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Wednesday, January 17, 2018

Rubbing Mud: The Evidence of Price Fixing We Have So Far - Baseball Prospectus

Time to get out the Reynolds Wrap.

Now we’re getting into something more sinister, even if it’s not something actionable. If there’s a kind of slotting system developing (however implicit it might be), then the owners are distorting the salary structure of the game, using their advancements in analytic intelligence and the new Collective Bargaining Agreement as cover. If good players with widely disparate skill sets and likely aging profiles are taking their talent to the market and finding an eerily similar, lower-than-expected amount of money waiting for them, something bad is going on.

By the time spring training games begin, this could all be behind us. It’s possible (and perhaps this should be highlighted more often) that owners are anticipating the $50 million windfall each will receive sometime in the next 90 days (thanks to the league’s sale of MLB Advanced Media, to Disney) and would prefer not to make their major expenditures until that money pours in. Maybe the Scott Boras effect is stronger than we think. (I already think it’s quite strong, and a better explanation for the state of the market than is generally understood.) If we look around this summer and find that the market never heated up, though, and that the cost of a win on the free agent market has significantly sagged, remember these similar deals and offers and consider that the evidence of price fixing (even if it be passive price fixing) might be stronger than we think.

The longer this lasts doesn’t prove anything. If I’m Dave Dombrowski and J.D. Martinez hasn’t signed, why would I increase my offer? If it’s me, it just reinforces my belief that I don’t have to exceed my comfort level. This goes for every other team as well. It’s a new trend; it doesn’t have to be planned or coordinated.

Jim Furtado Posted: January 17, 2018 at 11:44 AM | 24 comment(s) Login to Bookmark
  Tags: economics, free agents

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   1. Jose is an Absurd Doubles Machine Posted: January 17, 2018 at 11:52 AM (#5608013)
The writer can break out all the "unusually neat scaling" comments he wants but it doesn't prove anything. Nor does saying everyone knows Alex Cobb is worth more than Tyler Chatwood make it true.

I mean there is a pretty strong case to be made that the luxury tax is too low but it is what it is and in that universe the contracts reported to be out there for guys like Hosmer, Martinez, Cobb, etc...seem pretty reasonable. If Eric Hosmer really has a 7/140 offer out there and hasn't taken it I mean...I wouldn't give him 8 or 9 or 10 years unless those last few years were basically free.
   2. cricketing baseballer Posted: January 17, 2018 at 01:29 PM (#5608146)
The writer can break out all the "unusually neat scaling" comments he wants but it doesn't prove anything.

But what evidence would prove something?

The first sign we would have to look for more clear-cut evidence would be a demonstration of a pattern that doesn't fit previous off-seasons.

In the end it might not mean anything, but one has to start somewhere.
   3. JAHV Posted: January 17, 2018 at 02:10 PM (#5608193)
I'd generally rather see the players get paid than billionaire owners keep the money, but this seems more like a market correction to me than anything else. Long contracts for aging players are risky and often don't realize full value. Front offices are wise to that and maybe they're finally not willing to pony up for the name value of veteran stars. Combine that with what seems to be an unusually high number of teams going the rebuild/tanking route, plus full rosters hindered by the luxury tax from the normal big spenders, and it leads to this.
   4. JRVJ Posted: January 17, 2018 at 02:24 PM (#5608214)
I think that the real problems for FAs started when the Ruben Amaro, Jr.'s of the world got kicked out of the Executive Suite.
   5. What did Billy Ripken have against ElRoy Face? Posted: January 17, 2018 at 02:33 PM (#5608225)
this seems more like a market correction to me than anything else. Long contracts for aging players are risky and often don't realize full value. Front offices are wise to that and maybe they're finally not willing to pony up for the name value of veteran stars.

Exactly. As I posted in another thread a while back, it looks like teams have *finally* realized that a "pay me the value of the best season of my prime until I'm 39 years old" contract isn't going to work out too well for them. The fact that it somehow took this long to get wise to the obvious isn't an indication of collusion. We've joked for years about how all it takes for Boras is to find the one dumb/panicking team, which he has usually succeeded in doing eventually, but when you're banking on finding one team, it doesn't take a huge change to reduce the one to zero.
   6. JRVJ Posted: January 17, 2018 at 02:42 PM (#5608238)
but when you're banking on finding one team, it doesn't take a huge change to reduce the one to zero.


