The Free Agent Salary Dominoes
As baseball adjusts to the realities of the novel coronavirus, many decisions concerning the upcoming season loom. Yesterday, my colleague Craig Edwards discussed the service time issues likely to bedevil the sport’s return to normalcy, whenever that (hopefully) occurs. It’s nearly impossible to underrate how big of a kerfuffle this could cause. Service time is one of the most significant drivers of how a large percentage of baseball’s revenue pot ends up being divvied out. This ain’t a pot of delicious chili, but one that amounted to nearly $11 billion in 2019. Players and teams have a lot invested in this fight. For teams, those cost-controlled years mean massive profits. For players, accruing service time is essential to moving up the incline from pennies to cash windfall they might enjoy in free agency.
If, in the worst-case scenario, the 2020 season isn’t played at all, baseball will be in uncharted waters. This year’s revenue won’t be coming back, and the negotiations between owners and the union are, for all practical reasons, a hashing-out of who takes the biggest economic hit for that year of missing dollars. If they prove to be unsuccessful at gaining a whole year of service time after a lost season, players nearing free agency will see large reductions in their next contracts, simply by virtue of being a year older when they hit the market.
How much would hitting free agency a year later affect baseball’s best upcoming free agents? To get a sense, I took some of the biggest names anticipated to hit free agency for the first time over the next two offseasons and projected five-year contracts based on their “normal” free agent entry season, along with the projections if they hit free agency a year later:
| Player | FA Going Into To | Five-Year Contract ($M) | Five-Year Contract Delayed ($M) | Difference ($M) |
|---|---|---|---|---|
| Kris Bryant | 2022 | 124.3 | 92.6 | -31.7 |
| Mookie Betts | 2021 | 201.9 | 173.1 | -28.8 |
| Marcus Semien | 2021 | 120.4 | 96.1 | -24.3 |
| Francisco Lindor | 2022 | 236.0 | 212.7 | -23.3 |
| George Springer | 2021 | 116.2 | 93.0 | -23.2 |
| Trevor Bauer | 2021 | 118.7 | 95.9 | -22.8 |
| Trevor Story | 2022 | 144.7 | 123.3 | -21.4 |
| J.T. Realmuto | 2021 | 142.7 | 121.6 | -21.1 |
| Javier Báez | 2022 | 132.9 | 112.2 | -20.7 |
| Jon Gray | 2022 | 99.9 | 80.0 | -19.9 |
| Corey Seager | 2022 | 162.7 | 143.5 | -19.2 |
| James Paxton | 2021 | 101.4 | 82.6 | -18.8 |
| Marcus Stroman | 2021 | 99.9 | 82.7 | -17.2 |
| Carlos Correa | 2022 | 130.9 | 118.5 | -12.4 |
| Noah Syndergaard | 2022 | 142.3 | 130.8 | -11.5 |
In total, these 15 free agents to-be project to make $2.1 billion over their first five years after hitting free agency. Delaying service time by a year projects to cost this group $316 million. And that’s just 15 players; everyone in the league, from Fernando Abad to Mike Zunino would have to wait another year until they could take open bids. That’s a rather poor return after losing a whole season of their career.
It’s especially cruel that Kris Bryant is the player on this list who ZiPS projects to lose the most money. After all, not only would he lose $31.7 million over the following five years, he also was the victim of the Cubs’ service-time shenanigans. That means one can make the case that, unless you actually thought that Kris Bryant needed a few weeks in 2015 to become a better player than Mike Olt, the 2020 worst-case scenario would delay Bryant’s free agency by two full years.
The unfortunate thing is that the flip side — giving everyone a year of service time after a lost 2020 season — doesn’t feel totally satisfactory, either. Making Mookie Betts have to wait an additional year to become a free agent feels unfair, but so does the Dodgers having traded Alex Verdugo and Jeter Downs for nobody. One of those outcomes is obviously worse – the Dodgers can weather their disappointment much more easily. But there’s something universally unsatisfying about the Boston Red Sox becoming a massive beneficiary of their decision to trade Betts!
For further context, we’ll look to the past. One of the examples I like to use is Alex Rodriguez’s contract.
