Everyone is trying to figure out the dynamics of a weak free agent market and the rash of player extensions. It may be a simple conversion of complex rational behaviors.
First, for the past several years, front offices have gone off the deep end on Big Data. Teams have figured out new statistics on spin rates, hit ball velocity and motion capture mechanics. Teams can break down their players into computer data. Now teams have more stats (good and bad) on their players to justify lower arbitration offers or free agency passes on veterans who used to be paid on past performance.
Second, while baseball is still generating record revenues, there are storm clouds on the horizon as attendance is down, TV ratings are down, TV advertising (and associated broadcast fees) have hit a plateau and demographics are trending to age out. Kids today would rather spend four hours playing Fortnite than watching a baseball game. In order to keep profit margins, teams are relying more on young, cheap and controllable players to fill major league rosters.
Third, the age of the super-agent is fading away. In the last two off-seasons, agents have missed the market trends, especially for the second tier free agents. Teams were armed with weaponized stats proving that older veterans decline in value after age 30. Teams were only going to pay for future performance, hence lower average annual salaries and contract years. Bryce Harper and Manny Machado got their deals because they were both 26, in their prime production years. Other veterans, including pitchers, still sit on the side lines without a job.
Fourth, veteran players and union officials are mad about the free agency market. They whisper collusion but cannot prove it. They are thinking about striking when the current collective bargaining agreement is over. But the prospect of a strike or a lock out does not sit well with a majority of baseball players. Hence, the surge in player extensions (usually at team friendly rates.)
Mid-February 25 contract extensions have been signed, notably by many young players including Ronald Acuña Jr., Blake Snell, and Eloy Jiménez, who had yet to have a major league at-bat. Acuña Jr. and Snell were last year’s Rookie of the Year and Cy Young Award winners while Jiménez could be this year’s ROY.
Acuña, Snell, and Jiménez’s teams locking them up this early in their
careers has a two-fold effect: given how good they are (or, in
Jiménez’s case, could be), they stand to potentially set salary records
going through arbitration. Acuña, for example, was set to become
eligible for arbitration for the first time in 2022. His extension is
for eight years and $100 million, meaning he won’t become a free agent
until after the 2026 season at the earliest. He will earn $15 million in
2022, and $17 million from 2023-26.First, for the past several years, front offices have gone off the deep end on Big Data. Teams have figured out new statistics on spin rates, hit ball velocity and motion capture mechanics. Teams can break down their players into computer data. Now teams have more stats (good and bad) on their players to justify lower arbitration offers or free agency passes on veterans who used to be paid on past performance.
Second, while baseball is still generating record revenues, there are storm clouds on the horizon as attendance is down, TV ratings are down, TV advertising (and associated broadcast fees) have hit a plateau and demographics are trending to age out. Kids today would rather spend four hours playing Fortnite than watching a baseball game. In order to keep profit margins, teams are relying more on young, cheap and controllable players to fill major league rosters.
Third, the age of the super-agent is fading away. In the last two off-seasons, agents have missed the market trends, especially for the second tier free agents. Teams were armed with weaponized stats proving that older veterans decline in value after age 30. Teams were only going to pay for future performance, hence lower average annual salaries and contract years. Bryce Harper and Manny Machado got their deals because they were both 26, in their prime production years. Other veterans, including pitchers, still sit on the side lines without a job.
Fourth, veteran players and union officials are mad about the free agency market. They whisper collusion but cannot prove it. They are thinking about striking when the current collective bargaining agreement is over. But the prospect of a strike or a lock out does not sit well with a majority of baseball players. Hence, the surge in player extensions (usually at team friendly rates.)
Mid-February 25 contract extensions have been signed, notably by many young players including Ronald Acuña Jr., Blake Snell, and Eloy Jiménez, who had yet to have a major league at-bat. Acuña Jr. and Snell were last year’s Rookie of the Year and Cy Young Award winners while Jiménez could be this year’s ROY.
Compare that to Rockies third baseman Nolan Arenado (who also signed an extension). Arenado earned a $26 million salary going through his final year of arbitration eligibility. Arenado avoided all the potential drama and cross currents of a broken free agent system by taking the familiar guaranteed money of the Rockies. There is some value in the stability of staying with your current team (professionally and family situations).
Agent Scott Boras, who has had many clients getting paid less than he projected, is not happy with these young prospect extensions:
"Great young players are getting what I call snuff contracts. And a snuff contract is that they’re trying to snuff out the market. They know the player is a great player, and he’s exhibited very little performance. So they’re coming to him at 20 and 21, and I’m going to snuff out your ability to move, to go anywhere, to do anything, and your value. And I’m going to pay you maybe 40 cents on the dollar to do it. What’s my risk?"
Ken Rosenthal recent reported that the players believe team representatives are even circumventing the player and his agent by appealing to the players’ families, especially for players with poor and/or Latin American backgrounds. That may help explain why many young players are taking the guaranteed money. Contract negotiations do not happen in a vacuum. A multimillion dollar guaranteed contract is life changing for most families.
By taking themselves out of the picture, Acuña and Snell cannot set the bar for the industry for players of their caliber, age, and service time, which makes agents jobs much harder to push the boundaries of free agent money. Craig Kimbrel and Dallas Keuchel have been caught on the other side looking in as the season started. By testing the free agent waters, Kimbrel and Keuchel have been swept away by teams signing younger players earlier.
But there still are puzzling aspects to contract extensions. The Cubs extended utility infielder David Bote for 5 years, $15 million. Bote is not even a starting player! He is a career .240 hitter. His career WAR is 1.0, not even the level of a AAAA replacement. Yet, Bote went to management and begs for some job security. The 24th man on the roster got his wish with a cash strapped club paying him five times what he was projected to earn in the next 5 years. Teams can still spend oddly in this new era of extensions.
