These Days, The Waiting Game Doesn’t Pay Off

We’re pleased to welcome another new writer to the fold – Alex Remington. He’ll be holding down the fort every Thursday around here. Welcome, Alex.

Greetings to all! I’m Alex Remington. You may know me from Big League Stew at Yahoo! Sports, or the Atlanta Braves blog Chop-n-Change. (I also blog on pop culture at Huffington Post and my own blog, Remingtonstein.) I’m excited to be a member of the FanGraphs community, with so many of my favorite writers. I’m looking forward to hearing from you! I’m interested in looking at some of the narratives of the season. Today I’d like to look at one of the most obvious: money.

For the second straight offseason, the uncertain national economy has noticeably affected the baseball economy. It’s a different world out there. So far in 2009, there have been just six contracts worth at least $20 million in 2009; in 2006, there were 20. What’s more, over the past two years, many of the biggest contracts have been given out early, rather than late. In 2008 and 2009, there were 20 contracts worth at least $20 million. 11 of them were handed out before New Year’s (ten of those were in December, around the Winter Meetings), and another six were handed out by mid-January. After that, almost no one signed for even semi-big money.

Of course, the free agent market is fairly segmented. Eight of the 20 biggest contracts — a full 40% — were handed out by the Mets, Yankees and Cubs, the three highest-payroll teams in baseball last year. Four more were given out by the Dodgers and Braves, both in the top 12. The other 25 franchises were more parsimonious with their funds. So it really is a buyer’s market: a free agent has to know that there are only a handful of teams from whom he’ll be able to get a big-money contract. If those teams take a pass, then a free agent is basically left chasing table scraps, along with every other free agent out there.

Several free agents this offseason have notably erred in their negotiations. Adam LaRoche reportedly spurned $17.5 million from the Giants, and wound up signing for $6 million with the D-Backs. He explained his reasoning: “I just had to weigh it. Was it worth going there for a couple of years or just riding it out and seeing what kind of options were available? They kind of started dwindling fast.” No kidding. These days, it seems that “riding it out” is a poor financial decision, as Johnny Damon is also learning. Damon rejected two years and $14 million from the Yankees, and is now mulling an offer in the $5 million range from the Atlanta Braves. And Jarrod Washburn, who turned down a $5 million dollar offer from the Twins, has received so little interest from elsewhere that he’s considering retirement.

Of course, the waiting game isn’t always disastrous. Manny Ramirez got $45 million last March, after all. But he’s Manny Ramirez, and most free agents are not. The longer they wait, the longer other teams are able to think of other, cheaper ways to fill their team’s holes than the free agent market. If there’s any chance of getting the Yankees or Mets interested, then waiting may be a good strategy. If not, then most free agents should really just sign on the dotted line.