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Long, Cold Winter: MLB Free Agency Is Still Disturbingly Slow

For the second straight offseason, signings are coming at a glacial pace. If Bryce Harper and Manny Machado can’t thaw the market, it’s fair to wonder whether anyone can.

Elias Stein/Getty Images

Two years ago on this date, the biggest game remaining on the MLB free-agent market was Mark Trumbo, who led the majors in homers but was worth about two wins above replacement in 2016. Trumbo re-signed with the Orioles on January 19 for $37.5 million over three years, which cleared the deck of players who could command high-dollar deals. No other free agent who signed for even half of Baltimore’s total commitment to Trumbo lingered later than December 23.

It was slightly unusual for baseball’s big business to be completed by that point, but not nearly as unusual as the slowdown the sport has experienced since. The six biggest contracts of the 2012-13 offseason were all signed before Christmas. So were the six biggest of 2013-14, four of the five biggest of 2014-15, the three biggest of 2015-16 and, with apologies to Trumbo, the 10 biggest of 2016-17. Then came the winter of 2017-18, when the free-agent market entered a partial shutdown that hasn’t really relented.

Last year, the five biggest free agents, and eight of the top nine, signed after Christmas, with J.D. Martinez and Yu Darvish frozen out until mid-February, Jake Arrieta and Alex Cobb on the market until mid-March and, for the first time since 1995, a group of unemployed players forced to attend a spring training camp operated by the Players Association. This winter’s two biggest talents, Manny Machado and Bryce Harper, are still at large, in addition to Dallas Keuchel, Craig Kimbrel, Yasmani Grandal, and A.J. Pollock, who placed fourth, fifth, sixth, and eighth on MLB Trade Rumors’ annual free-agent rankings. In the absence of actual signings, speculation about why the market is so stagnant has come to define the discussion of baseball’s lukewarm stove as much as the few moves being made.

The chart below, based on data from Spotrac, shows the number of free-agent signings and the total dollars committed to free agents through January 7 of each offseason starting with 2012-13.

Relative to a year ago, activity has actually rebounded: Both the number of free-agent signings and the amount of money committed to them are roughly 40 percent higher than they were through the same point last winter. But they’re still lower than in any of the five previous years. And despite the best efforts of Mariners GM Jerry Dipoto and the National League’s Dipoto-lite, Mets GM Brodie Van Wagenen, there hasn’t been an uptick in trade activity to keep us entertained.

Trades Through January 7

Period Trades
Period Trades
2012-13 32
2013-14 30
2014-15 54
2015-16 40
2016-17 29
2017-18 31
2018-19 34

Last year we wondered whether the glacial market might be a small-sample blip. Maybe teams were waiting to see where Shohei Ohtani signed or Giancarlo Stanton was traded, or maybe they were sitting out a weak market in preparation for the loaded 2018-19 free-agent class that didn’t quite come to be. But between 2017’s slight downturn, 2018’s glacial pace, and 2019’s continuation of the trend, the sample is no longer so small. We could keep playing the alternative-explanation game—maybe Machado and Harper are holding up the market; maybe teams are jockeying for J.T. Realmuto; maybe they have their hearts set on someone in one of those upcoming classes—but it’s clear that if teams haven’t stopped spending, they’ve at least postponed it until later in the winter.

Teams are notorious for waiting until the last minute to make in-season moves—hence the flurries of activity preceding the non-waiver and waiver trade deadlines—but that procrastination comes with clear benefits. The longer they wait, the more they know about the playoff picture, the state of their rosters, and the performance of the players they might give up or acquire. The advantage of waiting all winter to make major moves isn’t as obvious, given that major league games aren’t going on. But there’s still some incentive for teams to drag their feet.

In the past, players who’ve signed late in the winter have tended to make less money than forecasted at the start of the offseason. That makes sense: If bigger offers were out there, they might have signed sooner. But there’s also some evidence that players who sign late in the winter produce more WAR for the money, suggesting that teams tend to win when they play chicken with free agents closer to Opening Day. For teams, the season is certain to start when the schedule says. For players, it won’t start unless they sign somewhere. Free agents have more to lose by sticking to their demands than teams do by not acquiescing to them, so when the time pressure mounts, players settle.

