October 17, 2018

The Party No One Came To

March 15, 2018 by · Leave a Comment 

Tom Boswell had a fascinating column in this morning’s Washington Post examining whether Bryce Harper will get his $400 million, 10-year contract that has been the talk of baseball punditry for the past few years. The gist of it is that the current parameters of MLB contracts are exerting a downward pressure on salaries. Ask Jake Arrieta how it is working, or Mike Moustakas? They had all the party bunting hung, the champagne iced and the guests never showed.

And Boswell is suggesting the much vaunted 2018-2019 class of free agents should be prepared for something similar.  Josh Donaldson, Manny Machado, Dallas Keuchel and Craig Kimbrel should not be counting on their agents to read the marketplace because it is a new day.  Although teams, including Harper’s Nationals, have been saving their money to compete for the best of the bunch next December and January, the bidding war may be more constrained than many thought possible a few months ago. Or will it?

Boswell is more perceptive than many who have begun to write on this topic in that he flags the drag on contract negotiations created by the penalty system of qualifying offers.  There is no collusion, Bob Boone asserts in Boswell’s column; it is just smarter front offices making better choices. Driving this new reality is more than the luxury tax. It is not just the penalty of paying money into the competitive balance pool to help the Rays and Athletics.

The bigger variable is the CBA stipulation that a team that exceeds the luxury tax in the prior year will lose a second and fifth round pick as well as $1 million in international pool signing money. That is a huge factor, one that has far greater consequences than the luxury tax by itself. Boswell estimates the value of these penalties as somewhere between $50 and $75 million. Even to the Yankees and Dodgers, that is real money, and it is why they have been making such desperate moves to stay under $197 million for the 2018 season.

That is the current luxury tax figure–$197 million in total salary commitments. Only one team is on target to exceed that figure this season. The Boston Red Sox will be paying handsomely to chase the Yankees according to industry sources, though the Giants are perilously close.

That is the good news for Bryce Harper and company. Many of the most aggressive teams that will be bidding for his services at the end of this season can likely do so with minimal penalties. So Boswell’s cautionary note is warranted, but teams like the Nationals, Tigers, Dodgers and Yankees, who have been over the threshold in recent years, are under now and can sign Harper without the draconian penalties that held back many in the 2017-18 off-season.

The speculation about who is most likely to sign Harper, and for how much, has been out there for years and Boswell cites the $400 million for 10 years figure that has been the most popular ceiling number that I believe originated with Peter Gammons. But does the figure make sense in the current climate?

I am not sure we know the climate exactly. If the teams have been working so hard to get under the competitive balance tax–as it is also known–then will not such exertions make for ravenous appetites as the big boys binge anew at the free agent smorgasbord? With the Dodgers, Yankees, Cubs and Nationals all able to bid for Harper’s services, is he not in the catbird seat as he always wished to be??

As Boswell asserts, the Nationals will have $70 million in salaries come off their payroll as Gio Gonzalez, Daniel Murphy, Matt Wieters, Harper and Ryan Madson hit free agency for the 2019 season. So the Nationals could be in the bidding for Harper and given his popularity with the fan base, it is likely they will. But regardless the outcome there, Washington and the other top tier teams have positioned themselves well. The loser will be left to pick from a very juicy menu.

Washington will be without a left-handed starter when Gio Gonzalez leaves and Dallas Keuchel will be available. Could that be a more tantalizing choice than Harper given that Victor Robles is auditioning for his spot as we speak? Could the magic bullet be having a lights out closer like Kimbrel? Or could they enjoy luring Manny Machado to Washington to play shortstop and use Trea Turner at second base. So many choices; so much money to spend on them. Almost seems like a recipe for outlandish bidding to begin all over again.

A lot will change in the next nine months and the market will likely be notably different in many respects. But one thing will not change and that is the drag that is being exerted by smart new front office staff who don’t want to pay a 33-year old star $25 million annually for the next seven years. The question is whether the effect will be as potent in 2019 as in 2018?

Jayson Werth’s departure from the Washington clubhouse offers a measure of the change that is being seen. The Nationals no longer need to prove to top tier talent that they are competitive and will not have to overpay to make that point–as they did with Werth. But his seven-year, $126 million contract for a 32-year old player is unlikely to be seen again in Washington because the market has begun to value those players more accurately. Still, if Dallas Keuchel–who will be 31 next winter–is the prime target for the Washington front office, what are they going to pay if that is the missing link for a pennant run?

Who knows. Never say never. This is baseball after all and no one saw the free agent slump of 2018 coming either. As soon as the adjustment to the new situation has been made, BOOM! here comes something new hurtling at you like a juiced baseball going 100 mph. As my mother used to say, “you are just going to have to wait, Teddy.” Now there was someone who knew the future.

 

 

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