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Friday, January 19, 2018

The 2017-18 Offseason: Trend or Anomaly? - MLB Trade Rumors

There is a lot of misinformation and baseless conjecture out there from people trying to figure out the current market. This includes MLB personnel. Last night I was more than surprised to hear MLB Radio Network’s @CaseyStern saying MLB is blatantly colluding to keep free agent salaries down. Don’t get me wrong. I wasn’t completely surprised; he says a lot of stupid stuff. To hear an announcer, who is essentially employed by MLB, making the case for collusion so strongly did keep me listening to his show a few more minutes than I normally do. (I usually immediately change the channel when I hear his voice.)

Still, is there legitimacy to teams wanting to dip beneath the line? If so, what does that tell us? Passan says that limboing under the luxury tax for one year and then jumping back to a $246MM payroll would save the Yankees and Dodgers “only $12 million in luxury-tax penalties.” But his approach — simply comparing the hypothetical 2019 tax rate between scenarios in which these organizations do or do not end up over the luxury line in the prior year — seemingly ignores a few other factors. Since the tax rate rises with each consecutive year in which the line is passed, there’s more than one future season of payroll to consider. Plus, the new CBA includes a surcharge on exceeding the tax by more than $20MM (12%) and exceeding it by $40MM or more (a whopping 42.5% plus a loss of ten places in the first-round draft order; 45% on the second consecutive time). As ESPN.com’s Buster Olney notes on Twitter, the Dodgers and Yankees “might have a $100+ [million] incentive to get under” for one year, all things considered.

Jim Furtado Posted: January 19, 2018 at 06:39 AM | 12 comment(s) Login to Bookmark
  Tags: economics

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   1. Rally Posted: January 19, 2018 at 08:28 AM (#5609345)
Looking at the Yankees contract page, they can probably add a mega-free agent next year and still stay under the luxury tax line. Sabathia, Robertson, Gardner all come off the books, which is near 35 million. They only have 88 million committed, mostly to 4 players. Of those 4 the only contract they don't want is Ellsbury. Of course they have a bunch of arbitration eligible players to raise the payroll well beyond that.

They can probably break the bank for one guy, only go over 200 million if they try to add 2, or add one plus several mid-priced free agents.
   2. snapper (history's 42nd greatest monster) Posted: January 19, 2018 at 08:56 AM (#5609357)
Looking at the Yankees contract page, they can probably add a mega-free agent next year and still stay under the luxury tax line. Sabathia, Robertson, Gardner all come off the books, which is near 35 million. They only have 88 million committed, mostly to 4 players. Of those 4 the only contract they don't want is Ellsbury. Of course they have a bunch of arbitration eligible players to raise the payroll well beyond that.

They can probably break the bank for one guy, only go over 200 million if they try to add 2, or add one plus several mid-priced free agents.


They don't actually need to stay under $200. They just need to stay under the first surtax threshold ($226M in 2019). At that point they're only paying $10M in luxury tax.

See: http://riveraveblues.com/2018/01/yankees-luxury-tax-yu-darvish-197-million-165175/
   3. Rally Posted: January 19, 2018 at 09:11 AM (#5609360)
They don't need to stay under any level - they can afford the tax if they want to. Just saying they are in position where they can field one of the best teams in the league, add one of the two best free agents on the market, and probably still stay under 200 million.

They have come a long way from where they were a few years back. In 2013 they spent 237 million on a team that missed the playoffs. They had a bunch of high priced contracts, but the only ones they would not have gladly given up were those of Cano and Kuroda. I wouldn't call Pettitte (12m) and Rivera (10) big contracts. Not earning their paychecks were Sabathia, Jeter, Wells (paid mostly by Angels), Tex, A-Rod, and Granderson.
   4. TDF didn't lie, he just didn't remember Posted: January 19, 2018 at 09:16 AM (#5609363)
I really can't see an argument for collusion. The salary rules are pretty clear, and the intent is clear - to keep salaries capped. If the Yankees and Dodgers want to stay under the limits, they don't need to "collude" with anyone, they just need to follow the rules.

IOW, it's not owners deciding among themselves to artificially cap FA compensation; it's individual owners deciding to avoid the penalties in place. And even if the owners got together and decided collectively to stay below the tax threshold, the MLBPA already gave them permission to do that by putting the thresholds and penalties in the CBA.
   5. You Know Nothing JT Snow (YR) Posted: January 19, 2018 at 09:50 AM (#5609383)
Pretty much even economic proposal from MLB and the ownership stooges for the last 30 years has, at its heart, had the exact same message: "Save us from making stupid decisions." It'd be nice if the ownerships could manage to just avoid their own stupid decisions of their own volition. Maybe that's what we're seeing here. It'd be nice if they could save themselves and not create artificial impingements to players receiving fair market bids.
   6. Nasty Nate Posted: January 19, 2018 at 09:59 AM (#5609388)
People have been focusing on next offseason's free agent bonanza. I have noticed, perhaps prematurely, that the following offseason could also have the signing of some mega deals. As far as I can tell, the possible free agents include Altuve, Arenado, Goldschmidt, and Sale.
   7. JRVJ Posted: January 19, 2018 at 10:12 AM (#5609393)
Jeff Passan just went on Effectively Wild and had a very good talk about this with Ben Lindbergh and Jeff Sullivan.

I don't entirely agree with Passan's starting point in the conversation (mainly because I don't quite buy the agreement that baseball clubs are a community asset held in trust by the owner(s) of the franchise), but I certainly think he's thought long and hard about all this.