That’s truer today than it once was. To hear teams tell it, their hands are tied by the luxury tax, which strains credibility given the relatively small penalties paid by teams that don’t repeatedly surpass the threshold by a massive margin. Although the difficulty of accessing teams’ financial information makes it hard to be conclusive—and, in turn, focuses fans’ envy and ire on the millionaires whose salaries they know rather than the billionaires whose books are closed—it seems much more likely that the reason teams are in no hurry to make moves is that they’re rolling in revenue, not that they’re struggling to make ends meet.

MLB reportedly generated a record $10.3 billion in gross revenue in 2018, and while that figure barely budged from the previous year, it also omits the proceeds of the $2.6 billion sale of streaming spinoff BAMTech to Disney, which paid out approximately $50 million per team in 2018. Put aside the rapid appreciation of franchise values: Between BAMTech, the continuing boon of big broadcast deals (both local and national), and the revenue-sharing system, most teams are financially secure before the games begin. That leaves them with less motivation to pony up for free agents than they had when profits were more tightly tied to team success and ticket sales. In lieu of guaranteed dollars, agents are resorting to tacking on opt-outs and pursuing increasingly convoluted contract structures to pry extra value out of tight-fisted teams.

This offseason’s slow start prompted Red Sox president of baseball operations Dave Dombrowski to propose a deadline for winter dealing—not so that players could make more money, but so that baseball-ops executives could take more time off. That would lead to less protracted posturing and fewer months-long, on-again, off-again courtships, but it wouldn’t address the dilemma of teams’ bottom lines being divorced from their on-field results.

Nor would it ameliorate the other big problem for players: a compensation structure that’s set up to reward veterans at a time when front offices are too savvy to expect aging players to keep up their peak production, and improvements in player development have made it feasible for teams to groom homegrown stars, assemble starters out of bargain-basement imports, and derive more production from the cheap, pre-arbitration ranks. Those conditions caused the average MLB salary to sink in 2018 for the first time since 2004, and only the second time in the past 50 years in a season that didn’t coincide with either a strike or (as far as we know) collusion.

The lack of resolution to the sagas of this winter’s 26-year-old superstars seems like another worrisome sign. In terms of projected performance in their post-free-agency years, Machado and Harper are two of the top 15 free agents of the past quarter-century; if they can’t thaw the cold market, no one can. The problem for both players is that the history of decade-long deals has made teams wary of long-term commitment; after dispensing an average of 311 contract years per offseason to free agents from the winter of 2012-13 through the winter of 2015-16, they committed only 218 and 266, respectively, in the past two signing periods. At the same time, the luxury tax makes them less willing to shell out annual salaries high enough to convince stars to accept fewer guaranteed years.

Still, considering their age and accomplishments, free agents don’t come much more appealing than these two. There’s still time for both players to get paid: Harper is reportedly sitting on a sizable offer, and Machado is, if anything, the more appealing player, with fewer performance fluctuations and a stronger platform year. Add another $600 million or more to this winter’s total free-agent earnings, and the sport will suddenly seem healthier. Overall free-agent spending hasn’t declined precipitously, even as it’s shifted significantly toward spring training. But each of the past two winters has seen fewer total dollars devoted to free agents than each of the three before that, even as revenues have risen.

This economic quagmire won’t fix itself, but for now, the sport is stuck in a holding pattern. The Players Association’s marching orders are simple, albeit much easier expressed than accomplished: Get players paid earlier in their careers instead of postponing their paydays until after several years of service. But the current collective bargaining agreement doesn’t expire until December 2021, which likely means at least two more hand-wringing, slow-burning baseball offseasons before the one that will decide whether this is a short-term problem or an intractable, existential crisis that could cause a work stoppage.

In A Prayer for Owen Meany, John Irving described baseball as “a game with increasingly heightened anticipation of increasingly limited action.” That summation is more and more fitting on the field, where the time between pitches and between batted balls lengthens by the year. But compared with past years, it’s also becoming an accurate encapsulation of the offseason. In the long run, that may be the bigger threat.

Thanks to Dan Hirsch of Baseball Reference for research assistance.