Free Agent Lessons

Via BBTF, teams continue to learn and understand the perils of free agency:

The analytic segment of front offices run simulations of how similar players to those in current free agency aged, and the comparisons are not often pretty. In the past few weeks, I have talked to executives from more than half the teams, and in some form they all said: Why do we keep giving contracts of six, seven or more years, when we know how rare it is that those contracts still have value on the back end and how devastating that will be to future payrolls and maneuverability?

These are all things that, obviously, have been said before. But I notice a little more conviction right now. And I think the signing slow down is about teams trying harder than ever to limit — not the annual value — but the length of contracts. And, right now, when the market is deep in those starters and outfielders, there is no reason yet for any team to blink and stray too far beyond its comfort zone.

At some point, the player competition for the biggest contract moved from yearly value to total value. For example, the teams would have been better off giving someone like Albert Pujols $40 million a year for four years than $24 million a year for ten years. He still gets a lot of money, but the team can change the roster after a few seasons if the deal doesn’t work out that well. Players want the big, long-term deals, however.

The MLBPA wanted limited free agency for veterans to drive salary prices higher. Due to arbitration, this tends to drive all salaries for players with at least three years of service higher. That idea from the 1970s worked because teams were poorer then at judging talent. This was the age of paying for batting average, RBI, and wins, when a player was thought to peak at age 30. Front offices have learned, for the most part, the pitfalls of the system. They game it at the other end, keeping players in the minors longer so they get seven years instead of six from them, or long enough that the team captures all the peak years. The MLBPA needs to rethink free agency, so the young, good players capture the money, the money they are actually earning for the team. I suspect the union now is just as set in their ways as the owners were at the dawn of the free agent era, however.

from baseballmusings.com http://ift.tt/1LGAaVO