And when you have FIVE FAs in the same off-season period, it gets complicated to pull all those rabbits out of hats.
   7. The Ghost of Logan Schafer Posted: January 17, 2018 at 02:46 PM (#5608243)
I can't believe Hosmer doesn't jump all over the 7-year offer from the Padres. Do you really need that 8th year??
I hear the weather is pretty nice in San Diego. Just accept their offer and hit the beaches, my brotha.
Don't worry about 2025 until it gets here.
   8. What did Billy Ripken have against ElRoy Face? Posted: January 17, 2018 at 02:47 PM (#5608246)
it gets complicated to pull all those rabbits out of hats.

If Boras's recent quotes are any indication, he'll blame the haberdasher for delivering defective wares.
   9. Stormy JE Posted: January 17, 2018 at 02:57 PM (#5608256)
I think that the real problems for FAs started when the Ruben Amaro, Jr.'s of the world got kicked out of the Executive Suite.
This. Are there more than one or two franchises left who don't have a handle on quantifying a player's worth?
   10. Greg Pope Posted: January 17, 2018 at 03:33 PM (#5608293)
it looks like teams have *finally* realized that a "pay me the value of the best season of my prime until I'm 39 years old" contract isn't going to work out too well for them.

Or maybe it's just this class. Let's see what happens with Machado and Harper next year before making generalizations.
   11. What did Billy Ripken have against ElRoy Face? Posted: January 17, 2018 at 03:55 PM (#5608310)
Or maybe it's just this class. Let's see what happens with Machado and Harper next year before making generalizations.

Fair point. Although teams *should* realize that w/r/t Machado and Harper as well.
   12. Bote Man Posted: January 17, 2018 at 03:59 PM (#5608314)
Jayson Werth is bowing down and kissing the [body part] of [deity/GM/good luck charm].
   13. Bring Me the Head of Alfredo Griffin (Vlad) Posted: January 18, 2018 at 09:26 AM (#5608612)
From the headline, I thought this was going to be an article about price-fixing in the "rubbing mud" market, and I'm kind of disappointed that it isn't.

Not that price-fixing there would be too big a surprise, Lena Blackburne having a monopoly on it and all. But I was still curious where the writer was planning to go with the idea.
   14. Rally Posted: January 18, 2018 at 09:41 AM (#5608618)
This. Are there more than one or two franchises left who don't have a handle on quantifying a player's worth?


Probably none. Maybe the Marlins - they certainly have people who can quantify player value, but we don't know how much decision making power they have relative to a certain ex-shortstop. But it's a moo point, since they don't have anything of value to compensate players with.
   15. Zonk, Bearer of Responsibility Posted: January 18, 2018 at 10:23 AM (#5608646)
I'd generally rather see the players get paid than billionaire owners keep the money, but this seems more like a market correction to me than anything else. Long contracts for aging players are risky and often don't realize full value. Front offices are wise to that and maybe they're finally not willing to pony up for the name value of veteran stars. Combine that with what seems to be an unusually high number of teams going the rebuild/tanking route, plus full rosters hindered by the luxury tax from the normal big spenders, and it leads to this.


Agree. I rarely pass up an opportunity for owner bashing, but I'm just not seeing anything here besides a perfectly logical correction, exacerbated by the fact that it's NOT a very strong FA class, and the names it contains are NOT very good fits for teams that think they're contenders.

You can argue that there are enough teams that need another SP - but Cobb really shouldn't get more than Chatwood, while both Darvish and Arrieta are a notch below the 200 mil pitchers that signed in past seasons. Plus - there are just fewer of those contenders that really NEED another SP.

It seems like a confluence of events and an evolution of FO thinking to me, much more than any real hint of collusion.
   16. Jose is an Absurd Doubles Machine Posted: January 18, 2018 at 10:33 AM (#5608655)

Not that price-fixing there would be too big a surprise, Lena Blackburne having a monopoly on it and all.


Didn't they change this a few years ago?
   17. Zach Posted: January 18, 2018 at 06:22 PM (#5609094)
If you just look at the tables and ignore the heavy breathing from the author, it doesn't look like evidence of anything. Wade Davis is a name player, and he's getting $17.3 million for three years. The other guys are quality veterans but hardly standouts.

Put it this way: suppose you could have your pick of the non-Wade Davis relievers for $12 million per, or else pick a name and a salary at random from the rest of the list. Which one would you choose, and why? Personally, I'd take my chances with the random drawing.
   18. Zach Posted: January 18, 2018 at 06:27 PM (#5609097)
Cobb should have a healthy offer of four years or an annual average value of $16 or $17 million by now, but there are indications that he simply doesn’t. Fellow free agent Lorenzo Cain’s highest offer, I was told by two sources, currently sits only insignificantly higher than those reported Cobb offers.

