The Most Important Thing About Free Agents
I was listening to a relatively prominent podcast a few days ago, just before David Price signed with the Red Sox, on which one of the commenters who has connections inside baseball said he knew Price wouldn’t go to the highest bidder. He isn’t that kind of guy, the commenter stated, matter-of-factly (that’s a paraphrase). To further paraphrase: he cares about location, about comfort, about winning. Then Price took the highest offer from a last place team, the most prominent player on which he’s reportedly had a feud.
As it turns out, Price is exactly that kind of guy. Which isn’t to say that being that kind of guy is bad, wrong, or indeed anything negative at all. [Insert boilerplate about how Price has earned everything he can get and also blah blah blah.] Even so, David Price’s seven year deal with the Red Sox makes some loud statements about the nature of free agency, statements that will almost assuredly be ignored by many, but statements that shouldn’t be. Because they are true, and the truth will set you free, and freedom is not free, like this bagel I’m eating, and bagels are delicious. So there.
Nowhere do people lie as much as when money is involved, and free agency is mostly about money so that’s precisely why we constantly hear it isn’t. Fans don’t want to hear a player picked a team because they offered the most money, and as a result I would be shocked if agents didn’t prepare players for their new homes by specifically stating not to mention that as a reason if asked. For example, David Price will be introduced in Boston today. As stated above, he took the highest offer in perhaps the most transparent way one could conceive of. Yet you will hear nothing about the Red Sox’ offer from Price. Only about the lore of pitching for the Red Sox, their history, the wonderful fans (all fans are wonderful after you’ve signed a new contract), and of course how amazing it will be to call Fenway Park home.*
*“Welcome to Fenway, Jimmy!”
“Thanks, dad! It’s awesome!”
“I knew you’d like it, son.”
“Hey, dad, what’s that over there? It looks like a tent.”
“Oh, that’s David Price’s new home.”
“That’s… weird. Isn’t he making two hundred million dollars?”
“He sure is, Jimmy. He sure is.”
David Price has signed with the Red Sox and it has nothing to do with the $217 million they’ve promised him. Except, that’s also the only reason.
There may be some instances where players take less money. Maybe you can think of one or two. Andrew Miller reportedly turned down some extra dollars from Houston last off-season to sign with the Yankees. Cliff Lee turned down the Yankees though for a higher AAV and fewer years to return to Philadelphia.
There are a number of counterarguments, however. Alex Rodriguez: money; Albert Pujols: money; Robinson Cano: money; CC Sabathia: money; Jon Lester: money; Jacoby Ellsbury: money; Carl Crawford: money; Shin-Soo Choo, Jayson Werth, Josh Hamilton and on and on and on.
Price was reportedly close to signing with the St. Louis Cardinals. They offered him tons of money, a winning environment, a strong team history, the best fans in baseball ™, good teammates, a less demanding local media, and a location relatively close to his home in Nashville, Tennessee. Sounds perfect, right? Maybe it was. And yet Price will be fitted for a Red Sox uniform later today. I’ll let you guess the reason.
At least some of this isn’t on the specific player, as there is likely considerable union pressure to take the best contract. The players at the top are responsible, so the argument goes, for pushing the boundaries of player contracts forward. It’s a bit like arbitration. If a player takes less money in his first year of arbitration, the next year’s numbers will be based off of that lesser figure, whereas if that initial figure is higher, next season’s floor will be higher. It makes sense, and it’s a worthwhile point, though it’s also worth noting that sometimes, it might have been best for the player to remain in a place where he was comfortable in the first place (Carl Crawford and Josh Hamilton come to mind).
So if we coin the IMOSSBMAOG rule (It’s Money Only So Stop Bothering Me About Other Garbage), we can look at the free agency of other players. Let’s take Zack Greinke who is reported to be picking between the Giants and Dodgers. It has been mentioned that the Dodgers would be a better fit because Greinke has great friends on the team, knows the pitching coach, and already owns a house in the L.A. area. If we run that through IMOSSBMAOG we can see that Greinke will in fact pick the Dodgers to sign with, as long as they offer him more money than the Giants offer him. See how this works? Let’s look at the other side, though. It has also been speculated that the Giants offer a better fit for Greinke because of their recent run of World Series championships. Let’s IMOSSBMAOG that and… money. Alrighty then.
I’m kind of making a joke about this, but this is a real thing. Perhaps, though, I’ve mis-angled this piece. It really shouldn’t be so much about the players. They’re going to do what we’d all do in their situation. It should also be about that portion of the media who feed us soft-focused narratives about these free agents. Part of it is that, but part of it is also an attempt to justify all the articles, all the speculation, all the time, energy and money we all put into this every off-season. The truth of this is very simple, but we can’t let it be simple because that would mean we’re all wasting our time. Free agent speculation is fun. I like trying to figure out who will end up where and who will sign who. Sometimes it’s unexpected, but at least as far as the reasons why someone signed somewhere, those are always the same. David Price hated one team’s star player. He wanted to play close to home. He wanted to win. He had no business even considering signing in Boston, except for one reason, and that reason, as it turns out, is the only one that ever really matters.
