Month: February 2009

A guest article by Maury Brown

With Spring Training arriving, we can start to peel back the layers of the onion we call free agency and look at some trends. To begin with, I started by taking a  look at total spending in the FA market this season. I created a table with total club spending and the percentage of spending by each club against that total.

As the linked article points out, you could take just what the Yankees lavished on Mark Teixeira and cover what the Braves, Mets, D-Backs, Padres, and White Sox have spent on free agents this off-season and still have money to spare.

I then went on to mention that there has been a sizable increase in the number of minor league contracts that have been agreed to, compared to two years ago. From 29 percent of the total FA contracts in this year’s market (and it’s not done), to 31 percent last year, to a scant 20 percent during the 2006-07 FA cycle.

For MLBTR, I decided to look deeper into the matter, and here’s what I found:

A total of $1,079,857,500 (yes, you’re looking at the number right, as in over a billion dollars) has been spent so far this off-season in the FA market over 154 contract years. Put the two together (without deferments and minor league contracts) and you get an average salary for FAs of $7,012,062. But, as mentioned prior, the Yankees have been spending like there’s no tomorrow, and that skews the figures.

Remove the Yankees from equation and you come up with an average salary of $4,914,288.

For those that wonder whether the economy (or, as a few conspiracy theorists have suggested, collusion) is influencing matters, consider the following:

• Avg. FA salary (2007-2008): $7,357,242
• Avg. FA salary (2007-2008, minus the Yankees): $5,408,468
• Avg. FA salary (2006-2007): $6,331,015
• Avg. FA salary (2006-2007, minus the Yankees): $6,339,223

You’re asking, “What gives? I thought the economy was driving the market down.”

Here’s the deal. In the 2006-07 FA market more money was spent ($1,652,395,000), but it was spread out over more contract years (261), thus lowering the average (that, and the Yankees spent far less than usual in 2006). It shows that two years ago, which by the way was right after a labor agreement was reached and several television contracts were finalized, clubs were doling out more long-term backloaded contracts, and more correctly, committing to more contract years, a sign that free agent contracts were in higher abundance.

The best examples of dipping deeply into the FA pool being the Giants dishing out 23 contract years to Rich Aurilia (2/$8M), Barry Bonds (1/$15.8M), Ray Durham (2/$14M), Pedro Feliz (1/$5.1M), Ryan Klesko (1/$1.75M), Steve Kline (2/$3.5M), Bengie Molina (3/$16M), Russ Ortiz (1/$380K), Dave Roberts (3/$18M), and yes, one Barry Zito (7/$126M).

But the Giants weren’t the only club rolling out long term deals a couple of years ago. After all, the Royals went 5/$55M for Gil Meche and the Cubs went 8/$136M for Alfonso Soriano as just two examples.

We can look at it another way…

This off-season the Yankees have obligated themselves to 24 contract years with 5 players (Burnett, Marte, Pettitte, Sabathia, and Teixeira) –  more than double what the second highest number of contract years is by the Cubs (11).  This year there are four clubs that see total contract years into double-digits

Yankees – 24 total contract years

• A.J. Burnett, SP – (5/$82.5M)
• Damaso Marte, RP – (3/$12M)
• Andy Pettitte, SP – (1/$5.5M)
• CC Sabathia, SP – (7/$161M)
• Mark Teixeira, 1B – (8/$180M)

Cubs – 11 total contract years

• Paul Bako, C – (1/$725K)
• Milton Bradley, RF – (3/$30M)
• Ryan Dempster, SP – (4/$52M)
• Joey Gathright, CF – (1/$800K)
• Aaron Miles, 2B – (2/$4.9M)

Braves – 10 total contract years

• Kenshin Kawakami, SP – (3/$23M)
• Derek Lowe, SP – (4/$60M)
• Greg Norton, LF – (1/$800K)
• David Ross, C – (2/$3M)

Dodgers – 10 total contract years

• Brad Ausmus, C – (1/$1M)
• Casey Blake, 3B – (3/$17.5M)
• Rafael Furcal, SS – (3/$30M)
• Mark Loretta, 2B – (1/$1.25M)
• Guillermo Mota, RP – (1/$2.35M)
• Randy Wolf, SP – (1/$5M)

Compare total contract figures in double-digits to last year (Yankees – 21, Astros – 10)

Compare the past two-years to 2006-07, and see the total contract years balloon: (Cubs – 29, Giants – 23, Red Sox – 22, Orioles – 20, Cardinals – 15, Dodgers – 14, Mets – 13, Yankees – 10).

Clearly, there’s a fundamental shift going on.

It should be noted that many of these contracts, especially in 2006-07, are of the 3-years and over variety. Backloaded free agent contracts can be good, if done sparingly. Done in large doses, they can hamstring a club for years; sometimes a decade or more. If you are a fan of the Yankees, and Cubs, this means trouble. The Yankees have done nearly $890 million worth of contracts with 16 free agent players accounting for 55 contract years over the last three years while the Cubs have $393.675 million worth of contracts with 17 free agent players accounting for 42 contract years. For the Yankees, only LaTroy Hawkins, Miguel Cairo, and Doug Mientkiewicz were one-year deals that have rolled off. Andy Pettitte has had three consecutive one-year deals totaling $37.5 million. For the Cubs, they have seen one-year deals with Daryle Ward, Wade Miller, Cliff Floyd and Jon Lieber roll off the books. Kerry Woods also rolled off the books seeing consecutive one-year deals totaling $5.95 million over the last three years.

It’s clear that MLB owners were seeing mountains of green dance in their heads during the 2006-07 off-season, hence their behavior. Others have speculated that GMs were still enamored with the notion of veteran free agents being of good value over their prime — the possible "PED factor".

Now, long-term investments have been pushed aside in favor of one or two-year deals, and a heavy dose minor league contracts. 

Lastly, we’ve looked at just a sliver of all that could be said about the free agent market over the past couple of years. Either on BizofBaseball.com or possibly here on MLBTR, I’ll be following up with some more. To add some fodder for conversation, here is some data to chew on. Remember, this shows contract totals that have been signed over the three-year period. Contracts may have dropped off, depending on length and signing period. The table is designed to show FA spending habits – those clubs that love to dip their toes in the FA market and those that dive head first:

is just talking about free agent signings… not extensions, and not salary arbitration contracts. On the latter, for those interested, Friday is the final day for salary arbitration eligible players to reach agreements or have hearings render decisions. Those that dig this sort of thing…

• Salary Arbitration Filings Tracker
• Salary Arbitration Figures Tracker
• Arbitration Scorecard

Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown’s full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.