Verducci: Machado contract proves ‘free agency isn’t broken’
The signing of superstar free agent Manny Machado, by the Padres to a 10-year, $300 million deal, immediately brought out the hot takes. Sports Illustrated’s Tom Verducci had perhaps the hottest of the takes, declaring that “free agency isn’t broken after all” because Machado got paid. This is Verducci’s opening paragraph:
Verducci adds that Harper will also likely sign for a similar amount of money. Free agency is fine, everyone!
Before getting into it, can we just acknowledge that the comp of Machado as “Ryan Zimmerman with a better glove” is one of the most ludicrous things ever written by a baseball writer? Zimmerman was a terrific player -- and still is to an extent -- but had problems staying healthy. Additionally, across his 14-year career, he has had just two seasons above 5.0 WAR, according to Baseball Reference: 2009 (7.3) and 2010 (6.2). Machado has had four in his seven-year career: 2015 (7.1), 2016 (6.9), 2013 (6.7), and 2018 (5.7).
Before the last few years, Machado and Harper would’ve been signed by the end of December at the latest and there would be nothing but scraps on the free agent market when spring training opens. In 2019, not only has spring training started, but the likes of Craig Kimbrel and Dallas Keuchel are still teamless. Exhibition games begin in just a few days. I did a meager illustration of the slower progression of the free agent market in December 2017. It would only look worse having added the last two years’ worth of data.
Machado and Harper were always going to get paid, even if that meant waiting until late February or March to sign the dotted line. Machado signing a lucrative contract is not proof that “free agency isn’t broken.”
According to Maury Brown of Forbes, players last year received their second-smallest percentage of revenues dating back to 2006. They got 54.8 percent last year after hovering around 57 percent for most of the last five years. It might not seem like a big difference, but it is for a business that took in over $10 billion in revenues last year. That’s because front offices across the sport pretty much all adopted the same way of thinking, thanks to analytics, at roughly the same time. One of the more analytically-oriented beliefs is that paying free agents, who tend to be close to 30 years old or older and thus past their prime, is a bad investment. So teams just stopped signing free agents as quickly and as much.
The problem is that players are taken advantage of for years prior to becoming eligible for free agency, including making poverty wages in the minors. Free agency was always the carrot at the end of the stick where players were finally paid for their production. Consider that Mike Trout was paid the league minimum salary in 2012, putting up 10.5 WAR, per Baseball Reference. The next year, he put up 9.0 WAR for slightly more than the league minimum. The Angels bumped him up to $1 million in 2014 for 7.6 WAR. The Angels decided to sign Trout to a contract extension in his final year before becoming eligible for arbitration. He had a 9.4-WAR season and was paid about $6 million. Add that all up and the Angels got over 36 WAR for roughly $8 million. Trout is an extreme example, but he illustrates the problem well.
Keuchel has been one of the game’s better starters over the last five years, accuring 18.4 WAR. He finished with a sub-3.00 ERA in three of those five seasons, won a Gold Glove Award in all five years, and won the AL Cy Young Award in 2015. But he’s currently teamless. What club couldn’t use a 31-year-old left-handed pitcher who, at minimum, would stabilize a starting rotation and act as a mentor to younger players? What club couldn’t use Craig Kimbrel, a seven-time All-Star with a career 1.91 ERA? Where are Keuchel and Kimbrel’s carrots?
If we align this offseason’s free agents on tiers, we would put Machado and Harper at the top, followed by Patrick Corbin, Keuchel, Kimbrel, and A.J. Pollock. We have another tier that includes players like Nathan Eovaldi, J.A. Happ, Yasmani Grandal, and Andrew McCutchen. Let’s talk about the tier after that, which would include players like Mike Moustakas. Moustakas was a bit slow to catch up to major league speed, posting an aggregate .668 OPS in his first four seasons. He broke out in 2015, hitting 22 home runs with an .817 OPS before injuries limited him in 2016. In 2017, he set career-highs in homers and RBI with 38 and 85, respectively. He followed up with a quality 2018 campaign, swatting 28 home runs with 95 RBI.
Moustakas hit free agency after his career year in 2017. He didn’t sign until March 2018, finally settling for a one-year, $6.5 million contract with a $15 million mutual option for the 2019 season. He had qualifying offer compensation attached to him, which limited his appeal on the free agent market. Moustakas followed up with another quality campaign, which included being traded to the Brewers. The Brewers declined that mutual option in late October, waited three and a half months, then signed him to a one-year, $10 million deal with a mutual option for the 2020 season (as yet unknown value). A decade ago, a player of Moustakas’s caliber would’ve easily gotten a three-year deal. These days, those players are getting meager one-year deals.
How about Derek Dietrich settling for a minor league deal with the Reds recently? Dietrich, 29, has a career adjusted OPS of 109 (100 is league average) with significant experience at second base, left field, and third base while also having spent time at first base. José Iglesias is still unsigned and will likely also have to settle for a minor league deal. He has an adjusted OPS of 84, but is one of the better defensive shortstops around. David Eckstein, for the sake of comparison, had a career adjusted OPS of 87, was a worse fielder, and made nearly $20 million in his career, which spanned 2001-10. Iglesias, to date, has also made about $20 million in his career, just about a decade later and he’s unlikely to earn much more on top of that.
Expectations for free agents have shifted downward in recent years. Those expectations are supposed to be constantly moving upwards. A similarly-skilled player should generally be earning more money than his predecessor. Despite being a better player, Machado couldn’t surpass the 13-year, $325 million contract Giancarlo Stanton signed with the Marlins in November 2014. The Keuchels and Kimbrels of the baseball world are waiting months longer to sign than they would have previously for fewer years and fewer overall dollars. The Dietriches and Iglesiases are settling for minor league deals when they previously would have been able to leverage guaranteed major league contracts. The carrots at the end of those sticks are smaller and further away. In some cases, the carrots are nonexistent. Team owners are taking advantage of baseball’s effective monopoly and systems of rules that artificially limit a player’s earning potential (such as the amateur draft and pre-arbitraton contract renewal). That’s why free agency is broken and it’s why we have a labor crisis on our hands, Machado and Harper be damned.