I completely agree with your premise, but to nit pick most reports have the Giants as the high bidder on Jon Lester last year, so he’s not a great example.
Hard to say ahead of time, but Zack Greinke might not be the best example, either. He’d be near the top of my list of players I’d expect to turn down money for comfort/location.
Didn’t he actually say he’d sign with whomever offered him the most money?
Yep, here it is:
http://sports.yahoo.com/blogs/mlb-big-league-stew/zack-greinke-could-play-worst-team-paid-most-163824712–mlb.html
Ha, I’m clearly wrong. His honesty still confirms my impression that Greinke is not your typical pro athlete.
IMHO Greinke isn’t being completely honest with the quote in the Yahoo piece.
First of all, he did say: “…if the last place team paid me 200 million and the first place team offered me $10…” Essentially, with a touch of hyperbole, he was saying that he’d pass on a first place team if they really gave him a low ball offer relative to a last place team.
But let’s get serious: a pitcher of Greinke’s caliber is not going to get a really low offer from a team that sees itself as a contender. So the difference in offers is going to be a lot closer.
Also: there are last place teams, like the Red Sox, that finished last only because their bets on some players like HanRam (oh yeah, Mr. Hard Work was going to do his best to learn how to play probably the most difficult LF in baseball) and pitchers like Porcello, Miley and Kelly didn’t work out—yet.
And then there are last place teams, or next to last place teams, that have simply been bad organizations. Miami comes to mind. As does Milwaukee.
So if the Dodgers offered Greinke 5/150 and the Marlins offered him 5/165, assuming there is no opt out clause in either deal, do you really believe he’d spurn the Dodgers, Friedman, the laid back atmosphere and great climate of LAD for a team that keeps changing directions every couple of years? And how about Colorado? Would he take an extra 15-20 million over 5 years to pitch in an environment that would wreck his career numbers? I don’t think so.
Price was going to a great organization. Great fans, just as knowledgeable as those of the Cards. The offer was apparently substantially higher.
Most of the time it’s about the money. But not all of the time. Greinke wants to win a championship. What’s the chance of that happening in Miami, Milwaukee or Colorado?
“Essentially, with a touch of hyperbole”
I heard Zack signed with the little hope Diamondbacks who gave him the most money.
whoops
I will never understand why so many athletes, and regular people, are willing to chase the highest paycheck when moving can easily impact their quality of life. If I’m happy with my position I’ll easily turn down an extra 10-15% salary to stay where I am.
Do athletes get as much of a high competing for the highest paycheck as they do competing in their sport?
1) A player spends less than a quarter of the year at their home park. The rest of the time is in AZ/FL, traveling all over the country, and the offseason. The team’s home base is really not that relevant.
2) Players/agents also know that it’s not smart to sign somewhere based on how good the team is or whether you like your teammates/coaches. All of that stuff can change in an instant. And we’re talking about 5, 6, 7 year deals here.
3) I don’t know how much I believe it, but you always hear that for athletes it’s not about the money itself, but about the respect/prestige that comes with the size of the contract. It’s pretty clear that Price’s contract was designed to be bigger than Kershaw’s record $215M and equal Cabrera’s record $31M/year.
You make some really good points and thinking back on my own career a lot of raises I’ve received were about the recognition just as much as the money.
I’ve thought about this too, and one thing here – there’s a huge difference between turning down 10% of say a $50,000 paycheck versus 10% of $50 million.
The quality of life threshold was left far, far behind. But we’re talking about leaving millions on the table. And unlike corporate CEO’s, these contracts are only happening a few times in a player’s life.
Will they waste tons of this money? Yes. Is a lot of it also going to support player’s families and charities? Also yes.
Look, I’m fine leaving $5,000 on the table for improved quality of life. Could I leave $5 million on the table to do so?
The thing is we know the extra $5,000 for someone making $50,000 has a much bigger impact on their happiness/utility than an extra $5M for someone making $50M.
If your next contract is going to provide enough money for 10 generations of your family regardless of where you sign most people would place a higher priority on intangibles.
$5 million is a pretty big impact, especially when your contract is a once in a lifetime chance and you are trying to earn as much as possible because your career will be essentially over afterwards. And i’m willing to bet it’s often a lot more than $5 million in consideration for the very large contracts.
One way to think of it, although I’m not sure how true it is for players, would be to consider the alternative… where would the money go otherwise?
