So here we are again. Another incredibly slow baseball off-season. The excuse of last year doesn’t hold up, anymore. What was that excuse? That this off-season would have guys like Manny Machado and Bryce Harper and everyone wanted to save their money for those two guys. Only, oddly enough, neither of those guys has signed and there aren’t any rumors indicating they’re particularly close to signing. Funny thing that.
The latest rumor we actually have for either player is that the White Sox offered Manny Machado $175M over seven years. Those numbers are stunningly similar to Eric Hosmer’s deal with the San Diego Padres. Hosmer, of course, got paid $144 over 8 years. Hosmer got an opt-out in his deal after the fifth season. Which means he has a $100M contract for 5 years with an insurance policy of $44M for 3 years after that if he stinks (Spoiler alert: He has so far). The opportunity to leave his deal at age 32 if he was producing highly and thought he could earn more carries with it some monetary value. The value of an opt-out varies from contract to contract but according to MLB Trade Rumors most opt-outs are worth somewhere around $20M. You add that to Hosmer and he’s only getting $11M less than Machado on a contract that lasts a year longer.
So by that math, yeah, Machado is getting more money and a better Annual Average Value but unless he’s getting his own opt-out he’s getting greatly short-changed compared to Hosmer. By far Hosmer’s best season was in 2017 when he was worth 4.1 fWAR according to FanGraphs. Machado, on the other hand, plays a more difficult position - whether that’s shortstop or third base, is two years younger, and has never been worth less than 2.6 fWAR over a full season. More often than not he’s been worth more than 6 fWAR. If Hosmer was somehow worth the money he was paid than Machado should be paid considerably more. It doesn’t seem like a good thing when values and profits are skyrocketing around the league but the player salaries are going the other direction.
Is it really not collusion, though?
We went over the reasons why it looked like collusion last year and most of you fell on the side of it not being collusion but just front offices using analytics more effectively than ever before. This year, as reported by Ken Rosenthal($), Jeff Passan, and Craig Calcaterra - three names you can usually trust to be pretty accurate in the world of baseball - all 30 teams have decided to go file-and-trial with their arbitration-eligible players, this year. If you are not familiar with what that means, I recommend reading Calcaterra’s article, he explains it pretty succinctly. But all you really need to know is that because of the way it’s structured the process intrinsically favors teams over players.
2018 already saw more arbitration cases go to trial than any year since 1990. Maybe teams all pretty much simultaneously realized that going to trial favored them more than players or maybe all three of those knowledgeable, connected baseball writers will end up being wrong and one or more of the players who didn’t have deals at the filing deadline will end up signing before they go to trial. I suppose it’s worth noting that not as many players will have hearing this year as last year. But maybe that’s because they knew the truth of the matter and felt compelled to get their deals done before the filing deadline.
Maybe it’s collusion. Maybe it isn’t. It doesn’t take a genius to figure this stuff out and it’s possible that the owners and front offices all just finally reached the same conclusions at the same time in regards to player value, the best way to maximize immediate profits, or both.
It’s still bad for baseball
Kyler Murray created an interesting situation in baseball, recently. He was originally drafted by the Oakland Athletics and signed a $4.66M deal with them. However, after a Heisman-trophy winning campaign with the Oklahoma Sooners he decided to declare for the NFL draft rather than fully commit to pursuing a career in baseball. Baseball was apparently prepared to waive or bend some rules in order to allow the Athletics to give him more money to give up any thought of playing football but none of it was enough to convince him to stick with the team that drafted him first.
If you were a young two-sport, stud athlete you would have quite the decision to make. Yes, football is seriously dangerous and the salary cap essentially means that at every level of the sport you are likely to earn less than you would at a comparable level in baseball. But football doesn’t make you ride buses and play games for pennies for years before you get to start playing under the brightest lights.
Without the salary cap a baseball player has an opportunity for more career earnings than a football player, but a football player who gets drafted earns more money immediately than a baseball player. For example, Patrick Mahomes II is making $16.4M for the team across the street over the next four years. He will likely negotiate a contract extension before the deal ends that will guarantee him even more money. The nearly $5M the Athletics initially signed Murray to is nothing compared to that. The situation looks even graver for a baseball player when you consider that his earnings are strictly limited for the first six seasons after he reaches the big leagues. Murray would probably reach them sooner than many others 2018 MLB draft picks, he received an invitation to big league spring training, but even so the way MLB contracts are currently structured you have to give away a lot of time before the dividends for choosing that sport over football or basketball pay off for a player.
How does this apply to any alleged collusion or collusion-like activities? The risk-reward analysis is getting worse and worse. All else being equal choosing baseball over football is a bet on your athletic ability aging well, your ability to stay healthy, and teams’ willingness to pay you once you finally finish your rookie contract. If teams seem less willing than ever to pay you after your rookie contract then why take the risk? Get the guaranteed money in another sport.
MLB wonders why it seems harder and harder to get youth to join the sport. Maybe they should be concerned about why more and more college athletes are shying away from it, too. Baseball ownership’s rush to ensure they get as much money now as they possibly can is going to cost the sport in the long term. If they don’t figure out how to bring things back around you’ll see more Patrick Mahomeses and Kyler Murrays headed to football.
Of course, maybe they don’t care. According to a Calcaterra tweet, 17 baseball teams have changed hands over the last 18+ years. Why worry about the future of the sport if it won’t ever affect you? They can make their money and get out long before it affects them personally.