It May Not Be the C-Word, but Free Agency Signals Big Problem for Baseball
There is no denying it, this offseason has moved at a glacial pace. Eleven of the top 15 free agents on MLB Trade Rumors‘ top 50 list remain unsigned. Of the free agents that have agreed to deals, none have received more than three years guaranteed.
Many had assumed the signing of Shohei Ohtani and trade of Giancarlo Stanton’s would open up the market, but almost nothing else has happened even in the fading wake of those moves. This has led many baseball writers and Twitterers to speculate that perhaps something nefarious is going on.
Could owners be colluding to suppress the free-agent market? It has happened before, from 1985-87 owners reached an unofficial agreement to close down free agency. Available players only received offers from their current teams, leading to a dramatic reduction in total value and length of contracts.
Andre Dawson famously agreed to a deal that was well below his actual value just to move from the brutal turf in Montreal to Wrigley Field. Arbitrators eventually ruled that the owners had violated the collective bargaining agreement (CBA) and were forced to pay the players union $280 million in damages.
So are we seeing that scenario replayed before us this season under the guise of adherence to a “soft” salary cap?
I do not believe this current slow offseason is another case of collusion, but that it is instead a confluence of several factors that has led to a similar result. One of these factors in particular presents a dilemma for me and other pro-labor baseball writers.
Before we get to that, though, let’s look at some of the other forces that have led to this depressed market. Next year’s free agency period is one of the most loaded in history, headlined by Manny Machado and Bryce Harper. Odds are that those elite players will have no shortage of blockbuster offers. Thus, some big spenders are choosing keep their powder dry this offseason.
The most recent CBA has also toughened the competitive balance tax (CBT) on teams that spend over a certain amount in annual payroll ($197 million this year). Teams that go over in three consecutive years are hit with a penalty of 50 percent of the overages, with up to a 45 percent surcharge for going at least $40 million over in consecutive years. And if that 95 percent penalty isn’t enough, there are draft pick restrictions built in as well.
When you consider all the implications of a CBA that teams are operating under fully for the first time, the soft cap has undoubtedly prevented teams like the Dodgers and Yankees from going on spending sprees.
The conflict for me really comes in the next factor, which is that management is getting smarter about the contracts they negotiate. For years, analytically-minded executives like Theo Epstein have preached smarter free agent signings: Aiming for younger players, not signing players over age 30 to long-term deals, etc.
Many writers, myself included, have been preaching that for years as well, but there’s a notable downside to it actually coming to fruition. The problem with actually putting this logic into practice is that the most valuable players (28 years old and younger) are under total team control. If the older players are no longer valued and younger players have little to no leverage under the terms of their rookie contracts, salaries will crater.
As someone who thinks players deserve a bigger share of total baseball revenue, this creates a huge dilemma. The right baseball move from a numbers perspective could be devastating for the hard-working players who are driving the record revenues being enjoyed across the league.
Frankly, I wish this situation really was born of shady back-room deals between baseball’s owners. The issue of collusion would actually be much easier to solve. Instead, I fear this trend is going to become an intractable problem. The labor peace of the last 25 years will likely not last long if salaries begin to drop over the remaining four years of the current CBA.
Speaking of, I’d be remiss if I didn’t acknowledge a measure of culpability for the MLB Players Association in the creation and ratification of said agreement. The union’s approval of changes to the qualifying offer and CBT guidelines have very directly led to the issues we’re seeing and discussing here.
I hope I’m wrong and that we don’t arrive at a situation in which the players need to go on strike to level the playing field. Well, inasmuch as that’s even possible in this situation. But I’m afraid that his moribund market is a sign of things to come and I don’t know what the solution will be.