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Kate McCabe / Gavel Media

The Evolution of the MLB Free Agency Market

February is quite possibly the most mundane period for sports. The NFL season ends with the Super Bowl, the NBA has its typical defense-less all-star game, the NHL season slowly resumes its play after the all-star break, and college basketball wraps up their regular season before the highly anticipated March Madness Tournament.

Yet, while the sports world dragged on, some of the most exciting words were uttered on Monday: “pitchers and catchers report today.” For baseball fans and laypeople alike, this means everything; for the non-baseball fan, it means the dreary winter months are almost coming to a close. For lovers of the sport, it means that some of the world’s greatest baseball players will compete at the highest level soon enough.

Well, the term “world’s greatest baseball players” is used loosely in this context. Of course, there is no shortage of star players ready to compete during Spring Training in February, including Mike Trout, Mookie Betts, and Jose Altuve, to name a few. However, a couple of players are missing from that list of upper-echelon athletes.

As of Feb. 17, 2019, Bryce Harper and Manny Machado—two of the games most exciting young studs and members of that elite list—are still standing without a contract. Harper, the 2012 Rookie of the Year and 2015 MVP, is only 26 years old and hasn’t even scratched his potential despite putting up slightly depleted numbers in his most recent season. Machado has consistently been one of the premier defenders at third base and shortstop while swatting over 30 home runs in each of his past five seasons.

Harper and Machado are two of the top free agents available, but there is a set of above-average position players and pitchers still on the market. That category includes household names like Dallas Keuchel, Craig Kimbrel, and Marwin Gonzalez as well as post-prime, but still serviceable players like Gio Gonzalez and Adam Jones.  

Spring Training games begin on Feb. 21 and the MLB season begins on March 28, excluding the two games in Japan between the Mariners and Athletics on March 20. That’s not much time to prepare for the upcoming season.

Why don’t any of these players have a contract?

The 2018-2019 offseason marks the second straight year that the market has been slow to develop. This offseason, it appears that the owners are yet again wising up in how they spend their money.

Teams view these contracts as a greater risk than reward in the long-run. No team wants to be stuck with a bloated contract that lingers for 5 to 10 years and reduces financial flexibility in the future. These contracts are even more difficult to trade and require the attachments of attractive assets, like top minor league prospects or international signing money.

What we see now is a change in the types of competitors for free agents in this market.

Small market teams who have been stuck at the bottom of the standings, such as the Chicago White Sox and San Diego Padres, are now willing to pay larger contracts to get back into the competitive circuit.

While these players may not single-handedly turn things around, it is a sign that the team is committed to winning now and in the future. Signing these players will also give reasons for fans to come to the stadium and may attract future free agents to join that winning culture.  

The Padres did this most recently by signing first baseman Eric Hosmer to an 8-year, $144 million contract before last season, after finishing 4th and 5th place in their division in each of the last two seasons. The Phillies also opted for a culture change during the 2017-2018 offseason, signing Jake Arrieta and Carlos Santana after years and years of mediocrity.

These small market signings may be imminent once again, as Harper and Machado have been linked to the Padres, Phillies, and White Sox. But, even these teams are balking at the absurd asking prices from the two young studs.

Entering the offseason, Harper and Machado sought unprecedented contracts exceeding $350 million, with reports of that quantity eclipsing the $400 million total. Currently, the longest contract to date is Giancarlo Stanton’s contract signed with the Marlins, a $325 million agreement over a 13-year span.

It is interesting to note the Stanton contract in which he received the mega-deal after finishing second in MVP voting in 2014 and posting a league-high 37 home runs on a .288 batting average. Yet, in his first five seasons before signing the extension, Stanton produced an average 4.28 wins-above-replacement per season (WAR), a statistic that represents the single number of wins a particular player has contributed to the team.

In his first five seasons in the league, Harper produced a similar 4.3 WAR average per year, but with more impressive single season totals, including his ridiculous 2015 season in which he took home the MVP after batting .330 with 42 home runs and 118 runs scored.

Harper could very well be the better player when compared to Stanton now, so why isn’t he getting offered a contract close to Stanton’s total?

Part of the reason may be due to the agents who negotiate these contracts. Harper, Machado, Keuchel, and Marwin Gonzalez are all represented by the infamous MLB agent Scott Boras, who is known for being patient and setting large asking prices. He may continue to advise these players to hold off until they get the contract they want.

Improvements in the way statisticians analyze the game via sabermetrics also play a major factor in this decision-making process. New statistics are emerging for front office executives to add to their toolbelt, uncovering stats like the aforementioned WAR or xFIP, the latter in which estimates the expected run prevention for a pitcher based on the defensive stats from position players behind them. Yes, xFIP is as ridiculous as it sounds.

Teams have become aware of this sabermetric culture, and it’s hurting the players. With any player, there will always be a stat that works against him. No player is perfect, but will a team really want to throw hundreds of millions of dollars at a player who can’t perform to a team’s expectations?

Maybe teams have now become focused on fostering talent within their farm system and looking towards the draft rather than roster improvement via free agency. The MLB draft is over 40 rounds in three days, larger than any other professional sport by a long shot. Teams are almost guaranteed to uncover hidden talent within their own system. These players are signed to contracts for only tens of thousands of dollars initially. Maybe it would be more prudent to wait for these players to develop and contribute down the road (see: The Oakland Athletics).

In the past, teams signed impulsive contracts like it was their job. It was only a few years ago that a 32-year-old Albert Pujols received one of the largest contracts of his time, signing a 10-year, $240 million contract with the Los Angeles Angels. His playing time has decreased dramatically, and he may be on his way out in the next year or so. Other names—like Josh Hamilton or Pablo Sandoval—come to mind.

The Pujols contract is a perfect example of teams paying for a player’s performance demonstrated previously in his career, which will not be replicated during the future contract period. Sure, Pujols is a bonafide hall-of-famer, but was he really expected to replicate those ridiculous numbers he showed in St. Louis? It’s possible but highly unlikely.

This standstill will keep going until both sides reach a compromise. It will end eventually, but down the road, we could see something similar to the 1981 player lockout—in which 713 games were canceled due to impasses in free-agent compensation—happen.

Players like San Francisco’s Evan Longoria and Toronto’s Marcus Stroman are voicing their displeasure with the devaluation of MLB free agents. They argue that there’s more to a player than just his “value” on the field, and teams should value players that best represent their franchise.

Ultimately, it comes down to how players perceive themselves and what they feel they deserve. If they valued playing the game they love before anything else, then there would be no free-agency problem. But, like any other profession or business, it’s about getting what you deserve, and nothing less.  

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