you mention, another can be named who might be offered five or more years but hasn’t yet or won’t this season because the teams that might otherwise be prepared to offer those sorts of deals are on the sidelines due to luxury tax considerations. Other players who received shorter-term contracts than expected could well have seen longer contracts, had more teams been contending for their services. That’s just a simple market response to supply and demand. Fundamentally, whether I am right about the impact of the luxury tax reset will be revealed a year from now. It will also be a potentially very rich free agent class.
I think that your overall point has merit, but Fowler also got a 5 year contract last off-season (5 /$82.5).
Not suggesting hard collusion, but if I were the owners, this would be the perfect year to redefine the bidding universe. There’s no one must have player–even Martinez is positionally limited. And, if you can hold the line, you send a message to future Free Agents that unless you are absolutely top tier, don’t wait for the last dollar or the extra year because it’s not going to be there. More FA’s will tell their agents “Get me a decent contract and let’s get the hell out of roster-less Dodge.”
As boring as it’s been so far its about to make for an exciting month.. or week.. or couple days.. or spring training.. They have to sign eventually right?
Tim Raines took until the All-Star Game back in ’87.
Even though teams are bringing in record profits right now that’s not necessarily going to last IMO. Currently a huge amount of team income comes from TV deals. The paid TV landscape is most definitely changing as more younger cost cutters move into the market. I think the days of restricted TV markets with huge rights fees are likely numbered.
Mlb.tv is positioning itself to be the monopoly service provider once RSN’s fade into the sunset
Also, if you mean 15-20% of income is huge, yeah
I would consider 15-20% huge considering its pure profit. In any other industry if a ‘stable’ business loses a few percentage points of revenue that is a really big deal.
The point I was trying to make is that baseball profits and salaries cant keep going up at the pace they have been for the last couple decades and perhaps teams are starting to realize that. I think TV is one of the big factors, but I dont see a lot of people discussing it.
Might be nice to think so but the media deals are money in the bank for the teams. They’ve sold those exclusive broadcasting rights to someone who is obligated to pay no matter what happens. Perhaps fewer huge media contracts will be signed in the future but I don’t think we’re seeing any signs of that happening.
That’s less true than you claim, because just over half of teams have ownership stakes in their RSN’s, so they have partial exposure to the profits or losses of those networks. In the worst case, they can end up “rebating” back a decent chunk of their local TV money if things go very badly for the RSN. That’s what happened to the Astros when CSN Houston flopped.
And the ones without ownership stakes in RSN’s tend to be teams that are low-revenue and/or have TV deals up for renewal in the next several years (Rockies, Pirates, Marlins, Rays, A’s, Brewers, and others).
And, while we see announcements on headline numbers, we don’t actually see the full details of these TV contracts. It’s quite possible that some of them do have triggers that could allow the broadcaster to open up the deal for renegotiation if financial performance of the network gets bad enough. In an extreme case, each RSN is probably a separately incorporated entity that could end up bankruptcy and void the remaining contract.
fangraphs.com/blogs/estimated-tv-revenues-for-all-…
2015-2016, 2.4 billion spent on FA, lwage avg salary increase 3.5%
2016-2017, 1.4 billion spent on FA, league average salary increase 0.3%
2017-2018 , 650 million spent on FA
Revenues increased over 1 billion (12%), valuations increased almost 2 billion, teams fluah with 50 million checks for BamTek sale
Oh and at the beginning of this period with the 2015-2016 FAcseason already well underway we had a new commisioner
Looking at Manfreds resume we see
In 1987, Manfred began working with Major League Baseball (MLB) during collective bargaining. Thats right in the middle of the collusion years
He represented MLB in negotiations with the MLBPA when forming new collective bargaining agreements in 2002, 2006 and 2011.
MLBPA alleged collusion in the 2002-2003 off season which followed the mammoth contracts to Manny, Jeter and Arod in 2000-2001. MLB settled with MLBPA for 12 million in the 2006 CBA .
So Manfred is well versed in the history of MLB collusion and probably has learned from MLB mistakes. Any collusion is probably going to be atypical and tough to prove. Doesn’t mean its not there.
Fact is if it looks like a duck, quacks like a duck, Walks like a duck and tastes like a duck its probably a duck.
