February 3, 2018


In the past, players were given new contracts based upon past performance. Mega-deals like Albert Pujols Angels' contract has been a disaster because as the superstar aged, his performance was bound to decline. Teams are more aware of "dead money" deals having a substantial negative impact on their team's payroll and finances (aren't the Mets still paying Bobby Bonilla?)

This off-season has been a turning point. General managers are not paying for "past" performance as much as looking forward with new metrics to determine if a free agent is worthy of a $100 million deal.

When the news broke that the Cubs avoided arbitration with Kris Bryant by inking him to a record $10.8 million deal, I thought the Cubs overpaid to keep him happy. Some believe teams give large contracts to controlled players as a means of trying to get a "home town discount" when they reach free agency.

Bryant's large contract allowed Mookie Betts to best the Red Sox at his arbitration hearing, earning a new deal at $10.5 million.

The consensus standard measure for player value has been WAR. In the past, $5.5 million in value was attached to each 1.0 WAR. In other words, a starting position player (2.0 WAR) should be making $11 million.

When we look at the Bryant contract on a valuation standard, he had a 6.1 WAR in 2017. Under the old standard, his value was $33.55 million. He played well above his salary. In his 2018 deal, Bryant's salary valuation is only $1.77 million/WAR.

The same is true for Betts. His performance standard last season was worth $35.2 million. Under his 2018 deal, Betts' salary valuation is only $1.64 million/WAR.

Both the Cubs and Red Sox expect that Bryant and Betts will have equally good seasons as last year. They are both young and have not hit their "prime" production years.

But if big market teams look closely, their current superstar players are getting good contracts well below past FA dynamics. Bryant and Betts are being paid at a rate one-third of the old FA standard. Some would say Bryant and Betts would have been the top two free agents if they were not arbitration eligible. So if these players are getting under $11 million, why should any other FA get more?

Players and agents may not sense this economic earthquake shift in valuation considerations.

It was reported Yu Darvish had one five-year contract offer. But apparently, he rejected it since it has been two weeks and he remains unsigned. It may have been from the Twins or the Brewers (who have moved on to discuss trading power hitter Domingo Santana to the Rays for SP Chris Archer.) One report had Darvish looking for more than $150 million. Any long term deal would put the 31 year old pitcher past his "prime" years.

If Darvish is looking for a 5 year/$150 million contract, the annual salary hit to a team would be $30 million. Darvish's 2017 WAR was 3.8. Under the old WAR metric, his value would be $20.9 million. Under the new metric, it is only $7.6 million. There is an ocean of difference between these two figures. And that is why both sides seem to be waiting out the off-season, playing payroll "chicken."

But the teams do have an incentive not to flinch or cave. The big money teams, the past spenders who set the free agent marketplace, has all decided that the luxury tax hits and loss of draft position is more costly in the long run that signing expensive free agents in a "win now" annual business model. Teams see young core controllable players on the Cubs and Astros rosters wearing championship rings. They want to copy that blueprint for success.

The longest contract signed this off-season was Lorenzo Cain and the Brewers: 5 years, $80 million. Cain had an excellent 2017 campaign. He had a 5.3 WAR. Under the old system, his performance value would be $29.15 million. Cain signed his deal with an average salary of $16 million/year. Under the new metric, he is getting $3 million/WAR, a 45 percent discount from the past standard.

Players want to get paid what they are worth. But the definition of worth is rapidly changing in baseball. As spring training gates open in less than two weeks, it will be interesting to see how many Andre Dawson situations will happen at the fence line. (Dawson was a FA with no suitors. So he went to Cubs camp with a blank check and asked the Cubs to give him a contract on the team's terms.)