Players Don’t Become Terrible at 30
One of the oft-mentioned reasons for the slow free-agent market this winter is that teams are thinking on the same wavelength when it comes to evaluating players. One of the tenets of this theory is that free agents are bad bets because of the aging process. As players age, especially after 30, they get worse on the field, and teams don’t want to get stuck with those decline years.
There is a whole lot of reason in that explanation for the offseason’s lack of activity. There’s also a little bit of faulty logic regarding the aging process, particularly when it comes to this year’s free-agent class and the two biggest names out there, Eric Hosmer and J.D. Martinez.
The first flaw in this argument is based on a misunderstanding of how clubs are compensating players. All teams — and especially the “smart” ones — know and understand that the final year or years of a free-agent contract are unlikely to be valuable in terms of strict wins-per-dollar calculus. It’s generally accepted that those “out” years are going to be mostly dead weight. Players are typically signed to deals for which the total guarantee is equally distributed over the course of a deal. The team isn’t paying an equal amount every year expecting metronomic production over the life of a contract. They expect to receive a surplus of value in the early years and a deficit in latter years. The hope is that the early years compensate for the latter ones.
Teams could, in theory, compensate players a greater amount at the beginning of a contract than at the end, but most clubs choose not to do this because, by spreading the payments out, they get to keep more money in the present, which is more valuable to them. If a team doesn’t want to add, say, a seventh year at $25 million to Eric Hosmer’s offer, it isn’t because they believe he isn’t going to be worth $25 million in that seventh year. It’s because they believe he won’t be worth extra $25 million over the first six years. The value in the seventh year is going to be close to zero in terms of expectations. That’s not the main point I’m trying to make in this post, but it does deserve a mention.