Is the Slowest Offseason Ever Just a Blip?

If you’ve been wondering just how slow this offseason has been, Travis Sawchik has the answer for you: it is the slowest ever. Writing about the glacial pace of the market, Sawchik addressed both the short-term problem — that too many players need to find jobs — and hinted at possible longer-term issues caused by the current collective bargaining agreement, as well.

Whether the current issues will persist in subsequent years is a good question. Next winter, when Bryce Harper signs for $400 million or something, ownership’s reluctance to spend on the current free-agent class might seem like a distant memory. It is possible that a few of next offseason’s signings, however, will simply paper over issues that are likely to endure for the next half-decade.

One of the prominent theories regarding this slow winter has been that teams are saving up for a run at free agency next winter. That might help explain why, even after all of the current free agents find homes, total league-wide payroll in 2018 is likely to be comparable to 2017’s mark. The theory is that teams could be avoiding major commitments this year to save up for a bonanza next year. Perhaps that’s hypothesis will bear fruit. In order to make up for next offseason to compensate for this winter’s relative lack of activity, two conditions need to be met. First, next year’s crop of free agents will need to be composed of much better players and, second, teams will have to spend well beyond current levels.

Let’s start with the players involved. Harper and Manny Machado headline next year’s free-agent class. There’s really nobody close to those two this year. With each set to turn just 26 years old in 2019, both Harper and Machado seem likely to double the highest guarantee of any player this winter. After that pair, we find Charlie Blackmon, Josh Donaldson, Clayton Kershaw (who has an opt-out), and Dallas Keuchel. Blackmon and Donaldson are a little bit older than their free-agent peers, but both have been excellent in recent seasons.

The table below features the top-20 free agents available this offseason along with the best 20 players expected to enter free agency next season. The list for next season is taken mostly from a helpful post by David Schoenfield.

In addition to Kershaw, both Elvis Andrus and David Price have opt-outs for next offseason, meaning it’s only possible that they’ll test the mark, but not certain. Perhaps Garrett Richards and either Adam Jones or Justin Smoak would have to take their places on the table here. Regardless, that doesn’t change the overriding point — namely, that next year’s class represents a significant upgrade from this year.

Both by last season’s WAR and projected WAR for 2018, next year’s group has a one-win advantage per player over this current offseason’s crop. Some of these players might not be at their projected levels a year from now, but we have a very good base from which to start. It isn’t out of the realm of possibility to think that next year’s group is going to receive $200 million more in average annual value on their contracts. That alone could be a payroll increase of close to 5%. That would get growth to normal levels, although it wouldn’t make up for the stagnation we’re currently witnessing

Notably one of the other theories en vogue during this offseason — that teams are smarter about paying players into their 30s — is going to get a real test next offseason. After harper and Machado, all of the best available players will be 30 or older — and, in the case of some really good players, into their mid-30s. If teams are actually saving up for next offseason, they are saving up for a class full of older players.

As to the second condition required for next year’s market to compensate for the present one — that is, for teams to spend more overall — we will need to see teams actually attempting to contend. To that end, I began by estimating every club’s commitments for 2019. These estimates are pretty rough, especially as they relate to arbitration. As their are several prominent free agents still available at the moment, some of these figures are likely to be outdated in the coming weeks. That said, here’s where things stand right now, with many of the numbers from Cot’s Contracts.

The Chicago Cubs, with multiple, large long-term contracts and a group of young players all making their way through arbitration, feature the highest starting payroll for 2019 — near $180 million, based on the information we have right now. The only player with an opt-out removed from the calculations above is Clayton Kershaw; add him back in, and the Dodgers would actually be first. The order and team amounts aren’t all that important for right now. What is interesting, though, is that the total spending here amounts to roughly $3.45 billion. That figure is about $150 million shy of the estimated 2018 commitments prior to free agency this offseason. Once we finish free agency this year, I suspect that $150-million gap will be closed, with perhaps a slight increase over the starting point this offseason. That is both good and bad news for the players.

So the starting point for next year’s payrolls will be similar to this one’s. If teams are truly saving up — as in, if they really do have a lot of money to spend this offseason but are opting reserve it for next year — there will be very little excuse for not using it next year. To make up for the lack of spending this offseason, however, next year’s outlay needs to be massive. Assuming that 2018 Opening Day payrolls are at 2017 Opening Day levels, that means the owners will have spent around half-billion dollars on 2018 salaries in free agency. To make up for a lost year, teams will need to double that expenditure for 2019. That’s going to be difficult, even with a great class.

The table below shows the difference between the 2019 estimates and the estimates as they currently sit for this season.

It’s important to note that the number in the far right column represents what a team would have to spend simply in order to return to 2018 levels. If the Braves go out and spend $50 million in free agency next year, they aren’t actually adding money to overall payroll because they have so much coming off the books at the end of this next season. A large number in that far column is good for individual free agents, as it indicates that teams certainly have a lot of money. When it comes to growing payroll for the sport overall, however, the larger numbers in that rightmost column aren’t necessarily positive.

This is particularly important when we consider teams like the Blue Jays, Mets, Orioles, Pirates, and Royals. We don’t know yet, but it is certainly possible on or more of these teams could find themselves in a rebuilding situation and choose not to add more players. Other clubs would have to compensate for their lack of spending before payrolls overall would begin to increase.

It is true that there is about $300 million in spending this year that isn’t reflected in the chart above, but those figures have already been assumed in the discussion above. Given that most of the bigger expenditures will go to multi-year contracts for 2018 and 2019, most of the remaining expenditures will have no effect on the far-right column. Seeing teams that are expected to be in contention and competing for free agents at the bottom of the list above is a good thing for the players. That’s where a lot of the increases in spending should be coming from, like the Cardinals, Cubs, Phillies, and White Sox. The presence of the Angels and Yankees in the bottom half is also good for the players. Teams like the Dodgers and Red Sox are likely to spend a lot of money, but they have to burn through their expiring deals before they actually increase payroll.

Whether teams are actually saving money for next season is hard to say. Next year’s free-agent class is much better than this one, but teams are going to have spend an enormous amount of money next offseason to reach an average annual growth of around 5% when 2018 and -19 are combined. While that kind of spending is certainly possible, the lack of growth this offseason probably means baseball will need to have a few big offseasons in a row to make up for the Cold Stove of 2018.