Which Types of Teams are Signing Free Agents? An Update

Last month, I set out to investigate whether the 2019-2020 offseason was a sea change in terms of teams outside the playoffs signing free agents. I can save you the click on that link — it wasn’t. At the time, things were leaning toward the less-egalitarian end of the spectrum; weighted by WAR, the average free agent was joining a team with a .545 record in 2019.

But that was a month ago, and many more signings have happened since then. All kinds of bad or in-the-middle teams have been getting into the act; the Blue Jays signed Hyun-Jin Ryu, the White Sox continued their bonanza, and the Diamondbacks signed Madison Bumgarner. There were smaller moves as well — Tanner Roark also joined the Blue Jays; Julio Teheran is an Angel now. Even the Tigers signed a few veterans.

Of course, playoff teams from 2019 added free agents as well. The Nationals fortified their bullpen with Will Harris and Daniel Hudson (plus bonus Starlin Castro action), and the Twins added Rich Hill and Homer Bailey. The point is, it’s not obvious whether the haves or have nots have done better since then.

Let’s look at a quick update first. First, there’s the rough cut; the total wins acquired in the offseason so far. Playoff teams are still acquiring more than half of the WAR available in free agency:

Please excuse the cut to only 10 years of data; you can look to the old article if you’re desperate to know how aggressive playoff teams were in free agency in 2006.

I’ll quickly run through all the various permutations from the last article for an update before we get to the big reveal. How about good free agents, players who accumulated 2 or more WAR in 2019?

Even with all the players heading to teams on the outside of the playoffs since the last update, this offseason still looks top-heavy. And it still does if we look at the weighted winning percentage. As a refresher, this is the winning percentage of each team signing a free agent, weighted by how many WAR’s worth of free agents they’ve signed. The higher the number, the better the teams signing free agents:

Here’s the thing: if this was all I had to show you, I probably wouldn’t have written an update. Things have happened, sure, and they’ve moved the reality of the offseason towards the initial intuition that non-playoff teams are getting involved in the free agent market, but the overall picture still isn’t new. Last year looks, charitably, like more of the same — and you can even argue that the league is getting more stratified.

So given that I am writing this article, you can assume I did some new analysis. And I did! In the comments section of the last article, someone suggested an alternate mode of analysis that I’d considered but discarded. It’s time to un-discard it.

Free agency is a two-way street. It’s not precisely balanced, in that players can reach free agency and then retire. They can also sign from overseas, and there are more instances than you’d think of the same player signing multiple times within a year or even an offseason. But for the most part, it’s a closed system. When one team adds a player, some other team lost that same player. And in fact, we can just ignore all the reasons that it’s not a closed system by only looking at players who played in the majors in the prior year and then signed contracts.

So rather than merely look at additions on a team-by-team level, I decided to look at the net change in talent coming from free agency. This is intuitive, but let’s run through an example quickly just to make sure it tracks. Imagine that there were only two free agents in all of baseball: Anthony Rendon and Stephen Strasburg. The Nationals lost 12.7 WAR between the two. When Strasburg signed a new contract with them, they got 5.7 WAR back, leaving them 7 WAR down. The Angels added 7 WAR in Rendon, with no losses.

You can see how this analysis results in different takeaways. If we look only at additions, the Angels and Nationals are on nearly even playing fields. They both added superstars, and the Angels have only a narrow edge in the wattage of said star. On net, however, the story is quite different. The Nationals got a lot worse than they were last year, and the Angels got a lot better.

Want an extreme example? In the offseason after the 2007 campaign, the New York Yankees signed a lot of free agents. In fact, they added a whopping 19 WAR worth of players. That’s actually quite a lot like this year’s Nationals:

But like these Nationals, those Yankees didn’t do much net improving. Alex Rodriguez, Andy Pettitte, Mariano Rivera, Jorge Posada, and Roger Clemens all reached free agency. The Yankees retained everyone but Clemens, who retired. But they still net lost wins, because other players left too.

One benefit of this net method is that it handles situations like those Yankees and this year’s Nationals. Treading water by replacing departing players with new ones or signing new contracts is just that — treading water. If we want to see what teams are actually doing to change their fortunes, looking at net change is an excellent way to do it.

This is where a more writerly writer would do some foreshadowing. But Carson works for the Blue Jays now, so instead let’s get straight to the point. Here’s a table that shows 2019 really is different:

Yes! This is the evidence we were looking for all along. Teams that made the playoffs last year are signing a lot of free agents, but it’s not enough to stop the talent exodus.

The five teams who have improved the most this offseason is a fun list:

They were all on the outside looking in, and even if the Rangers and Blue Jays aren’t quite ready for showtime yet, all five markedly improved in free agency. In contrast, four of the five teams losing the most talent made the playoffs this year:

Generally speaking, playoff teams lose net WAR in free agency. It’s a bit of a recursive situation; playoff teams have more WAR, and so they have more WAR to lose in free agency. But this year has been especially tough on playoff teams in terms of talent bleed.

There are still more free agents left to sign, but two of the top three free agents left — Josh Donaldson and Marcell Ozuna — were on playoff teams in 2019. If they sign with playoff teams, the analysis won’t change. If they sign with young, hungry contenders, the balance could tip even further.

All December, I was frustrated that I hadn’t found any evidence of middling teams adding talent. It turned out that I simply hadn’t looked in the right place yet. Teams on the outside looking in really have gotten better this offseason. It just took a little digging to find it.