Five Reasons MLB Free Agents Are Signing Longer Deals Than Ever
If there’s one theme of the MLB offseason, it’s that superstars sign contracts years in advance, which sounds like science fiction. Until this winter one free agent Bryce Harper made a more than a decade long commitment in March 2019. That amount has quadrupled in the past few weeks with Trea Turner and Xander Bogaerts signing 11-year contracts with the Phillies and Padres respectively, and Carlos Correa signed two different long-term deals; the first, a 13-year deal with the Giants, was canceled and replaced with a 12-year deal with the Mets. Turner and Bogarts are now on a 40-season contract, while Correa’s slightly shortened term will extend his 39-year season. If you were born before these players, I do not recommend doing math, how old are you. You will be when their deals are done.
Pretty long-term commitments were not reserved exclusively for the three main market short stops. Aaron Judge, who turns 31 in April, has signed a nine-year deal. Brandon Nimmo got eight years, Dansby Swanson seven, and Carlos Rodon six. Even Andrew Benintendi signed a five-year contract, as did Wilson Contreras and Kodai Senga.
Swanson, who joined the Cubs on Saturday, was the last to sign with the top 20 free agents. MLB Trade Rumors ranking, which allows us to make some clean comparisons. MLBTR founder Tim Dirkes began ranking free agents in the 2005-06 offseason, giving us an 18-year sample to gauge this winter’s activity. And, as one might expect, the contracts of the most coveted free agents this year are extraordinarily long. The chart below shows the average length of contracts signed each offseason by the top 10 and top 20 free agents.
These are significant surges. Over the past 17 offseasons, the average contract length of the top 20 free agents has been 3.3 years. In the off-season, 5.5 years have passed, which is about 63% more than the established baseline. The growth is even more noticeable for the top 10 companies, whose deals are closed on average for 7.6 years, which is about 78% higher than the historical norm of 4.3 years. It wasn’t the annual paychecks that surprised people (although they are higher than ever): the top 10 and top 20 free agents received $27.8 million and $24.3 million a year respectively this winter, below MLBTR’s projected rates of $30.8. million and 24.8 million dollars. But the number of years per agreement exceeded MLBTR forecasts by an average of 0.7 years for the top 20 free agents and 1.8 years for the top 10. (Justin Verlander) and four of the top 20 received Briefly speaking transactions than expected.
At first glance, this all seems somewhat curious, given some opposing tendencies. Like Scott Miller observable V The newspaper “New York Times, the results of 24 contracts to date lasting 10 years or more do not overwhelmingly favor additional 10-year deals. Miller notes that “no free agent who signed such an agreement remained on his team for the entire duration of the contract,” and only one recipient of an ultra-long extension (Derek Jeter) went the distance with one team. (Of course, many of those contracts are still in place.) Today’s players aren’t doing any better either, despite improvements in coaching, training, and nutrition (which also benefit younger players). Quite the contrary, in fact: in 2020, analyst Jeff Zimmerman found that compared to earlier eras, “Strikers seem to be aging faster, especially after a 30-year season.” We are not far from winter whenDon’t trust anyone over 30“it seemed motto of general managers, which has been partially blamed for a number of stagnant markets. However, teams are suddenly queuing up to sign players who have reached sports aging. What gives?
As you might guess, teams have their reasons, including the following five:
1. Happy days are here again
Even in 2020, owning MLB wasn’t all that bad, despite claims from some of them. But in the first “normal” offseason since 2019, after the peak of the pandemic is long past, and with a new labor agreement, baseball’s boom times are back. 2022 regular season attendance come back to 94 percent from 2019 levels, compared to 66 percent in 2021 and zero percent in 2020 when players played in front of empty stands or cardboard cutouts. Sponsorship deals rake in cash (With stripes on shirts expected so that sponsorship money will skyrocket in 2023), broadcasting and streaming rights revenue hold mountaineeringand every owner just got $30 million payout following the completion of Disney’s purchase of MLB’s streaming technology subsidiary. In general, revenue recovered To near-record levelsnot counting capital raised from sources the league considers unrelated to baseball, such as land developments and the Disney deal.