Alex Cobb is going into his age 30 season with a lifetime OPS+ of 111. Lorenzo Cain is going into his age 32 season, with a lifetime OPS+ of 106. You want to commit $65-$70 million for the bad part of those aging curves?
   19. Fancy Crazy Town Banana Pants Handle Posted: January 18, 2018 at 07:14 PM (#5609129)
Alex Cobb is going into his age 30 season with a lifetime OPS+ of 111.

Alex Cobb has a lifetime OPS+ of -35 actually. In 18 PAs.

111 ERA+ is fine. I would happily give a 30 year old guy 5/$100m, if he had an ERA+ of 111 and was pitching 180-200 innings a season, and was as good a bet as any pitcher to stay healthy.

Cobb's problem is he has never pitched 180 innings, and has missed basically the 2 full seasons before last. He is 30 and has 700 career innings. That's. Not. Good.

It's obviously impossible to say for sure what you would value him at, without having access to his medicals. But it's entirely possible, that the reason "he simply doesn't" have an offer for four years, is because his arm looks like hamburger meat.
   20. Zach Posted: January 18, 2018 at 07:34 PM (#5609140)
D'oh! You're right, I didn't read his page carefully enough.

But the point remains that these are all replaceable players, and we're heading into an era where cable TV revenues are going to be pressured by cord cutting.

If you're looking at a period of stagnant revenue, maybe you don't want to mindlessly sign on to the idea that salaries always go up.
   21. 6 - 4 - 3 Posted: January 18, 2018 at 09:38 PM (#5609228)
It's obviously impossible to say for sure what you would value him at, without having access to his medicals. But it's entirely possible, that the reason "he simply doesn't" have an offer for four years, is because his arm looks like hamburger meat.

Darren Dreifort comes to mind as a possible comp. He had 667 IP (188 G, 87 GS) when he signed his $55M/5yr deal in the 2000-01 off-season. The Dodgers got a little over 200 innings from that contract.

If Cobb is confident that he's completely healthy, then he should sign a high AAV pillow contract and show that 2017 wasn't a one hit post-TJ wonder. But it's hard to fault any team not wanting to commit the dollars and years that he's apparently looking for.

   22. cardsfanboy Posted: January 18, 2018 at 10:11 PM (#5609258)
Cobb should have a healthy offer of four years or an annual average value of $16 or $17 million by now, but there are indications that he simply doesn’t. Fellow free agent Lorenzo Cain’s highest offer, I was told by two sources, currently sits only insignificantly higher than those reported Cobb offers.


The difference between Cobb, Lynn, Arrieta and Darvish is pretty much nothing.... So it doesn't seem strange to see teams waiting on the market to see the first of those guys signed.
   23. Zonk, Bearer of Responsibility Posted: January 18, 2018 at 11:33 PM (#5609308)
The difference between Cobb, Lynn, Arrieta and Darvish is pretty much nothing.... So it doesn't seem strange to see teams waiting on the market to see the first of those guys signed.


I wouldn't say it's nothing - but I would probably agree that it's closer than people think.

I think Cobb expects to be paid like he's Chris Carpenter reborn - and there's a non-zero chance he might hit that proximity - but he needs another year (or better peripherals) to deserve that sort of deal.

Lynn is probably getting screwed here most - he's underrated, but its his REAL bad luck to have missed 2016. Cobb is probably the lottery ticket, but I bet Lynn ends up being the best value buy.

I think Jake's 2015 actually hurts him - I think it's pretty obvious he's not getting there ever again, but he wants to get paid like it's a possibility. Nobody's gonna pay for that. He'd probably have been better served if he had posted a 2015 more in line with his 2016 and 2017 - and entered things as a durable, low-mileage arm who had learned how to pitch and was a reliable #2. Instead, he's a guy who was dynamite two years ago - but now has peripherals going the wrong direction and a real concern that hitters have just Marmol'ed his slider and learned to spot it and let it squirt low and away. If there's a plus for him - it's that his walk rate improved a bit and I think he's adjusting to the adjustment... but that's somewhat countermanded by emerging health maybes.

Darvish, meanwhile, has a ton of mileage, a recent lost season, and a WS stinker.

I think there's a clear 1-2-3-4 -- but I think they (and/or their agents) all want upside.... and no one wants to pay upside prices.
   24. Bring Me the Head of Alfredo Griffin (Vlad) Posted: January 19, 2018 at 10:09 AM (#5609391)
The difference between Cobb, Lynn, Arrieta and Darvish is pretty much nothing....


I think Darvish is pretty clearly the best of the four, and this seems like a good opportunity to get him at a discount.

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