Should I take less money so owner XXX can keep it? Or if the owner woudl spend it elsewhere, should I take less than I’m worth so that player YYY can get more than he’s worth?
I’m not saying it’s right or wrong, but it’s one way to think about it.
For Price, how different were the two offers once taxes were considered? Presuming that narrows the gap in real $ to Price, I can see him preferring to stay in he AL East (where he’s been almost his whole career) to moving to the NL Central.
I see what you’re getting at D, but I’m not sure this argument makes a ton of sense. I would imagine that pitchers are not terribly attached to their division unless they are either attached to a team they have already been on (and Tampa wouldn’t have the $$$ to get Price), or it has a lot of pitcher friendly parks. Neither of those are the case here. In a situation where there’s a familiarity between hitter and pitcher, it’s usually the hitter who benefits. Also, pitchers may mildly prefer the NL since they get to face other pitchers, unless they themselves really hate having to hit.
Sorry, not trying to tear apart your post. I just think that if we sit and think about it, it probably doesn’t matter. Neither does the stuff I said, really. As pointed out above, when it comes to guys who choose to hit free agency, it’s basically all about the money.
Just looking at state tax rates:
– MO is 6%
– MA is 5.15%
However, players are taxed on most of their income based on where their residence is. If Price spends 6 months and 1 day in his home state (TN which is 0% for wages/salaries), then most of his income is taxed on that and not on the state of his team. Only the portion of his income attributable to game days in that state are taxed in that state.
State taxes have little to do with it
Nominal tax rates don’t mean much. That’s only the tax rate on taxable income; his taxable income could vary wildly state-to-state, depending on allowances/deductions/exemptions. Also, some states allow you to deduct income taxes owed to other states. And it’d be impossible for him to spend 6 months/year in Tennessee (a state which does not host MLB games or spring training).
The whole tax thing is so complicated it’s not worth trying to figure out unless you’re David Price’s accountant.
Which star player does he hate?
Price and Ortiz have a feud (dating to 2013, I think) involving beanballs and admired homeruns.
But Ortiz isn’t the most prominent player on the Red Sox. That’d be 6′ 6″ Henry Owens.
It is also uncanny how quickly feuds between players on different teams are resolved as soon as those guys become teammates.
First off, I’m not the same Billy as above.
Ok, I’m not trying to sound naïve here. I would agree that when pursuing a player, money offered is the most important thing. That said, I think we have a biased sample. Those players looking for the biggest paycheck are often those that hit free agency in the first place (think Boras clients). The ones that weigh other factors more heavily are probably the guys who take extensions from their current clubs. We know these guys are sometimes giving up potential money for the security of knowing that they can continue to play in a situation that works for them as long (as the team makes a competitive offer, no one’s taking only half the paycheck they know they can get). I know the article specifically is about free agents, excluding those guys, but I’m just trying to balance the (completely appropriate) cynicism a bit.
A good point!
I would strongly disagree. Players who sign extensions do so because they don’t want to risk their careers being over prior to ever reaching FA. They too are in it for the money (just like you and I would be)…they give up maybe a few million in arbitration raises for the guaranteed income that an extension provides. I highly doubly many of them (if any) sign extensions because of “other factors”.
Agreed.
Along similar lines, I also strongly suspect, thinking about how negotiations work in any field of life, that top free agents effectively eliminate any places that they truly don’t want to play early in the free agency process. It would be natural that any such teams are out well before players are evaluating the top few offers that they’ve received.
If a player, for example, really doesn’t want to play for a particular team, then that team gets their calls returned last by his agent. Even without a player outright saying, “I don’t want to play in [fill in the blank city]”, those teams will get the hint and drop out of negotiations.
An agent can’t realistically keep detailed negotiations going with 10 or 15 teams – there are only so many hours in the day, and the back and forth of a serious negotiation takes time. A realistic maximum number for detailed negotiations is more like 5 teams. Teams are smart enough negotiators that they aren’t just going to throw out a high initial offer and then let an agent shop it around the league for a few weeks. If a team is giving a top of the market, best and final sort of offer, they’re doing so after negotiations have progressed and with an understanding like “we need a yes or no answer by tomorrow.”
Some teams will naturally be out on a player due to financial considerations, but let’s say Price really didn’t want to play for 1 or 2 of the 10-15 teams that seem like they have the financial strength to offer him a big contract. Those teams would almost certainly never make it to the point of offering him a 7 year, $217 million contract. I assume that almost all players who reach free agency are willing to play for a majority of teams, for the right deal. Some players might be willing to play for the high bidder, whoever it is. But, if Price really had strong feelings about not going to Boston, negotiations never would have reached the point of Boston putting a huge contract offer on the table. There’s a natural winnowing process by which top free agents are only talking seriously with teams that are acceptable destinations in their minds, and the high bid comes out of those serious negotiations.