Your wallet goes missing in a room with a 4 time loser for theft in the room. Who you going to suspect? MLb has paid the piper for collusion 4 times. Players have lost hundreds of millions so far. I call MLB and Manfred persons of interest at this point in the investigation.
Go on….
This is a one off, there are zero free agents this year that are all but guaranteed an elite (5+ WAR) season(s) for the length of the contract. Harper, Machado, Goldschmidt, those types get paid, and that’s why every team us going to use this crappy market to hold their breath longer and save up for them. Also nearly every contender has no glaring holes. It makes total sense why this is happening.
Now if it happens again next offseason, then I will pivot to the “MLB Network colluding with teams to space out transactions evenly throughout the offseason so they can have content” angle.
I think its time for the league to expand. There is a ton of young talant and a lot of it squandered. For teams to spend big on free agents there has to be less access to elite players who are young. Top prospects are super valuable right now, more so than any other time in baseball. Teams are stockpiling young guys and playing games of team control instead of trying to win. More teams solves these problems. It forces teams to not only pay veterans, but to not squander young talant. There are at least a dozen US cities that would love a baseball team.
There are a a few US cities that think they can support a baseball team. I can see a couple that should simply move instead of expand. Tampa Bay and Oakland can slide over to Montreal, Portland, or Charlotte without having to move divisions. Even then, a lot of these mid-size cities simply cannot compete with large media markets. For every Royals World Series winner there is a Pittsburgh or Cincinnati that basks in mediocrity and perpetual rebuilding for years.
I think that one of the main reasons why the market is so slow this winter is because most teams don’t want to commit a lot of money this year that’ll prevent them from spending next year, when there will be better players available. Basic supply and demand.
I believe that it is a mixture of front offices trying to find great value on the free agent market rather than blindly signing the top free agents, and tyring to stay below the luxury tax cap. Scott Borras isn’t doing anyone a favor by waiting towards the end of the offseason for his players to sign.
Team salary caps, huge 2018-2019 offseason, lack of long-term commitment… those are the things contributing to this boring offseason.
Ultimately it comes down to players not living up to there end of the bargain. If you sign a deal for that much money you should be expected to perform every year your paid that amount. If Pujols, Hamilton, A-rod, and every other player that signed these ludicrous deals played up to the level of there salaries there would be no issues paying any of these guys what they want. But fact of the matter is that these guys want the 7 year deals because even they know that they won’t perform for the last 2 years if not more. Even they know that if they sign a 5 year deal now they more than likely won’t be employable 6 years from now. Can you imagine this offseason if Joey Bats got what he felt he deserved last year and went on to have the season he had last year….The players know, and the GM’s finally do to. And if i was Harper i would be a little worried after seeing market for Martinez.. What is he 2 years younger and they saying 400+ million…if JD can’t get 100 million do you really think Harper is worth 300 million more for 2 more years?
I wonder if the best option to counter this is an expansion to dilute the talent pool a bit and drive up the demand for free agents again.
I almost feel like we’re regurgitating the same argument we’ve seen all off-season as a way to pass the time. There are so many factors that made up this perfect storm of a tumultuous offseason, and all of these have been argued in separate posts.
1. Big-market teams focusing on resetting the luxury tax instead of fruitless spending the last couple years (Dodgers and Giants come to mind)
2. Saving for a huge 2018 free agency
3. Boras asking for way too much for mediocre players. $30 million/year for seven years on a DH? $125 million for #3 starters?
4. A very uninspiring free agent class
5. A lot of teams are rebuilding (White Sox, Tigers,always the A’s, Marlins, Tampa Bay, Royals, Pirates, Reds, Padres) and don’t want to spend a lot. That means a lot of players have less choices and offers.
6. There are actually some solid offers out there – Boston’s $100 million is a $20 million a year contract for a DH with a massive injury history. Hosmer has 7-year offers on the table. Upton got $100+ million over 5 years. Cozart got $38 million over 3 years. Wade Davis got $52 million over 3 years.
7. Free agency generally isn’t working out anymore and teams that focus on analytics might be getting wise to it. Look at the terrible contracts given out over the last few years. Signing a player like a Pujols or Cabrera on the downside of their peak for 7-10 years simply wastes money and hinders your ability to move players later. The Dodgers spend something like $50 million on dead weight contracts a couple years ago.
