Baseball is experiencing a through-the-looking-glass offseason.
On one hand, the free agent market has been as lively as it’s been in years. There have been 10 free agent signings of at least $50 million, the most since the winter of 2015-16.
Traditional spenders have led the way, with the Yankees (Gerrit Cole), Angels (Anthony Rendon), and Nationals (Stephen Strasburg) dropping the most coin. But the Blue Jays (Hyun-Jin Ryu), White Sox (Yasmani Grandal, Dallas Keuchel, and Jose Abreu), Diamondbacks (Madison Bumgarner), and Reds (Mike Moustakas) have contributed to a boom market for free agents. Small- and mid-market teams are spending.
At the same time, some of the game’s most revenue-rich clubs have been open to conversations about shedding signature players from their payrolls. The Red Sox are fielding offers about Mookie Betts, the Cubs are open-ears on Kris Bryant, and the Astros took the market’s pulse on Carlos Correa at the Winter Meetings.
How to explain the dichotomy? In some ways, the openness of recent title contenders to such drastic roster shakeups reflects a late stage in the development of homegrown cores in an era where teams are treating the luxury tax as a major constraint.
The creation of waves of prospects has been a prerequisite in recent years to contention, as players who are not only young but cheap — especially in their first three-plus seasons, before becoming arbitration-eligible — permit teams tremendous flexibility to construct contending rosters.
Cheap players allow teams to take high-priced gambles in the free agent market, as the Cubs (Jon Lester, Jason Heyward, Yu Darvish) and Red Sox (David Price, J.D. Martinez) did. Yet as once-inexpensive players see their salaries escalate while going through the arbitration process, the room to maneuver around those free agent deals — at times when the production of the veterans typically declines — vanishes.
After four or five years together, homegrown cores can transform from sources of financial flexibility to rigidity. As good players start to earn closer to their market value, teams face the possibility of exploding payrolls.
“The two most important commodities in the game are payroll flexibility, No. 1, and young, controllable talent. Even if you’re a large-market team and have no payroll flexibility, you’re a small-market team,” said former Rockies general manager Dan O’Dowd, now an MLB Network analyst. “Windows close very, very quickly within the game. Everybody wants to build a Bill Belichick model [of sustainability], but with guaranteed contracts and the way our sport works, it’s very, very difficult to do that.”
On one hand, the arrival of several young players in the big leagues at roughly the same time can herald the opening of a contention window. At the same time, such a group will collectively get tens of millions of dollars a year in raises. Eventually, whether because of market size (Cleveland) or a desire to get below the luxury-tax threshold (Red Sox, Cubs, Astros), a team reaches a point where it struggles to maintain its core.
“You can hear the clock ticking,” said O’Dowd.
“If you have a whole group [or prospects], they can get expensive in arbitration at the same time and potentially depart at the same time,” said Astros GM Jeff Luhnow. “It forces you to maybe make some more fundamental changes than you want to.”
Related: Trading Mookie Betts doesn’t seem to be high priority for Red Sox
How to escape such an unwanted end point? The title window of a homegrown core can be drawn out by early-career extensions.
The 2007-13 Red Sox offer a case in point. In the winter of 2008-09, the team secured affordable long-term deals with Dustin Pedroia and Lester before they had reached arbitration eligibility. Pedroia and Lester thus remained on the roster as cost-controlled, affordable anchors of another title run in 2013 — beyond when they would have been eligible for free agency (after the 2012 season) in the absence of those extensions.
But, of course, it takes two to tango, and several young stars such as Betts and Bryant have been perfectly happy to go year to year in contract talks rather than explore extensions. Both have rejected multiple efforts by their teams to discuss long-term deals.
As a result, the Red Sox and Cubs are nearing an uneasy crossroads: Either give their star players massive, long-term deals at full market value that may further constrain payroll down the road or risk losing them.
“The window to sign Mookie was years ago,” said O’Dowd, who as assistant GM with Cleveland in the 1990s helped to create the model of long-term extensions for young players. “In his case, if they knew that this guy has no fear of going year to year, then he’s the one you’ve got to do way before he even gets good.”
That didn’t happen — it will be interesting to see whether the Sox change course this winter and try to extend Rafael Devers before he reaches arbitration eligibility — and so the Sox are engaged in their awkward winter dance, hoping to clear payroll around Betts or through him. The Cubs and Astros are in similar boats, trying to see whether they can choose their direction on the water or if they’ll get pushed by the currents.