Going into his 2001 deal with the Rangers, ZiPS, if it had existed at the time, would have projected a $254.9 million contract. This is based on 82 projected wins (assuming Rodriguez stayed at shortstop) and the going rate of a win in free agency growing from $2.5 million in 2001 to $3.9 million in 2010. A-Rod was 25 going into the 2001 season, but re-projecting him as hitting the market at different ages drastically changes how much ZiPS would have projected him to get:
| A-Rod 2001 Age | Projected 10-Year WAR | Projected Salary ($M) |
|---|---|---|
| 25 | 82.0 | 256.4 |
| 26 | 71.5 | 223.6 |
| 27 | 62.7 | 196.1 |
| 28 | 56.6 | 177.0 |
| 29 | 50.5 | 157.9 |
| 30 | 46.9 | 146.6 |
| 31 | 40.6 | 126.9 |
If the projections included a change of home park to Yankee Stadium and a move to third base, A-Rod’s win projection for 2001-2010 drops to 74.1 wins (70.0 was the actual result). The first A-Rod contract was fine; it was the Yankees giving him a new 10-year deal after he opted-out that was the disaster.
Every additional year that passed would likely have cost A-Rod $20 million-$30 million in projected salary, assuming the team had approached this question using a method similar to ZiPS. Twenty years (!) after A-Rod’s deal with the Rangers, a lot more teams use models similar to ZiPS than would have at the time.
Hopefully, the worst-case scenario doesn’t come to pass and we get a meaningful-if-shortened 2020 season. But if 2020 is gone, the MLBPA and the owners are likely going to have to spend the time finding a creative resolution. If the inability to solve the service time issue gets folded into already tense CBA negotiations, 2020 might not be the only season that ends up shortened or unplayed.
Dan Szymborski is a senior writer for FanGraphs and the developer of the ZiPS projection system. He was a writer for ESPN.com from 2010-2018, a regular guest on a number of radio shows and podcasts, and a voting BBWAA member. He also maintains a terrible Twitter account at @DSzymborski.
The owners and their legions of familiars, schills, and serfs:
https://www.youtube.com/watch?v=S7b8ADhadJU
A tiny portion of the huge future savings can go towards the paid outs necessary to secure the multiple stadiums they will be getting from the taxpayers…What just a massive win this whole situation is going to be for these things that run the simulation
Wow, lot to think about there 🙂
I’m not sure what the ‘fair’ answer is here. The players have been waiting for this for 6+ years and them losing a high paid year of FA hurts them as you noted, but these cost controlled players are assets of the game and owners build around them (with the Dodgers trade for Betts being the most obvious example). Even beyond FA, what about the players still accruing service time. If we have a 1/2 season and a rookie plays the entire season, do they get credit for a season of time or just 1/2 of a season?
Lots of things to work out and not everyone is going to be happy.
On top of all of that, some players need a certain amount of service time to hit FA. Using Mookie as an example, he’s 102 service time days from 6 years accrued. If the season is only 80 games, does he still get to FA?
When you show the five year contract estimate if they miss a year of service time, does that include the money they make going through arb an additional time? Because Betts could get more than that difference. Or are the players even still getting paid this year?
Right now I think the Players best move would be to bring the minor league players into the union, demand a full year of service time, back pay for minor leaguers , living wages for minor leaguers going forward, $1 million minimum starting salaries, arbitration after one year of service time, restricted free agency starting after 3 years of service time, and unrestricted free agency after 5 years of service time. The initial year of service time accrues after 15 days of major league service time . Year two accrues after 15 days in the next season and so on. Minor leaguers become unrestricted free agents at age 25 or after 5 years which ever is earlier.
If the owners don’t accept the above terms the union (which now includes minor leaguers) can walk and form their own league. Players would and minor leaguers would stay grouped with their prior organization. Enough minor league teams would break ranks to provide a sufficient number of playing fields to continue the minor league season in a manner that doesn’t negatively affect player development. Meanwhile most of the New Major League teams could fairly easily use alternate venues in their current cities. Bonus, this strategy would get the current Rays out of Tropicana and likely out of Tampa and the A’s out of the Colosseum. While this strategy may necessitate fewer than 162 games being played it would still result in more games being played than in 2020. The new league should be able to fund player salaries with out too many problems by quickly selling broadcast rights to traditional media and online streaming platforms.
