MLBTR Originals News & Rumors

Last year, I compiled a whole lot of data on free agent spending to assess overall spending trends over the 2007-08 to 2013-14 time period. That post was the culmination of a lot of research, and includes plenty of observations about the broader period in question which I will not repeat here.

At the time, the 2013-14 spending season was not quite wrapped up. It was apparent that it would blow the prior years out of the water in most respects, and indeed that proved to be the case. After performing a complete update, the final tab is a shade over $2.043B in overall outlay.

So, how does the current (2014-15) market stack up? Though we may see a few more MLB deals, it seems a reasonable time to assess. I broke out spending by team yesterday, but that only shows us strategic choices across a single market. Now, we’ll look at the market as a whole against prior years.

The first thing you’ll notice is that the total spend has declined for the first time since the 2009-10 period. But as a glance further down the table reveals, that is almost certainly the result of the number of players available (among other factors) than it is some pull-back in spending.

As the graph shows more visually, overall spending rate increases have continued, while the total outlay this season falls in line with a general upward curve.

Here are the annual increases and decreases; as you can see, last year’s market pushed a ton of total money over the prior season, but AAV actually grew more year-over-year this time around.

We’ll take a closer look at different classes of players (as I did with regard to the broader time period) in a separate post. But for now, take a look at the overall spending numbers isolated for multi-year contracts only. The total commitment per player and years per player both rose for those free agents who were marketable enough to secure pacts of two or more years in duration.

This year’s free agent market is all but over, with only a few players still available who could be candidates for major league deals. Let’s take a look at the overall spending on the year by team to see how it breaks down, using the MLBTR Free Agent Tracker (which I filtered to remove minor league deals, extensions, options, and foreign contracts).

We did the same thing last year, you may recall, and the results are rather different. For one thing, no team came anywhere near the Yankees’ spending (just shy of $500MM). For another, the total spend actually declined by about 13%. As recent historical results show, this year’s overall outlay is still a significant increase over other recent seasons, and differences in the player market may represent the primary explanation. Nevertheless, that fact suggests that further exploration is in order, which I will endeavor to do in the coming weeks.

Without further ado, here are the numbers, in table and chart form:

To view the table and graph from the app, use these links.

It appears that we may already be headed toward our first long-term deal of Spring Training, as Brian Dozier and the Twins are said to be making progress on a long-term deal. Fans should get accustomed to seeing a lot more of this in March, if history is any indication, as Spring Training is often used as a time for teams to negotiate long-term deals with up-and-coming players or to extend the contracts of veterans already under control. Here’s a look at the past couple of years’ worth of action on the March extension front, with an assist from the MLBTR Extension Tracker…

2014 (Extension Tracker link)