A flurry of spending last offseason in November led to more modest increases in contract lengths, but those deals fell through amid fears of a shutdown that threatened to jeopardize the 2022 season. With no lockout in sight this winter, short-term certainty from the CBA and more clubs competing from behind the 12-team playoff field, teams feel more confident about spending. And with the latest round of labor battles, owners have less immediate motive to complain about “biblical losses and performantly turn their pockets inside out and pull them inside out, like test subjects in stock photos of ruined businessmen. Basically the conditions were ripe for teams to go broke, and of course, that’s what we’ve seen.
Some sources on the team complained about the disparity in resources – one anonymous executive whined To AthleticJason Stark on “irrational people operating in an illogical market” and another mourned to Stark colleague Evan Drellich that the Mets show “no concern about the long term of any of these contracts in terms of the risk associated with any of them.” But even if not every club It has bottomless bankroll, other billionaires also live in massive mansions. Most, if not all, clubs spending less on wages overall than the Mets would spend on competitive balance taxes alone could afford it. increase spending and chase superstars.
2. ABC, CBT, AAV, Baby You and Me
You’ll be shocked to learn that in leagues with pay caps, teams sometimes resort to creative accounting to buy themselves more payroll space. Hence the “contested agent freedom years” of the NFL or, most infamously, the NHL. Ilya Kovalchuk contractin which the New Jersey Devils tried to sign Kovalchuk to a 17-year contract that would earn him $98.5 million over the first 11 years, and then $550,000 in each of the last few seasons, until until the attacker is 44 years old. wrecked the deal in a clear attempt to cheat the ceiling system, which was determined by the average annual cost, by choosing seasons in which Kovalchuk did not make much money and in fact should not have played.
Much to the delight of Mets owner Steve Cohen, there is no hard cap in MLB, but there is a soft cap in the form of a competitive balance sheet tax, which also essentially works by adding up the average annual value of contract players. By making these contracts longer, teams can meet player dollar needs while lowering AAV, thus giving themselves more room to add players without incurring wage penalties. Given the current incentives, it’s no surprise that MLB teams continue to push the envelope until someone tries to enter the Kovalchuk zone.
This idea came to mind clubs. Phyllis reportedly was going to offer Harper a 20-year contract in 2019 before offering him first 15 years and then 13 years. New York PostJohn Heyman reported this month that before the Yankees re-signed the umpire, the Padres were “considering a deal worth more than $400 million over 14 years that would have turned the umpire 44” but “they weren’t allowed to like how MLB only sees the extra years as an attempt to lower the official payroll to reduce the tax.” However, other members of the media doubt that MLB rejected the idea of the Padres: AthleticKen Rosenthal wrote that “The Padres never made such an offer to Judge, so there was nothing for the league to consider,” while league sources cited by ESPN’s Buster Olney disputed that MLB “would have rejected one of the contract structures that the Padres discussed.”
The CBA says teams and clubs cannot enter into agreements “designed to defeat or circumvent the intent” of the competition balance tax, which they may already be doing. But the long-term deals we’ve seen so far haven’t spread far enough or required low enough AAVs to test the league’s tolerance, which doesn’t mean we won’t get there.
The incentive to bypass CBT has existed since the introduction of the tax. 25 years agobut the penalties gradually became more severe and even included potential project selection expenses. Like Joe Sheehan wrote recently: “Teams now have the strongest incentives in a long time to minimize AAV. There was a time they did this to cut short-term costs, before massive deals with national and local television made next year’s cash flow a non-issue. Now they want to lower the AAV so the payroll doesn’t get in the way of their work in the amateur talent markets.” Voilà: long contracts in the top positions leaderboard by total dollars no closer to establishing high AAV scores. And even when we see some players, young and old,…