I could see why MLBPA is very concerned about the current state of affairs, even though there are very few easy solutions to the current market (increasing the luxury tax thresholds would be a good way to let the Yankees and Dodgers of the world prime the market; another is putting a limit on how much a team can drop revenue from one year to another - that is, no more than 30% per year).

If I were MLB, I would actually throw a bone to MLBPA RIGHT NOW (something like increasing the minimum salary floor up to US$1,000,000 or increasing the luxury thresholds by US$10MM). It'd be a way to decrease the tensions between the two sides, even if the CBA is a couple years away from having to be renegotiated.....
   8. TDF didn't lie, he just didn't remember Posted: January 19, 2018 at 01:15 PM (#5609537)
Last year's top paid players (using USA Today's numbers) are kind of a mixed bag. Of the top-10:

Kershaw (5 bWAR), Greinke (6.3), and Verlander (6.3) clearly earned their money.
Lester (0.7) and Cabrera (-0.8) didn't earn their money, but did the year before. Both may have had an off year (Cabrera was hurt), but both are also of an age where players can decline suddenly. Lester has 3 years + an option left, Cabrera 6 + 2 options (only the 1st has a buyout).
Price (1.7) didn't earn his money, but he was hurt. But, he also didn't earn his $30M keep in '16 when he lead the majors in IP. He has 5 years left on his contract.
Sabathia (2.8) didn't earn his money, but he was in the last year of a LTC so you'd assume he was underpaid in earlier years. But, that 7/$142M contract was a disaster (10.1 bWAR total).
Pujols (-1.8) didn't earn his money. But we knew he wouldn't, barring a dead cat bounce. And he still has 4 years left on his contract.
Hernandez (0.8) didn't earn his money, and didn't the year before. He missed a lot of time over the past 2 seasons, but he looks to be in decline over the past 4 (4.7 -> 2.5 -> 0.2 (153 IP) -> 0.0 WAA). He has 2 seasons left on his deal.
Heyward (2.3) didn't earn his money, and didn't the year before because he's no longer a very good hitter. He still has 6 years left on his contract.

Of the overpaid players, Price (29), Heyward (26), and Hernandez (27) were relatively young when they signed their current contracts. Lester (31), Cabrera (33), Sabathia (31), and Pujols (32) were more usual age for FA contracts.

In all, there's a lot of potentially expensive awfulness left. It wouldn't surprise me at all if teams are trying to mitigate that a bit.
   9. snapper (history's 42nd greatest monster) Posted: January 19, 2018 at 01:57 PM (#5609603)
Sabathia (2.8) didn't earn his money, but he was in the last year of a LTC so you'd assume he was underpaid in earlier years. But, that 7/$142M contract was a disaster (10.1 bWAR total).

He has 17.6 WAR in his last 7 years.
   10. Fancy Crazy Town Banana Pants Handle Posted: January 19, 2018 at 02:15 PM (#5609625)
Sabathia (2.8) didn't earn his money, but he was in the last year of a LTC so you'd assume he was underpaid in earlier years. But, that 7/$142M contract was a disaster (10.1 bWAR total).

He has 17.6 WAR in his last 7 years.

It was a 5 year deal, with the 6th year a vesting option year, covering 2012-2016/17. His 7.5 WAR season in 2011 was part of his previous deal.

Details according to Cot's anyways.
   11. TDF didn't lie, he just didn't remember Posted: January 19, 2018 at 04:05 PM (#5609765)
Sabathia (2.8) didn't earn his money, but he was in the last year of a LTC so you'd assume he was underpaid in earlier years. But, that 7/$142M contract was a disaster (10.1 bWAR total).

He has 17.6 WAR in his last 7 years.

It was a 5 year deal, with the 6th year a vesting option year, covering 2012-2016/17.
Yep, I mistyped. 6/$142M.

   12. Walt Davis Posted: January 19, 2018 at 08:53 PM (#5609905)
I wouldn't consider them separate deals as CC never opted out. To convince him to stay, they extended the original deal by 1/$25 with the $25/5 vesting option. That makes it a 9/$211 deal in the end for which they received 28 bWAR. Looks fine to me. There is of course an alternate universe where the Yanks didn't try to convince him to stay and maybe he opts out and maybe the Yanks don't re-sign him when he does. There's also a universe where the Yanks convince him to stay for something less than what they offered.

So sure, in retrospect, the Yanks wouldn't have made the extension offer. Oddly enough, the way it worked out, the extension was better than if he didn't opt out. Cost them $50 M extra but those were two of his better seasons of the last 6. If he decided to stay without an extension, they'd have paid $92 M for just 4 bWAR. The extension gave them about 6 WAR for $50 M, perfectly OK return.

By the way, that shows why I wouldn't consider $142 M for 10 WAR to be a "disaster." $14/WAR is not good obviously but "disaster" is 4 WAR for $92 M, a result we see with some regularity. I suppose most of Prince Fielder's remaining contract is covered by insurance but, at face value, that was $214 for 7 WAR. Josh Hamilton was (I think) $125 M for 3 WAR. Hopefully not but there's a good chance that Miggy will be <10 WAR for $240. Crawford was something like 3 WAR for $140 M.

Compared to those, 10 WAR for $142 is a walk in the park. Heck, any long-term pitcher contract where the guy is healthy and sufficiently ML quality to pitch in all but one season is almost by definition not a disaster.

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