Meanwhile, some smaller-market teams without long-term payroll commitments — and with homegrown cores in earlier stages of their competitive and financial cycles — are diving headlong into the free agent market this winter. The result has been a most unusual offseason in which typical assumptions about who will and won’t spend have been flipped.
MONEY POURING IN
Revenues suggest game is healthy
There are unquestionably questions and concerns about the long-term health of a game that just experienced a fourth straight season of attendance declines and a ninth drop in turnout over the last dozen seasons. Nonetheless, this winter’s robust spending is a reflection of a ruddy overall disposition for the sport.
According to Maury Brown of Forbes, MLB made a record $10.7 billion in revenues in 2019 — an average of more than $350 million per club. Meanwhile, that same report noted that major new sources of revenue — a $1 billion agreement with Nike that takes effect in 2020, and a new national TV deal with Fox that will add hundreds of millions of dollars in annual revenue starting in 2022 — suggest that the industry is in a boom time. The recent sale of the Royals for $1 billion, up from the $96 million purchase price in 2000, further underscores the wealth flowing into the game.
This offseason’s free agent spending offers more evidence that robust revenues, in tandem with a revenue-sharing structure that subsidizes smaller-market teams, give nearly all clubs the ability to spend aggressively on player talent. So why haven’t more teams done so in recent years?
Agent Scott Boras theorizes that while there are disincentives such as luxury-tax penalties that discourage teams’ ambitions to compete, there aren’t enough incentives for teams to pursue winning. Baseball’s playoff system is perhaps too restrictive, with just 10 teams (compared with 12 in the NFL and 16 in the NBA and NHL) invited into the October tournament.
With the Nationals having demonstrated anew the ability of a wild-card team to win the World Series, Boras argues that more playoff spots would create more fan interest — as well as a greater willingness of owners to spend some of the enormous streams that are flowing into the game. If, for instance, there were seven playoff teams and two wild-card games in each league instead of five and one, more teams would have an incentive to add at the trade deadline rather than standing in the middle or selling off.
“Why do we not have a broader playoff structure? Then you’re going to get rewarded for getting into the playoffs. First of all, your fan base comes out. It gives them a purpose,” said Boras. “You’re losing fans without being in the playoffs. One thing about the playoffs, they sustain fans . . . Create some mystery [by broadening the playoffs]. See what happens.”
Studying game in great detail
A study commissioned by Major League Baseball found that year-to-year variability in the baseball played a meaningful role in the 2019 home run surge, while also noting that ball-to-ball variation surpasses year-to-year impacts on a baseball’s drag.
For decades, the ball has been assumed to be a constant. Recent research punctures that myth, meaning that the playing conditions change significantly from year to year and pitch to pitch. In all likelihood, the only way to address those changing conditions is to use a synthetic ball — a step that MLB seems uninterested in exploring.
“We understand the variability in the baseball better today than we did at any point in the history of the game. The fact that we understand the variability, I don’t really see as a motivator to do something drastic in terms of changing the way the game is played,” commissioner Rob Manfred said recently. “I think the variability in the baseball is a product of the fact that it is a man-made product with natural materials. I think that’s part of the charm of the game, and the reason that I’m prepared to live with that variability is both teams play with the same baseball.”
Related: Why the baseball is causing chaos throughout baseball
And an April 2019 study by Mark Williams of Boston University’s Questrom School of Business found that, based on Statcast data, umpires had missed 34,294 ball/strike calls — about 14 per game, or 1.6 per inning — in 2018. Umpires are roughly twice as likely to expand the zone on two-strike counts than earlier in the count, meaning that some of baseball’s sky-high strikeout rates are attributable to umpire error. That number has been declining, but even so, Statcast identified 2,202 called third strikes that were out of the strike zone in 2019.
As such, it comes as little surprise that the recent five-year agreement between MLB and the MLB Umpires Association — which still must be approved by owners and the members of the Umpires Association — includes an agreement for umpires to cooperate in the development of an automated ball/strike system. It would be years before such a system was implemented at the big league level, but the pilot programs in the independent Atlantic League during the second half of this past summer and the Arizona Fall League in September and October suggest that the automated strike zone is a when-not-if proposition.
■ Before they signed Hyun-Jin Ryu, the Blue Jays did have internal conversations about the possibility of trading for David Price. The willingness to discuss Price before signing Ryu to a four-year, $80 million deal points to the financial flexibility that Toronto anticipates over the coming three to four years, with a strong positional core that includes Vladimir Guerrero Jr., Bo Bichette, and Cavan Biggio.