One year is not a trend, nor something to toss a word like collusion on. Look at the 2016 free agent signings as proof. Dexter Fowler got $82.5 million! Desmond got $70 million. Cepedes got $100+ million. Even Matt Holiday, a shell of his former self, got a $13 million deal.
Giving a free agent from another team any more than 3-4 years is just asking for trouble. Unlike your own free agents, you don’t know how the guy is going to fit in with your organization, or with the fans and writers. Further, you’ve got a guy who don’t owe you any loyalty, so he may just slack off and collect his big paychecks for the next 7 years, and give you next to nothing. If teams have finally figured this out, then, yes, this will be a trend.
I think the ;point about lack of incentive for teams is valid. Take the Brewers. They finished 6 games behind the Cubs and one game back of the Wild Card. Their big move so far? A 2 yr /$15.5 million contract to Jhoulys Chacin. No knock on Chacin or the move. He’s a pretty good value. But the Brewer payroll is still hovering around $70 million for 2018. Milwaukee is a small media market but they were in the top half of the NL in attendance. They certainly have money to spend and if not that, a system that’s rated in top 10 by everyone to explore trades. Offensively they had a lot of HR but struck out more than any team in baseball, and they haven’t made any significant move to their lineup. In fact there’s still speculation that they’ll give one of their biggest whiffers, jonathon Villar, his job back instead of risking overpaying Neil Walker or making a splash with the Hosmers and Martinez types.
Stearns was bullied by the Cubs last July and continues to be. A couple weeks ago, Cain’s name came up as a potential Brewer target. Within hours, suddenly the Cubs were showing interest, Cubs gave Cobb a lowball offer which he’s rejected. Now we all know the connection of Cubs manager and pitching coach to Cobb, but Brewers have a connection to him through their assistant GM Matt Arnold. My guess is Brewers shy away from him not confident that the Cubs won’t step in and blow them out of the water in the long run.
There are lots of good points here, but I don’t think it’s correct in recent years to say this about Boras: “While Scott Boras is notoriously willing to run the clock, he doesn’t exactly make a habit of negotiating well into January and February; to the contrary, he usually isn’t forced to drag things out, as Passan notes.”
By my count, only one Boras client has signed before January over the previous three off-seasons: Matt Holliday in December 2016. Matt Wieters signed in February 2017. Chris Davis, Greg Holland, Denard Span, and Ian Kennedy all signed in January 2016. Scherzer signed in January 2015. It’s possible that I failed to include someone, but by my count 6 of the last 7 Boras free agents have signed in January or February.
“An assistant GM tells Passan he’d rather pay Lorenzo Cain at a big rate ($24MM) for one season than promise him a longer-term deal. That’s an interesting and somewhat curious position, as Cain projects as a quality asset for a few years into the future, though it’s tough to assess without knowing the full context.”
It’s also strange because Cain has a QO attached to him. So this team would sign Cain, give up whatever draft pick(s) and IFA pool money a QO costs them, and then have Cain for only 1 year. Under the new CBA, a player can only receive a QO once his career, so a team can’t recover that cost by QO’ing Cain after 2018. Under the old QO system this deal would have made some sense because a team could get the draft pick compensation after a 1-year deal (like the Rangers did with Ian Desmond, for example).
Since the QO pick that a team gives up now depends on its status: highest penalty for a team over the luxury tax, somewhat lower penalty for a team under the luxury tax that doesn’t receive revenue sharing, and lowest penalty (third highest draft pick) for a team that receives revenue sharing, we might infer that the quoted assistant GM is from the last category of team. A team receiving revenue sharing loses the least for signing a QO’d player and will also have typically be the most averse to long-term financial commitments due to its low revenues. At a minimum, we can infer that it’s probably not a team that was over the luxury tax in 2017 since that time loses the most (2nd and 5th-highest picks plus $1 million of IFA pool money) and typically would also prefer a longer-term, lower AAV contract because of luxury tax considerations.
In other words, it’s a somewhat peculiar preference that points to this assistant GM probably being from the sort of team (one that receives revenue sharing) that we wouldn’t expect to be part of Cain’s primary market as a free agency.