This reminds me of the old adage that teams need good chemistry to win. You never hear about winning teams with bad chemistry, though. And you do hear about losing teams that have good chemistry. Winning breeds chemistry, not the other way around.
Likewise, getting a huger paycheck than you’d get anywhere else is going to make you think the town is great, the team has an incredible history and the owners are 110% committed to winning.
77 and 78 Yankees come to mind. The two stars literally hated each other to the point of fist fights. There was a major racial component to the cliques in the clubhouse and easily half the team loathed the manager.
Chemistry does matter. But talent matters more.
Boston does indeed offer Price the chance to win right away. The early projections I’ve seen have them competing right at the top of the AL east. They have a nice young core of hitters in place – Bogaerts, Betts, Swihart – as well as some nice complimentary arms – Rodriguez comes to mind. To say Price’s decision was completely about money may well be true, but to say he went somewhere without a chance to win is short sighted. Price may have recognized Boston’s most pressing need in order to compete right now was himself.
Just like last year…
I believe the Red Sox have been projected as the best team in the AL in 2011, 2012, 2014, and 2015.
2013 was supposed to be a rebuilding year, and they won the WS.
The projections have missed so bally in the AL East that it might be time to examine what’s going in.
The projections have missed so badly where we’re concerned that we feel the need to remind you that the Titanic was a Steamer, too.
*snivel snivel whine*
“There may be some instances where players take less money. Maybe you can think of one or two. Andrew Miller reportedly turned down some extra dollars from Houston last off-season to sign with the Yankees. Cliff Lee turned down the Yankees though for a higher AAV and fewer years to return to Philadelphia.”
And Nelson Cruz “turned down” 5/$75M from the Mariners December 2013 to get 1/$8M fro mthe Orioles after Spring Training started… 🙂
Cruz turned it down because he thought he’d get more elsewhere – lots of examples of that (Desmond, Stephen Drew, Kendrys Morales I think) and they just prove the point. Worst example was the kid who who held out for more money in 2 straight drafts before completely falling out of baseball – I think that was Matt Bush IIRC
Wrong Matt – it was Matt Harrington
I put “turned down” in quotes as I figure he and/or his agent just said he had a 5/$75M offer to try and drive up his price [when he actually had no offers].
How likely is it that one team felt he was worth 5/$75M and the next highest pegged him at 50% of the AAV and 20% of the years?
Small cost of living argument too. There is a Yankee player who rents out an apartment for 20k dollars a month. He might of purchased since, but that is pretty absurd. In some cities, you could buy a nice house in the burbs for as much as you spend in 1 year renting such a place in NYC.
There are burbs of NYC you know, and some of them are a shorter drive from Yankee stadium than the parts of Manhattan you’ll find 20k/mo apartments.
You can get a daily helicopter ride from upstate to the stadium daily for less than that amount.
Let’s not pretend that free agents are turning down contract offers from the Yankees on a matter of $480k/yr.
Someone hinted at this already, and another may have said it more explicitly. But it’s not all about the money qua money. Money is a cipher for respect and value. If you think you are the top of your field, you want to be treated like it. In baseball, money is this recognition. For this reason, it’s misleading to say it’s all about the money as if it were the money simply as cash and not more broadly understood as cash + respect.
I agree with your post.
A team that is willing to pay you more, by definition, wants you more than a team that cannot or will not match the offer.
Most of the time, it’s about the money. And why shouldn’t it be? these are professional athletes, not hedge-fund guys. They have a limited shelf-life regardless and they can be injured at any time. One of the fascinating things is how few free agents re-sign with the former clubs–either extensions are done withing the contract, or it’s not happening. Kerry Wood was one of the few players to turn down more money (from the Yankees, after he pitched well for them) to return home. It just doesn’t happen all that often.
It’s surely not all about the money. Had the Cards offer been say 7/216 and the Red Sox 7/217 would it have been considered odd if Price didn’t take the higher offer. Major differences in money is usually always going to win but if the amounts are reasonably close I think it’s wrong to assume a player will just go for the higher offer.
I don’t think the author would disagree with you when the amount is 1 M$ spread over 6 years.
LOL, right on cue Greinke signs with the Diamondbacks for history’s highest AAV.
Didn’t Pujols turn down a huge contract from the Marlins b/c they wouldn’t guarantee a no-trade clause?
Wasn’t Choo offered more by the Yankees? Of course, the reason (I recall) he accepted the Rangers offer was the reduced state tax hit would make his contract worth more…
Also. I had forgotten that Andrew Miller could have been on the Astros. How would that have changed the 2015 playoffs?