■ The Sox were interested in bringing back Travis Shaw before he signed a one-year, $4 million deal with the Jays. But the Sox weren’t prepared to make Shaw an offer without first moving salary via trade, so the corner infielder went elsewhere in the division.
■ Edwin Encarnacion has reportedly agreed to a one-year, $12 million deal with the White Sox following an age-36 season in which he hit .244/.344/.531 with 34 homers for the Mariners and Yankees. Nelson Cruz, meanwhile, hit .311/.392/.639 with 41 homers in his age-38 season for the Twins, making Minnesota’s decision to pick up his $12 million option for 2020 a no-brainer. As much as the game is skewing ever younger, several elite, middle-of-the-order hitters have sustained production into their late 30s in recent years. Based on his sustained production of the last six years, J.D. Martinez would seem a good bet to follow that path.
That said, one major league source characterized Martinez as “untradeable” by the Red Sox. Martinez is owed $23.75 million this coming season, with $19.75 million salaries in 2021 and 2022. However, he has the ability to opt out of the deal after each of the next two years, making any commitment one of somewhat uncertain length and terms. That uncertainty suggests difficulty in finding common ground on potential trade value.
■ Middle infielder C.J. Chatham looms as a middle infield depth option for the Red Sox early in the season. The 25-year-old, a 2016 second-round pick, has shown the ability to hit for average while contributing solid defense at shortstop and second base. “He’s almost a throwback player. When I say throwback, it might be five or 10 years ago,” said Phillies pitching coach Bryan Price, who saw Chatham with Team USA in the Premier12 in November. “He’s just a really solid player. He played second base for Team USA, but I know he can play short. I think he can do both very, very well, at a very elite level defensively. He’s a guy that puts the ball in play and takes what’s given to him. He was probably one of our most consistent at-bats. He puts the ball in play, has a little bit of pull-side power it looks like, and just a really solid player.”
■ Red Sox minor league outfield and base running coordinator Darren Fenster was named the first recipient of USA Baseball’s Coach Educator of the Year award. Fenster is a regular contributor to USA Baseball’s sport development blog, offering advice to coaches, parents, and leagues to assist in the development of young players while improving the playing experience. The 41-year-old has coached in the Sox system since 2012.
■ Name to file away: Luis Perales, a 6-foot-1-inch, 170-pound righthander signed by the Sox out of Venezuela last summer. He left jaws agape when he sat at 91-93 miles per hour and touched 95 in the Dominican instructional league while also showing the potential for an above-average breaking ball and slider. One evaluator described the 16-year-old as possessing “huge upside” for a system that has more promising arms than at any time in recent years. “The baseball world will hear about him after this year,” said another, suggesting that his projectable frame, athletic delivery, and quick arm point to a future starter.
■ Milton native Alex Hassan, who spent three games in the big leagues with the Red Sox over the course of an eight-year playing career that included six seasons in the Sox system, has emerged in a key role in the Twins’ front office. Hassan, 31, is director of player development, a position to which he was promoted in November.
■ Happy birthday to Bryce Brentz, who turns 31 on Monday. The 2010 supplemental first-round pick, who has spent nine of his 10 pro seasons in the Red Sox organization and parts of seven years in Triple A Pawtucket, is playing winter ball for Santurce in Puerto Rico after hitting .216/.314/.445 with 18 homers for the PawSox in 2019. He’s open to a minor league deal or playing internationally, but also recognizes that he may face difficulty finding a job after a down year.
“You only get a short time to play this game. If a team from abroad calls and wanted me over there, I’d go in a heartbeat,” said Brentz. “I still feel like when I touch the ball, it’s in there. I impact the baseball when I hit it . . . But I’m going to be 31. That’s getting up there. I’m a realistic human being. It’s a young man’s game. Being 30 isn’t old age, but in baseball, you kind of feel like it is. I’m still trying to improve, see what happens.”
And finally, happy birthday Bill “Spaceman” Lee, who turned 73 on Saturday. Lee’s 784⅔ career innings at Fenway Park are the fourth most by a lefthander in Red Sox history, behind Mel Parnell, Lefty Grove, and Herb Pennock. If asked, Lee would probably be ready to throw nine innings today.
Alex Speier can be reached at email@example.com.