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The one-year contract is dead this year

The value of one-year deals is down, and the number of one-year deals is way down.

Kansas City Royals v Toronto Blue Jays Photo by Tom Szczerbowski/Getty Images

Tensions have been rising in baseball after some agents and the players’ union voiced frustration with the glacial pace of this off-season. MLB fired back, insisting that there could be no collusion because the top-tier of free agents were sitting on “substantial offers, some in nine figures.”

While people have focused on the fact that top free agents like J.D. Martinez, Eric Hosmer, and Yu Darvish remain unsigned, just 26 of the top 50 free agents, according to Fangraphs’ list before the off-season, have found homes thus far. Even if players like Eric Hosmer and Yu Darvish are making unreasonable contracts demands, that does not explain why players like several other quality Major League players are still without a home. They’re not all Scott Boras clients.

Using the Transaction Tracker at MLB Trade Rumors, I have built up a database of free agent signings over the last four off-seasons (not counting regular season signings), looking only at those that signed Major League deals worth $1 million or more. In the last three seasons, there have been an average of 57 free agents signed to one-year deals per off-season. This year there have been just 20.

Number of contracts, by year length

Yrs 2014 2015 2016 2017
Yrs 2014 2015 2016 2017
1 49 60 63 20
2 14 12 15 22
3 5 10 8 8
4 11 4 5 0
5+ 5 12 4 1
84 98 95 51

The players that might have received one-year deals in the past - platoon players, bench bats, backup catchers, fifth-starters, utility infielders - aren’t getting those deals anymore. And the one-year contracts that have been received are lower than they have been in the last few seasons. The average one-year deal this year has been for $3.3 million, down from $4.5 million last year.

Value of contracts, by deal length

Yrs 2014 2015 2016 2017
Yrs 2014 2015 2016 2017
1 $3.7 $3.6 $4.5 $3.3
2 $15.1 $15.7 $14.1 $12.5
3 $30.5 $33.5 $33.0 $38.6
4 $51.5 $42.8 $63.7 $0.0
5+ $122.1 $123.9 $79.6 $80.0

The number of two-year contracts are at an four-year high, although 12 of those 22 contracts are for relief pitchers, which explains why the value of those deals has gone down as well. In other words, if you are a position player or starting pitcher who is worth only a short-term deal, you have been squeezed out of this market so far. Jason Vargas, Logan Morrison, Lucas Duda, Jarrod Dyson, Neil Walker, Carlos Gomez, Jonathan Lucroy all would have received 1-2 year deals - or perhaps even more - in past off-seasons. Yet they remain unsigned.

One theory for why so many lower-tier free agents remain unsigned is that they have to wait for the top players to set the market. But is that how the market plays out? Did those big free agents set the market or were they just signed earlier in the off-season when teams were making moves? Perhaps players looking for 3-5 year deals like Alex Cobb or Lance Lynn have to wait until Yu Darvish goes off the market. But it seems less likely that the market for J.D. Martinez is affecting, say, Melky Cabrera. And shouldn’t we be at the point where teams are willing to pass on the outrageous demands of the top shelf players and reach down to grab a more affordable free agent?

The more punitive luxury tax threshold explains why the market has been tight for some free agents, but it only affects five clubs - the Dodgers, Yankees, Red Sox, Giants, and Nationals. And sure, about ten teams are “tanking” or rebuilding, including clubs like the Tigers and Royals. But that still leaves half the league to pursue solid low-tier free agents on short-term deals.

Teams on the rise like the Diamondbacks, Twins, and Angels, teams that should be supplementing their rebuild like the Phillies and Braves, and contenders not close to the luxury tax threshold like the Cubs and Cardinals, would typically be plugging holes with low-tier free agents. A few weeks ago, I calculated that 18 of 30 clubs are projected to decrease payroll from their Opening Day payroll in 2017. Why are teams sitting on their hands?

Perhaps we are about to see a flurry of activity as spring training draws near. But the explanations given for the slow market should be unsatisfactory to unemployed veteran free agents looking for short-term deals.