• Matt Carpenter, Cardinals agree to six-year, $52MM extension: Fresh off an MVP-caliber season, the 28-year-old Carpenter inked this pact. Like Dozier, he was between two and three years of service time. While he didn’t quite repeat his 2013 success, Carpenter enjoyed a strong season for the Redbirds and made his second straight All-Star team, doing little to suggest that the Cardinals erred in their decision to extend him.
• Glen Perkins, Twins agree to two-year, $14.1375MM extension: Perkins, too, made his second straight All-Star team in 2014, though a late-season forearm strain caused his numbers to dip dramatically (his ERA spike from 2.44 to 3.65 before he was shut down Sept. 16). A Minnesota native, Perkins said at the time of the deal he hoped to remain with the Twins for the long haul. The deal gave him two additional guaranteed years, while the Twins picked up a 2018 club option.
• David Ortiz, Red Sox agree to one-year, $16MM extension: Arguably the face of the Red Sox, Ortiz’s contract eliminated the concern of free agency this past offseason and gave Boston a pair of $10MM club options that can vest at 425 PAs and increase in worth with further PAs. Ortiz launched 35 homers last year, showing no signs of his age.
• Jose Quintana, White Sox agree to five-year, $21MM extension: Quintana’s deal looks like a brilliant move by the Sox on the heels of a second straight 200-inning season. Quintana notched a 3.32 ERA with even better marks in stats like FIP (2.81), and both his strikeout and walk rates trended in the right direction. Quintana secured his first fortune on the deal and can still hit the free agent market at 32 even if a pair of club options are exercised. Quintana’s guarantee is contingent on his Super Two status, and it seems likely that he’d have been a Super Two, meaning the figure will jump from $21MM to $26.5MM. Add in the options, and he can earn $47.5MM over seven years.
• Starling Marte, Pirates agree to six-year, $31MM extension: Marte shook off a rough start to the 2014 season and wound up finishing with better numbers than he did in his breakout 2013. He’s batted .286/.349/.447 over the past two seasons, flashing 15-homer power and 35-steal aptitude on the bases. He’s only 26, so he may have even more in the tank.
• Miguel Cabrera, Tigers agree to eight-year, $248MM extension: Cabrera’s monstrous extension came on the heels of a pair of MVPs and a Triple Crown, but he wasn’t fully healthy in 2014 and his otherworldly numbers dropped to “merely” excellent as a result. However, the notion of paying a 40-year-old Cabrera $32MM is a tough one to get behind, regardless of how great he’s been in his late 20s and early 30s.
• Mike Trout, Angels agree to six-year, $144.5MM extension: Trout didn’t go the Giancarlo Stanton route of signing a potentially lifetime contract, instead opting for a six-year deal that will let him hit free agency entering his age-29 season. If he keeps up his current pace, he could set a free agent record that won’t be touched for quite some time. Still just 23, Trout took home his first MVP last season with a .287/.377/.561 batting line and 36 homers.
• Yan Gomes, Indians agree to six-year, $23MM extension: Gomes wasn’t a household name at the time of the deal and that may still be the case, but he should be one. The Brazilian backstop has emerged as one of baseball’s best catchers, and he combined elite defense with a strong .278/.313/.472 batting line last season.

2013 (Extension Tracker link)

• Chris Sale, White Sox agree to five-year, $32.5MM extension: Sale is on a short list of baseball’s very best pitchers and may have won a Cy Young Award last season were it not for a stint on the disabled list that limited him to 174 innings. His contract allows him to hit the open market at age 31, even if (or, when) both of his options are exercised by Chicago, and in the meantime, the Sox will enjoy a pitcher that has worked to a 2.79 ERA in three full seasons of rotation work.
• Allen Craig, Cardinals agree to five year, $31MM extension: Craig is one of few names on this list whose deal has gone somewhat south. It looked like a sound move in year one, but a foot injury in 2014 resulted in an abymal .215/.279/.315 slash line. There’s still time to rebound and easily justify the deal, but there’s no certainty of that happening at this time, and he’s already been flipped to the Red Sox in the John Lackey trade.
• Carlos Gomez, Brewers agree to three-year, $24MM extension: Gomez was the rare Scott Boras client that signed an extension, and Boras may use Gomez as the poster boy for future clients shying away from long-term deals. In what would have been his walk year, Gomez hit .284/.338/.506 with 24 homers, 40 steals and elite defense. That production, heading into his age-28 season, could have resulted in an enormous contract. However, Gomez still stands to be paid handsomely following the 2016 season; he more or less repeated those elite numbers in 2014 and will hit the open market heading into his age-30 campaign.
• J.A. Happ, Blue Jays agree to one-year, $5.4MM extension: Happ signed a somewhat bizarre extension that bought out his final year of arbitration eligibility at the price of surrendering a year of team control via club option, and the Mariners will be the ones to receive whatever value he provides in that option year, as he was flipped to Seattle for Michael Saunders in a one-for-one swap. Happ recorded a 4.22 ERA in 158 frames last season but will be in a much better pitchers’ park in 2015.
• Adam Wainwright, Cardinals agree to five-year, $97.5MM extension: Wainwright is entering the second season of this deal and his been his typically excellent self since returning from Tommy John surgery in 2012. Some are concerned about the mileage on his arm and his age, but he’s still among the top pitchers in the National League. Wainwright posted a 2.38 ERA in 227 innings last season and finished third in Cy Young voting.
• Buster Posey, Giants agree to eight-year, $159MM extension: Posey signed on to be the face of the franchise in San Francisco, and he’s been just that over the past two seasons (perhaps alongside Madison Bumgarner), hitting .303/.368/.470 in 1200 plate appearances. That production becomes even more impressive when considering it’s coming from a catcher who plays half his games in the cavernous AT&T Park.
• Paul Goldschmidt, Diamondbacks agree to five-year, $32MM extension: Speaking of faces of the franchise, Goldschmidt has undoubtedly become that in Arizona. A fractured hand suffered when he was hit by a pitch cut his 2014 season short, but Goldy’s hit .302/.399/.548 over the past two seasons, homering at a pace of 34 per 162 games played in that time. He’s among baseball’s very best overall hitters.
• Justin Verlander, Tigers agree to five-year, $140MM extension: Verlander was excellent in 2013 before struggling through perhaps his worst season in 2014. He underwent core muscle surgery on his abdomen last January, which may have impacted his season, but he’ll need to bounce back from his 4.54 ERA and see his 6.9 K/9 rebound, because his extension technically begins this year. (He was already controlled through 2014 when he signed.) Verlander will be paid $28MM annually through 2019 — his age-36 season.

