MLB offseason highlighted by timid, buyer-free market

The first few weeks of February are giddy ones for baseball fans. Deep in our North American winters, a call rings out—it’s preseason! Baseball, sunny, warm baseball!

Reliably, a handful of big names have changed uniforms, and preseason is our first chance to see and to finally believe these transformations. Just look at Giancarlo Stanton in a Yankees uniform!

This February of triumphant return feels a little bit different, though. The traditionally transaction-heavy period has passed, and yet many of the highest profile free agents remain unsigned. A few of these players have signed within the last 10 days, a highly uncharacteristic outcome.

Yu Darvish is a 30-year-old, top-end pitcher coming off five seasons of production ranging from above-average to spectacular. He received $126 million over six years, a relatively precipitous drop-off from megalithic pitcher contracts of the past. Just two years ago, a pitcher of far less quality named Mike Leake received a five-year contract with an $80 million overall value. Darvish’s surprisingly low free-agency windfall aside, this ace starter unbelievably couldn’t find a taker throughout the early winter. Clearly, something has changed.

Two weeks ago, powerful MLB agent Brodie Van Wagener tweeted a letter of his own writing in which he accused owners of “coordinating” an effort to depress the market. “There is a rising tide among players for radical change,” he threatened. He further implied that striking actions might be necessary to bring the owners back to their senses (Twitter, @bvanwagenen, 2.02.2018).

Van Wagener’s letter came in the wake of increasing skepticism directed at MLB ownership. Earlier this off-season, a new Miami Marlins ownership group launched a proverbial fire sale of their entire team. The aforementioned Giancarlo Stanton, a generational power-hitter, was shipped to the New York Yankees for a slightly above-average middle infielder and a couple of middling prospects. From the outside, the Marlins’ off-season moves looked a lot like ownership prioritizing a macro-level debt situation over the financial machinations of putting a product on the field.

Another early off-season development bringing increasing scrutiny to the owners was a $50 million bonus each, received as a result of the league’s behemoth sale of MLBAM’s BAMTech streaming technology (NBC Sports, “Each owner will get at least $50 million in early 2018 from the sale of BAMtech,” 12.15.2017). So why isn’t more money being invested?

In this context, the popular explanation of this year’s slow free agent market has been next year—waiting for next season’s talented free agents to hit the market. Bryce Harper and Manny Machado headline the “class of 2019,” with the possible addition of Dodgers’ ace Clayton Kershaw.

This explanation really doesn’t hold outside of a handful of specific scenarios, though. Perhaps a few teams are opting to stow in their long-term plans a big contract for Bryce Harper instead of for J. D. Martinez, the headlining power bat of this year’s class (and a new member of the Red Sox, reportedly, as of minutes before yours truly was going to file!). The truth is that the market isn’t a reflection of a few team’s unwillingness to splash the big cash due to specific scenarios—it is a reflection of a shared unwillingness across the league.   

Sports Illustrated’s Tom Verducci has written very convincingly that there are different forces at play in the free-agency shortage of bombast. He cites two central factors. First, front offices are no longer dealing in hyperbole with talented players on the market. Those coming onto the market at or approaching their 30s are not getting the same dollar figures as they used to, and home run totals are losing their purchasing power due to a large uptick in power hitting over the last five years. Uniting these two threads is the new overarching theme in MLB front offices and Verducci’s first factor: data analytics-based valuation (Sports Illustrated, “The Free Agent Market is Frozen Because The Players Bargained for Luxury, not Labor,” 02.02.18). Teams are taking on a mathematical approach and looking to optimize their winning potential, either in the short or the long term.      

Compounding with this development to produce the effect of low free agent offers is the nature of the current Collective Bargaining Agreement between the players and ownership. The soft-cap salary structure was “stiffened…by a luxury tax threshold that hasn’t come close to keeping up with growth in revenue and payrolls,” Verducci writes (Sports Illustrated). When teams go over the aforementioned threshold, they have to pay a tax to the league in the interest of competitive parity. The effort by typical big-spenders like the Yankees and the Dodgers to stay under this threshold has been notable.

Though sympathy is always in short supply for millionaires, this new paradigm of performance valuation seems to represent a serious threat to players’ bottom lines, especially when combined with the payroll-depressing luxury tax. Since it is the players who “put on the show,” one wonders how long such a state of events can persist in such a financial behemoth of a sport.

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