Project LinX: The world is neither random nor cruel. It’s simply complex. We interrogate anything that looks simple and anyone promising easy answers. That causes problems. Bring it.
Today, 02/21/2019: What kind of messages are baseball owners sending to free agents?
Like many baseball fans and analysts I’ve spent much of this off-season waiting for the Machado and Harper shoes to drop. My takes on why no truly major contract moves have been made until now are: 1) Baseball is still spooked by massive contracts like those awarded to Robinson Cano and Chris Davis; 2) Because baseball teams are “quant funds” now owners are more confident they can make healthy profits even in truly mediocre seasons, which diminishes the returns on gambling on big payrolls; and 3) Owners are sending a larger, not so vague message to players that performance over the arc of a career is no longer commensurate with how free agents are compensated:
“There are many reasons for the weak demand. The addition of the second wild card cleaved a full playoff spot into two halves, and teams have responded by tempering their efforts to win one of them. The increased flow of guaranteed money to all 30 teams, money that allows teams to lock in profits regardless of on-field performance, has diminished the incentives to take financial risks to add wins. The most recent Collective Bargaining Agreement targeted large-market, high-revenue teams with surgical precision, beating them back behind the luxury-tax threshold.
Most important, though, is the devaluation of service time in the market. The baseball compensation system is built almost entirely on rewarding service time. You can hit 100 homers in your first season, but the best you’re likely to do in your second is a small raise above the major league minimum.”
“The Salaries For Young MLB Stars Aren’t Keeping Pace With Revenues” | Baseball America | Joe Sheehan | 02/06/2019
Last year’s free agent market was sluggish, albeit less so than this year. The problem this year is that a kind of “soft collusion” among front offices doesn’t stand a chance against market forces that will produce the two biggest contracts in the history of major league baseball.
“The first reason Machado would mosey down the California coast from his brief stint in Los Angeles, of course, is the money—a factor that cannot be ignored in a winter that has only further inflamed labor strife due in large part to the frozen “hot” stove. Based on his past production at such a young age, Machado should expect to play at an All-Star level for years to come: The five names directly after his on the career leaderboard for most WAR through age 25 are Joe DiMaggio, Barry Bonds, Stan Musial, Willie Mays, and Lou Gehrig. Past 10-year contracts like those belonging to Albert Pujols seem like overpays in retrospect because they captured a player’s decline years; still in his mid-20s, Machado has plenty of prosperous seasons still to come, with his rare and eminently valuable combination of big bat, great glove, and prime defensive position whether he stays at shortstop or moves back to third.”
“We Promise the Manny Machado–Padres Marriage Is a Good Thing” | The Ringer | Zack Kram | 02/19/2019
A few takeaways:
1) Machado will sign with The Padres for 10 years at $300 million. His contract reportedly includes an opt-out provision after the 5th-year, which is probably good for both team and player.
2) San Diego won just 66 games last year. Eight losing seasons have helped produce baseball’s deepest farm system. At some point in the upcoming season Machado and Fernando Tatis Jr. (baseball’s 2nd rated prospect) will be in the same line-up. There’s nowhere to go but up. This year’s Padres have a decent chance of looking like 2014’s Astros—at least on paper.
3) Expect Bryce Harper to get $325 million this weekend from the Washington Nationals.
Owners may have miscalculated their chances of reigning contracts in at a time when two generational talents have entered their contract year at age 26. Put these two aside and this sluggish free-agent off-season looks more like a growing trend than a momentary aberration.
IMAGE SOURCE: hit-1407826_1920 (CC0 Creative Commons)