clock menu more-arrow no yes

Filed under:

Why aren’t these teams spending?

New, 40 comments

Baseball’s middle class seems to be sitting on their hands.

American League Wild Card Game - Minnesota Twins v New York Yankees

This has been the slowest off-season in recent memory, with many top free agents - Eric Hosmer, Mike Moustakas, Lorenzo Cain, J.D. Martinez, Jake Arrieta, Yu Darvish, Greg Holland - still unsigned. According to Ken Rosenthal, as of a week ago, 135 free agents were still unsigned, and since then, only a couple of players have signed. Five teams have yet to sign a single Major League free agent.

There have been many explanations for this unprecedented hold up in the free agent market, and the arguments seem to boil down to this:

The Luxury Tax

The $197 million threshold is much more punitive under the new collective bargaining agreement this year, so typical free-spending teams like the Yankees and Red Sox are much more cost-conscious this year.

The 2018 free agent class

Bryce Harper, Clayton Kershaw, and Manny Machado are just some of the elite free agents hitting the market next year. Teams want to save some flexibility (which also includes staying under the luxury tax number) so they can make a run at one of those players next winter.

Teams realize free agency is a sucker’s bet

There is a new generation of General Managers out there who understand that free agency is just a way to pay millions of dollars for a player’s decline phase. Rather than be stuck with a bad contract, they are passing on the market completely.

Scott Boras

Boras represents several top free agents including Martinez, Hosmer, Moustakas, and Holland. He is holding up the market with ridiculous demands.

Home runs are cheap

The explosion in offense in the biggest home run year in baseball history has caused sluggers to be a less valuable commodity. Players like J.D. Martinez need to recalibrate their asking price to fit the new reality.

Too many teams are tanking

This new breed of GMs share the common philosophy that if you ain’t first, you’re last. Rather than spend money in vain to win 75 games, teams figure that if they’re not truly contenders, they should tear it all down and rebuild, the way the Cubs and Astros did with success in recent years.

There is a lot of validity to those arguments, but it seems those reasons are pointed mostly to teams at the extremes. The luxury tax is only applicable to a few teams - the Dodgers, Yankees, Red Sox, Giants, and maybe the Nationals. Most other teams aren’t anywhere close to a $197 million payroll. Likewise, most teams will have no shot at the elite free agents in 2018, and aside from those elite players, the rest of the free agent class is rather typical.

Long-term free agent contracts may be a sucker’s bet, but short-term deals can still be a value, and yet, many mid-tier free agents aren’t even finding deals. Perhaps Scott Boras is holding up the market, but he has had several of the top free agents as clients before, why would he be holding things up this year? Home runs may be cheap, but Martinez is the only really big slugger on this market, where is the market for pitchers like Darvish, Arrieta, Lance Lynn, or Alex Cobb?

Finally, even if teams are tanking, there are still many teams that should be trying to contend this year. Why aren’t they spending money? Let’s try to identify them. Here is where I would group each team right now in terms of their ability to spend:

Teams up against/over the luxury tax - Dodgers, Giants, Nationals, Red Sox, Yankees

Teams with stingy owners - Athletics, Marlins, Mets, Pirates?, Rays

Rebuilding teams bottoming out - Royals, Tigers, White Sox

Teams rebuilding on the way up - Braves, Padres, Phillies, Reds

Teams that should be spending - Angels, Astros, Blue Jays, Brewers, Cardinals, Cubs, Diamondbacks, Indians, Mariners, Orioles, Rangers, Rockies, Twins

The teams rebuilding on the way up could probably be spending some money, but the teams in the last category should definitely be spending. In fairness, some of those teams have spent. The Rockies committed over $100 million to relievers this winter. The Angels have had one of the most successful off-seasons already, landing Shohei Otani (although at a cheap price), Zack Cozart, and Ian Kinsler. The Phillies surprised everyone landing Carlos Santana.

And sure, some of these teams already had rising commitments from young players - such as in Houston. But some of these teams could be spending a lot more. This chart shows 2017 Opening Day payrolls compared to 2018 projected payrolls, according to analysis at Cot’s Contracts.

2017 MLB Payrolls and 2018 Projected Payrolls

Team 2017 Opening Day 2018 Projection Change
Team 2017 Opening Day 2018 Projection Change
Diamondbacks $93,120,200 $117,395,000 26.07%
Astros $124,343,900 $152,315,000 22.49%
Rays $70,064,700 $79,838,333 13.95%
Brewers $63,061,300 $69,515,000 10.23%
Nationals $164,335,444 $176,022,856 7.11%
Giants $180,822,611 $192,172,778 6.28%
Indians $124,116,166 $130,269,665 4.96%
Rockies $127,828,571 $131,737,500 3.06%
Red Sox $197,041,179 $202,886,429 2.97%
Mariners $154,318,843 $157,007,143 1.74%
Reds $95,375,786 $96,499,286 1.18%
Padres $69,624,400 $70,333,333 1.02%
Angels $166,375,833 $166,349,999 -0.02%
Cardinals $148,152,933 $144,175,000 -2.69%
Twins $108,102,500 $104,575,000 -3.26%
Braves $122,603,054 $116,409,476 -5.05%
Cubs $172,199,881 $156,989,881 -8.83%
Blue Jays $163,381,937 $145,776,071 -10.78%
Mets $154,437,460 $135,820,000 -12.06%
Pirates $95,807,004 $83,750,000 -12.58%
Yankees $196,389,700 $161,820,357 -17.60%
Marlins $115,406,101 $93,747,143 -18.77%
Rangers $165,348,063 $129,824,166 -21.48%
Royals $143,005,817 $111,704,167 -21.89%
Dodgers $241,149,167 $185,415,713 -23.11%
Orioles $164,326,172 $121,179,615 -26.26%
White Sox $97,823,271 $69,525,000 -28.93%
Athletics $81,738,333 $55,593,333 -31.99%
Phillies $100,041,000 $63,708,333 -36.32%
Tigers $199,750,600 $122,495,000 -38.68%
$4,065,522,583 $3,779,419,920 -7.04%

Last year, just over $4 billion was committed to player payroll on Opening Day. Assuming the historical trend of 5% salary inflation in baseball, we would expect around $4.27 billion this year. Right now, players are almost $500 million short.

Many of the teams cutting back make some sense. The Tigers are rebuilding. The Dodgers want to get under the luxury tax threshold. But what are the Orioles doing? Shouldn’t the Rangers try to capitalize on this market? When are the Braves going to start spending money in their new ballpark? Shouldn’t the Twins be building around their young core? If the Royals could support a $145 million payroll, why can’t they?

Even among the teams that are spending more, some could be spending a lot more. Aren’t the Brewers in a perfect position to catapult into contention? Aren’t they in the same position the Royals were in 2013 when they made the gamble on James Shields? Shouldn’t the Rockies be putting their team over the hump? Will Indians forgive ownership if the team has yet another disappointing October?

Maybe the dam is about to break. Maybe this off-season has all been one long game of “chicken” and the owners will blink. Maybe it is collusion. Maybe all GMs all just happened to discover free agency is a poor investment at the same time. Maybe it is just a crummy class of free agents.

All I know is, this off-season has been boring. And weird. I can’t figure out why some teams are sitting on their hands when they are on the edge of, or smack dab in the middle of contention. Royals fans know that the thrill of 2014 and 2015 is something they would never trade away. If I were a fan of a contending team seemingly giving less than their full effort in improving the team, I would be incredibly frustrated.