A look back at the original reporting and analysis found on MLBTR the last seven days:

• MLB Trade Rumors Podcast featured host Jeff Todd discussing the Red Sox’s signing of Yoan Moncada and the rest of the Cuban market with MLB.com national reporter Jesse Sanchez. MLBTR’s Mark Polishuk then joined Jeff to review this past offseason’s free agent signings with a focus on the White Sox and Pirates. A new edition of MLB Trade Rumors Podcast will be released every Thursday and can be accessed on iTunes, SoundCloud, and Stitcher.
• Steve Adams spoke with Giants Assistant GM Bobby Evans, Braves Assistant GM John Coppolella, and Angels Assistant GM Matt Klentak about a club’s “responsibility” in the arbitration process.
• Tim Dierkes listed the position of MLBTR’s top 2016 free agents on in-season extension talks.
• Jeff named eight potential destinations for Rafael Soriano. More than a quarter of MLBTR readers see the Blue Jays signing the right-handed reliever.
• Jeff was the first to report Wily Mo Pena agreed to a one-year contract with NPB’s Rakuten Eagles.
• Steve hosted this week’s live chat.
• Zach Links assembled the best of the baseball blogosphere for you in Baseball Blogs Weigh In.

This offseason saw more arbitration hearings than any in recent history, with 14 players going to trial to determine their 2015 salaries. Many of the hearings were over relatively small amounts of money, a few hundred thousand dollars, prompting frustration from fans who view the process as a cheap means of cost-savings. However, executives who spoke to MLBTR used a different word — “responsibility” — to describe the process. Not financial responsibility in regards to their own payroll, but rather, responsibility to the rest of the league.

“At some point, there’s a sense of fairness to the fact that this deal not only reflects on this player and this club, but that this deal also reflects on other similar players and similar clubs,” Giants assistant GM Bobby Evans told MLBTR. “So you have somewhat of a responsibility within the market to be reasonable on both sides so you’re maintaining the correct market for a player and not creating an unfair low market or an unfair high market.”

As MLBTR contributor Matt Swartz has explained throughout his Arbitration Breakdown series, arbitration salaries are largely determined based on statistically similar players with similar service time to a player that is currently eligible. “You don’t want to go out there and make a deal that wouldn’t be fair on either side for the players that are not involved in the deal,” said Evans. In a strange way, the result of this sense of responsibility is a sense of collaboration among entities that spend every other waking moment trying to gain an edge over each other.

“It’s the one time of the year — at least in the baseball operations realm — where the clubs are working together,” said an AL exec who preferred not to be named. “Usually we’re competing on the field … we’re competing for player talent in free agency. We’re competing to get the better end of a trade. There’s 30 of us and we’re all trying to win the World Series. But, I feel like there’s a collective responsibility that we all feel to each other in salary arbitration to not try to allow that market to escalate too far.”

It may be puzzling to see a team head to trial over sums as seemingly negligible as $200K (Jerry Blevins) or $450K (Vance Worley), but when it comes to the arbitration process, “There is no such thing as trivial amounts of money,” Braves assistant GM John Coppolella said to MLBTR. “Whatever you negotiate is not only behalf of your club and ownership, but also other teams throughout the league.”

