Baseball players and the union that represents them have long accepted a system in which salaries are suppressed for six years, until free agents can hit the open market and make tens of millions of dollars, and great players can make hundreds of millions. That system is now broken, as teams have decided they’d rather not spend big money on the latter half of players’ careers. Last offseason, third baseman Mike Moustakas was projected to land a five-year, $85 million contract. After watching his limited market dry up, he eventually re-signed with the Kansas City Royals for one year and $6.5 million. Lance Lynn, a veteran pitcher coming off a run of solid seasons, was predicted to land a $48–60 million deal. He settled for one year and $12 million.
The sport’s free agents have learned the hard way that it’s a big problem to have the most team-friendly aspect of the game’s economic system tied to an enforceable contract while the most player-friendly element is simply a matter of precedent: Only the bad half is guaranteed. Opportunities to correct these structural issues come once every four to five years, when the league’s collective bargaining agreement comes up for renewal. The current one expires in 2021, and in the negotiations to come, the Major League Baseball Players Association should have a single objective: make free agency start earlier.
The years leading up to free agency are governed by an entrenched but arbitrary system. Players make the league minimum ($545,000 for a first-year player in 2018) for three years, followed by three years in which the team and player either come to a mutual agreement or one is made for them by a third-party arbitrator. The median age of the 262 players who made their major-league debuts last year was 24 years and three months. The pitchers and hitters that teams want to hang onto for six years won’t sniff the open market until after their 30th birthdays. By that point, every one of them will be past their peak value and will be projected to lose a little bit of their physical abilities each year.
While athletes are believed to reach their physical peak in their early 20s, the specific skills needed to play baseball at the highest level require years of practice. As training programs have improved, players have started to develop those necessary skills earlier in their careers. In 1997, 29-year-olds provided the most value of any age year (using FanGraphs’ Wins Above Replacement stat). Ten years later, it was 28-year-olds pulling the most weight. Last year, the 27-year-olds were the top producers. The upshot here is that players’ best seasons have shifted from the start of free agency to a few years before. This has had a profound effect on what players can command on the open market.
Last month, MLBPA executive director Tony Clark strongly hinted that owners have colluded to suppress players’ salaries. “What we experienced last offseason was a direct attack on free agency, which has been the bedrock of our economic system,” Clark said. Multiple players claimed they received offers from different teams that were nearly identical, or multiple offers in the same week after months of silence.
Yet, if we ignore the anecdotes and look at the final contracts, it’s hard to make the case that teams were underspending. The two biggest contracts of the offseason, signed by first baseman Eric Hosmer and pitcher Yu Darvish, already look like overpays, as neither has impressed this year. Pitcher Alex Cobb’s $57 million deal was perplexing when it was signed and is looking even worse now.
Now more than ever, teams cannot build championship contenders through free agency. Even the Yankees, once famous for picking their targets and handing them preposterously large deals, have been led this year by a 26-year-old (Aaron Judge) and 24-year-old (Luis Severino) collecting league-minimum salaries and a pair of 28-year-olds, Aaron Hicks and Didi Gregorius, who have yet to reach free agency. The best franchises have foundations of young stars, with free agents filling in around them. Of the five top vote-getters for American League MVP last year, three were on league minimum salaries and the other two were on long-term contracts signed before they had reached free agency—a tactic teams use to lock in their best players at affordable rates.
These pre–free agency extensions leverage teams’ structural advantages. Franchises often approach their best players during the league-minimum years and offer lifelong financial security. In exchange, the team extends its control over a player by a few extra years at a below-market rate. The sport’s two most-valuable players this year according to FanGraphs, Mike Trout and José Ramírez, as well as the best pitcher, Chris Sale, are on such deals. None of the top nine hitters in the game have reached free agency.
The assumption used to be that baseball’s young stars would eventually cash in, but for many players that’s no longer a given. Oft-injured former Mets ace Matt Harvey, now just months away from free agency, looks like he barely belongs in the major leagues. Same for the Angels’ Garrett Richards, who will spend what would be his first free agent year recovering from Tommy John surgery. And even when players can maintain their health, being a decent 31-year-old ballplayer just doesn’t pay like it used to.
In negotiating the sport’s current collective bargaining agreement, the MLBPA made no real attempt to fight for earlier free agency, instead securing quality of life improvements such as nap rooms and team chefs. This is in part because the union didn’t anticipate the decline in free-agent outlays, as teams were spending more freely as recently as two years ago, the most recent time the two sides negotiated. More fundamentally, the MLBPA has never cared all that much about younger players being underpaid. The union is generally thought to prioritize veterans, and the suppression of salaries among the twentysomething crowd leaves more dollars for the over-30 group. After all, Clark fumes over last year’s free agent salaries even as he accepts as a given that many of the game’s superstars, who could rake in nine-figure salaries if they were suddenly declared free agents, earn less than $1 million per year and have no ability to negotiate their contracts. And in recent bargaining rounds, the two sides agreed to changes that placed soft caps on what teams can spend signing draftees and hard caps on the bonuses they can give to international amateur free agents, further reducing the bargaining power of talented young players.
The MLBPA must put more focus on where the sport’s on-field value is coming from. In the next CBA negotiation, Clark could pursue concessions on higher minimum salaries or swapping a league minimum year for a fourth arbitration year (perhaps eliminating the incredibly annoying Super Two system, which I don’t have space to get into here). By raising the price of younger players, the over-30 group might start to look more appealing and command higher salaries. The MLBPA might also call for players of a certain age or experience level to enter into restricted free agency. (The NHL, NBA, and NFL all have some form of restricted free agency; MLB does not.) Under such a system, a player could agree to a contract with any team in the league, but the controlling team would have the right to match this offer. If Clark is up for waging a serious fight with the owners, he could push to get players into free agency earlier by eliminating a year of team control.
This offseason was supposed to reset the landscape, as a group once hailed as the greatest free agent class of all time hits the open market. Superstars Bryce Harper, Manny Machado, Josh Donaldson, A.J. Pollock, and (assuming he opts out of his current deal) Clayton Kershaw headline an incredible class that includes plenty of depth for teams that won’t be chasing those names.
Yet, even for this historic group, free agency may have come a year or two too late. Machado is still one of the best players in the game, but Harper is struggling with defensive shifts and an uptick in strikeouts. Donaldson last played in May due to injury. Kershaw and Pollock also missed time this year and seem to have recurring issues with staying on the field. Many other free-agents-to-be have lost some luster as well. Brian Dozier would have landed a huge contract after two star years in 2016 and 2017, but this season he’s been more average than good. Andrew McCutchen, an MVP winner at age 27, might have become a free agent after the following (equally excellent) year, but he signed a long-term deal while he was still making the league minimum. Instead, he is about to hit the open market for the first time at age 32. At this point in his career, McCutchen is a good hitter who no longer adds surplus value as a defender or baserunner, and teams won’t make big concessions to add a player like that.
Even in the unlikely event that leaked documents were to prove beyond a shadow of a doubt that teams were colluding last offseason, the MLBPA’s problems won’t have changed. It makes little sense for teams to place big bets on players in their 30s when they can place much smaller bets on players in their 20s. Raising the minimum salary would help a little, and replacing a year at the league minimum for a year of arbitration would help more, but if the MLBPA still wants free agency to mean what it once did, it will need to give players a chance to sell their services when teams still want to buy them. Anything less amounts to playing a game in which the rules are stacked against them.