This Year’s Free Agent Class Was Incredibly Good

We have seen a lot of money thrown around this offseason, particularly on the pitching side. Players at the top end like David Price and Zack Greinke have received $200 million contracts while mid-tier pitcher like Mike Leake, Jeff Samardzija, Wei-Yin Chen, and even Ian Kennedy have received contracts approaching nine figures. On the hitting side, the market moved considerably slower, but Jason Heyward got nearly $200 million, including close to $80 million over the first three seasons before a pair opt-outs become available to him. Justin Upton still got more than $130 million with a favorable opt-out clause, and it appears that Yoenis Cespedes will do just fine as well after some talk that both he and Upton might have to take one-year deals. Describing this year’s class is one thing, but compared to the classes over the last decade, it might be the best we have seen.

A brief look at this year’s class reveals a collection of high-end players who produced strong 2015 seasons. Consider the players in the table below, sorted by projected contract value per FanGraphs Crowdsourcing and featuring both 2015 performance and the total dollar amount of the contract signed.

Assuming Cespedes signs somewhere in the $100 million range, the average will still be right around $140 million per contract, an increase of more than 50% from the top ten free agents last year. Thanks to the efforts of Carson Cistulli, we can take a look at the free agent classes in each of the past five years, and compare the top ten free agents according to the FanGraphs crowd.

Over the last decade, age had been an increasingly important factor when it comes to handing out free agent contracts as aging curves have shifted following the start of PED testing in Major League Baseball. Given that it takes a full six years of service time to reach free agency, free agents are rarely young, but as the chart above shows, a majority of the this year’s free agents have yet to play their age-30 season. The graph below compares this year’s age to those of the past five offseasons.

This year’s crop of free agents is nearly two years younger than last season’s — and younger than any of the groups of the past five years. Given that they are younger, it might be reasonable to conclude that they performed better over the past year. That assumption would be correct, as the graph below shows.

The 2011 class included Albert Pujols, Prince Fielder, and in-his-prime CC Sabathia, but it was still no match for high-end quality and depth of the 2015 class. Last year’s class, headlined by Max Scherzer and Jon Lester, was a solid one, but lacked elite-level hitting with Pablo Sandoval, Hanley Ramirez, and Nelson Cruz headlining the position-player side. While for the second season in a row, the top two spots in terms of dollars went to pitching, there are already three position players in Jason Heyward, Chris Davis and Justin Upton signing $100 million contracts with Yoenis Cespedes not likely far behind.

Using last season’s WAR is not a perfect proxy for future talent, but even if we look at projections, this year’s group is solid. The table below takes the Steamer projections for each free agent signed this season. Keep in mind, these projections represent more of a midpoint of expected production.

The data here might provide some insight into why Cespedes is the last major domino to fall in the free agent market, but it also illustrates that this free agent class is expected to continue to perform at a high level. While moving from a 4.7 WAR average this past season to a 3.5 projection for 2016 might seem like a major decline, given the outstanding performance of these players last year, and a projections tendency to move toward the middle, a 3.5 average is very solid. Out of all the player projections on Steamer, only 30 position players and 25 pitchers exceed 3.5, and that is the average of these players listed here. While it is an impressive group, taking the average projection and age of that group does not yield much in the way of value, although it does get relatively close.

In terms of dollars, which should combine somewhat the age of this class with its current performance, it should come as no surprise that this season’s class towers over others. Even when inflation is included at 5% per year, no other recent class comes close.

The top ten players above have been defined as such by the estimates provided from the FanGraphs crowdsourcing. Naturally, that doesn’t always line up directly with the players who were actually paid the most. As we’ve seen this offseason, Alex Gordon received less money than what we might have expected and players like Mike Leake and Wei-Yin Chen signed larger contracts.

Strictly using contract amounts, and going back ten years, we can see where this year’s free agent binge rates. In the graph below there are four lines. Two of the lines represent the average value of the contracts signed by the top 10 free agents: one with the total dollar value, and the second with that dollar value converted to this year’s money by using 5% inflation per year. The other two lines are similar, except they represent the top 20 free agent contracts signed in that particular offseason.

Taking inflation into account, MLB teams have not spent more than they did in 2006 in free agency on either the top 10 or the top 20 free agents in the last decade until this season. Assuming Cespedes signs for around $100 million, the average contract of the top 20 free agents this season will be nearly identical to the average of top 10 contracts signed from 2006 through last year.

Over the past decade, revenue has moved upward, but the player’s share of that revenue has moved down. While free agent salaries generally appear to moving forward and going higher, the big spending has actually slipped over the past decade. This year, the players appear to be benefiting from the increased revenues from local and national television, as well as the emergence of contenders like the Chicago Cubs and Kansas City Royals, who themselves have benefited greatly from their recent success. Increased revenues coupled with multiple great players to sign appears to have led to a big increase. Whether those gains will be continued next offseason under a new Collective Bargaining Agreement and a considerably weaker free agent class remains to be seen.