Perhaps of greater concern to fans than the financial implications is the potential to damage the relationship with a player. Arbitration hearings aren’t a friendly process; the player and his representatives are in the room with representatives from the team as the two sides argue back and forth over a player’s strengths and weaknesses. Last year, then-Indians reliever Vinnie Pestano expressed surprise to hear the team use statements he’d made to the media against him in a hearing that he eventually lost. Pestano said at the time that he “definitely” thought it would affect his views going forward, and while he didn’t express any ill will toward the team, it may be telling that he was traded to the Angels roughly six months after his hearing.

“If you look at the history of players who have gone to arbitration hearings, for whatever reason, very few remain with the same team for the long term,” said Coppolella. “I don’t think the hearings are contentious per se, but the process isn’t exactly friendly and heartwarming.” The Braves did have a hearing with Mike Minor this offseason, from which Minor emerged victorious, but Minor told reporters after the fact that it was “just business” and he didn’t have any grudges against the team.

The player’s acceptance of the situation may come down to how the team approaches their side of the hearing. As one former NL GM told MLBTR’s Zach Links, “It was always very important that in any arbitration case … I wanted to see us be straight factually, bottom line. Never ever do anything to diminish the ability or the skills of the player. … What arbitration is all about is reaching a comparative level. … The meeting isn’t the easiest path, but you don’t want to damage any relationships.”

Ultimately, the impact on the player likely varies from case to case, however. As Evans explained, “Some players might just be very curious about the process and therefore not be the least bit offended. … Some players may be inconvenienced by it and irritated that the club wasn’t making an offer to their liking. … It really depends on the spirit of the negotiation.” The aforementioned AL exec had a similar notion: “Some players and some teams are going to be more emotional and more stubborn than others. … Sometimes you know who those players are. You’ll say ‘This guy is not the right guy to take to a hearing. He’s a little soft. This could stick with him for awhile.’ Other players are much more corporate and can handle it.”

I asked Evans if that makes it more difficult to negotiate with players with whom the team does not have a longstanding relationship. For instance, San Francisco acquired third baseman Casey McGehee from the Marlins this offseason and immediately had to begin negotiating a contract in an effort to avoid arbitration. Evans felt that history was secondary to how the two sides handled the negotiation, adding that he was happy to have avoided a hearing.

Another similar case to McGehee is that of the Angels and outfielder Matt Joyce. Angels assistant GM Matt Klentak went a bit more in depth when discussing the pros and cons of negotiating with a player just acquired in an offseason trade. “I think sometimes it’s easier to go to a hearing with a player you’ve never met,” said Klentak (although he was glad to have avoided one with Joyce). He continued that while teams try to be objective in these proceedings, it’s difficult to completely eliminate the bond that has formed when seeing a player develop, triumph and rise through a system to the point where he’s eligible for arbitration. That element is removed when negotiating with new players.

“I still haven’t met Matt Joyce. I’ve negotiated his contract with his agent, we’ve traded for him, but I’ve never personally met him. … I’d really have hated for the first time I met this guy to be wearing a suit, sitting across a table, arguing over a million dollars. But, that is easier when you don’t know the person.”

Arbitration can be contentious, and for onlookers it’s easy to question the motives of a team or of a player when seemingly small gaps are bridged through a potentially inflammatory process like a hearing. But those small gaps compound over time, and the overriding theme when speaking with executives is that the responsibility of managing a market shared by all sometimes makes these hearings a necessary evil.

A look back at the original reporting and analysis found on MLBTR this past week:

• MLB Trade Rumors Podcast featured host Jeff Todd discussing the latest news and notes with guests Ben Nicholson-Smith of Sportsnet and MLBTR’s Tim Dierkes. A new edition of MLB Trade Rumors Podcast drops every Thursday and can be accessed on iTunes, SoundCloud, and Stitcher.
• Tim unveiled the first installment of MLBTR’s 2016 Free Agent Power Rankings. Tim’s top three are Justin Upton, Jason Heyward, and David Price.
• Tim was the first to report left-hander Mike Minor won his arbitration hearing against the Braves earning a 2015 salary of $5.6MM.
• Steve Adams listed five possible destinations for free agent right-hander Chris Young.
• Charlie Wilmoth examined the results of the 14 arbitration hearings held this offseason, the most since 2001.
• Steve hosted the weekly live chat.
• Zach Links gathered the best the baseball corner of the web had to offer in Baseball Blogs Weigh In.