Something is rotten about baseball free agency
By DANIEL W. DREZNER | Special to The Washington Post | Published: January 30, 2019
Every offseason, most of baseball attempts to distill and copy the formula that led to the success of the reigning World Series winner. The success of the Kansas City Royals in 2015 caused teams to focus more on constructing deep bullpens. The Houston Astros' 2017 World Series win reemphasized the importance of using the draft to build a deep roster.
The Boston Red Sox crushed the New York Yankees, Houston Astros and Los Angeles Dodgers on their way to a World Series win last year. Curiously, there has been little to no chatter about how other teams could copy the Red Sox' recipe for success. This might be because one key — hiring Alex Cora as manager — is difficult to replicate. But cynics might argue that the real source of the Red Sox' advantage in 2018 was their massive payroll, the largest in MLB. The team has very good homegrown talent and traded prospects for all-stars like Craig Kimbrel and Chris Sale. Still, high-priced free agent signings such as David Price and J.D. Martinez helped its championship run. Furthermore, as a big-market, big-spending team, the club could afford to eat its bad free agent contracts from earlier years, like Pablo Sandoval and Hanley Ramirez, and still field a talented squad.
What is interesting about this offseason is no teams are following this blueprint. Indeed, this year's Hot Stove season — the time of year when free agent signings and trades are most prevalent — is following the pattern of last year's, which had so few free agent signings that the MLB Players' Association organized a spring training camp for all the unsigned players.
One reason proffered for the slow free agent signings last year was that teams were hoarding cash to prepare for the monster free agents to come this year, including Manny Machado and Bryce Harper. Except that we are now in very late January, with pitchers and catchers reporting in less than a month, and both superstars remain unsigned. As FanGraphs' Sheryl Ring noted, "It turns out that last offseason, to that point the slowest offseason ever, wasn't unique. It may have been, instead, a harbinger of the new normal."
The Boston Globe's Nick Cafardo reports that the lack of contracts is starting to sow labor discord: "The rift between team owners and players is growing wider by the day as big-name free agents remain unsigned in late January. Both sides are on a collision course toward a major blowup and threat to future labor peace."
The question is why this is happening. Here the story gets a bit muddled. In many ways, owners are right to be cautious about free agent signings. Cafardo points out that major league teams have incorporated the lessons from sabermetrics about the aging curve and are acting accordingly: "What many owners have come to find is the level of production of the younger player is far greater of that of the older players, so those deals for players 30 and older are starting to dry up. The owners will argue that they have finally woken up to that fact. Older players are getting shut out or offered one-year deals." But this fails to explain the subdued interest in Machado and Harper. Both of them are 26, hitting free agency in their prime. They should be signing big honking contracts.
There is more going on here. MLB Trade Rumors' TC Zencka points out that most teams at the extremes are pursuing strategies that obviates the need for free agents:
"Teams at both ends of the competitive spectrum are contributing to this contentious ecosystem. At one end, bottom feeders like the Orioles, Marlins, and Blue Jays are realizing the long odds of winning their divisions and choosing the judicious (and totally understandable) approach to team building, largely abstaining from free agency. At the same time, there are more than a few teams with wide-open competitive windows who nonetheless remain passive in free agency, citing financial limitations or a need for future flexibility. The competitive balance tax, intended as a punitive fee to help balance the league, has instead become a scapegoat for large market teams to avoid significant free agent spending."
The Los Angeles Dodgers have epitomized the latter approach. Dodgers President Stan Kasten made some impolitic remarks to the Los Angeles Times' Dylan Hernandez on the question of signing premium talent:
"Kasten started deflecting questions about the team's alarming lack of spending this offseason.
" 'I'm dealing with facts,' Kasten said.
"The facts, Kasten said, are that season-ticket sales point to the Dodgers leading baseball in attendance again. And if season tickets are selling, everything must be A-OK."
There are sound fiduciary and baseball reasons team will be reluctant to sign aging players. Kasten's quote, however, hints at something even more disturbing. What if teams are not adding to payroll merely to increase their profits?
Corporations increasing profits is not inherently bad. This is what businesses are supposed to do. But in sports, the implicit assumption has always been that the best way for teams to run a profit is to win games and compete for championships. Winning teams should lead to greater attendance and ratings, which leads to more money coming in. Does this not hold anymore?
There is no evidence that collusion among owners is responsible for the slow Hot Stove season. A market correction for high-priced but aging free agents was long overdue. But let's be clear: What is happening now goes far beyond a simple market correction. Good teams should be adding to their payroll, like the Cleveland Indians, but instead they seem to be trying to shed high-priced contracts, secure in their conviction that they will win the division.
Baseball front offices have better data than they ever have before. Many of the individual decisions that teams have made this offseason can be defended. The systemic effect on baseball, however, is to produce a bunch of teams intentionally tanking, teams secure that they will win their division, and a complete lack of urgency to compete.
No wonder players are getting suspicious. If this keeps up, fans will be getting suspicious as well.
Drezner is a professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University.