Meanwhile the Union could challenge MLB’s antitrust exemption in Court, where they would likely win.
As things are, minor leaguers need their own union
The MLBPA has a long history of throwing minor leaguers overboard, to sink or swim, to favor the older payers in FA.
They can’t be trusted to negotiate for the minor leaguers.
More accurately: MLB and MiL owners have had a long history of throwing minor leaguers overboard and getting their legions of schills, familiars, and serfs to pin it on the MLBPA and players somehow. How does it add up in anyone’s head that the players are responsible for paying the other players?
But when you look at it from a slightly different perspective, there is something universally satisfying about the Red Sox keeping Verdugo, Downs, and Wong for free.
at first I was joking that John Henry knew this was coming, but now I’m not so sure it’s a joke.
The owners must bear 100% of lost time. Careers are a diminishing asset, ownership quite the reverse. Special dispensations can be made to apply to rental trades like Betts, but not to the players within them.
I think the owners have the leverage here. I don’t think the public would side with players demanding full payment for a limited or cancelled season, when unemployment is skyrocketing and people are getting their power shut off.
I guess there could be an opposing argument to this, but optimistically I would hope that a year of not playing baseball would not be as draining as a year of playing baseball would be, and thus players may not “age” as fully as they otherwise would. Sure, a lot of aging is just completely natural bodily and mental decline, but you’d think that the grind of MLB seasons exacerbates aging to a certain degree, especially for pitchers and catchers.
Also, if there isn’t a season, I doubt seriously it will be the younger players like Betts who avoid detriment. My guess is that players signed to guaranteed deals will have those extended as if this year didn’t happen and there might be some concessions for other players but they will face the brunt of whatever negative consequences come down on the players. And Pujols will now be signed through age 44!
i feel like there’s something missing in the Bryant calculation. 30MM less at 1 year older seems too far. That’s saying he’d get 6MM less per year? Maybe more likely less years.
If I’m understanding it correctly, essentially what is happening is you are replacing 1 year of Bryant at 29 with a season at 34. If he were to sign a 1 year deal at 29, I could see him getting $45M. If we assume that’s what Zips spits out for his age 29 season, that would mean he would be projected to score a $13.3M on a 1 year deal at 34 which seems a little low to me but not completely unreasonable. I would think we would be able to get $20M at 34 and the difference should really be about $25M, not $31.7M but I think it’s in the right ballpark.
Actually, the more I look into this, the less it makes sense. Zips projects Bryant at 3.9 WAR in his age 29 season which equates to $35.1 assuming $9M/win. That would mean his age 34 season would project for $3.4M which equates to less than 0.4 WAR….or perhaps I’m just misunderstanding this all together.
This is an example of why, when in doubt, it makes sense for a team to trade a Betts for future assets. There was ALWAYS a chance that the Dodgers were going to get nothing for Verdugo, et al. Betts could have torn an ACL in spring training. This isn’t the expected reason for the Dodgers getting 0.0 WAR, but that outcome was always a decent size chunk of the pie chart of possibilities.
What would worry me in trying to schedule an MLB season is the likelihood that even after the virus quiets down and the so called curve is flattened – if even 1 player tests positive they will likely need to quarantine the whole team for 2 weeks.
I think team sports are going to be difficult to get going again until there is a vaccine or the so called herd immunity is established. And I am doubtful that will happen in time to get a baseball season in.
In wonder if this would effect how teams call up players from the minors as well. If Dustin May gets called up on June 15th and then a player on the AAA squad tests positive on June 20th, does now the whole major league squad, plus any team they played in those 5 days, need to be quarantined for 14 days? Perhaps they will lighten up on the quarantine requirements but one player testing positives in the majors, and potentially the minors, could effectively end the season for everyone.
Finally. Someone gets it. This is not ending anytime soon. There is a non zero chance that MLB is stupid enough to start the season at some point, But it is approaching zero at the same exponential rate that the virus is infecting people.