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  1. I hate linking to the angry old blogger, but Murray Chass had an interesting column today.

    Boras, who doesn’t let any baseball financial aspect escape him, has made a study of payrolls and has found, he said, that most teams have lower payrolls five weeks before spring training than their highest opening-day payrolls since the 2000 season.

    “Only about five teams have higher payrolls,” the agent said. “Everybody else is below even though revenue is up by 200 percent and the value of franchises is up 300, 400 percent. What we’re seeing is not many teams are spending on payrolls despite the fact that their profits are extraordinary.

    When the qualifying offer is set at $13M, it seems strange that the very best pitchers in the league can’t get more than $25M. I sense that the factors that have led to that $25M ceiling are about to disappear and it will be shattered. First, substantial increases in revenue sharing from the TV deal are going to start flowing to every club in the next few years. Second, that’s quite a troika of young talented pitchers, it takes the best being available as free agents to set the highest contract values, and the best pitchers have rarely made it to free agency. I’l bet one of the three will make it, and that they’ll blast through that $25M a year barrier with ease.

    It seems ludicrous that Boras told Weaver to pass on a guaranteed $85M, but Boras knows the market and he knows what the sports are and will be. Most of all, he knows that most of those revenues will flow to MLB clients over time, and that owners can try to control themselves, but will eventually fail. There are too many factors that subvert self control, the business case to improve the product, sell more tickets, gain higher TV ratings, and get playoff revenues, but also the risk of suffering disdain and ridicule for fielding that loser whenever you go out to dinner and the ego that wants to win a championship and also revel in the corresponding adulation you now receive on any night out among the fans.

    Comment by ValueArb — January 14, 2013 @ 1:51 pm

  2. I agree with ValueArb. I think 2015 is the year we see free agent contracts taken to the next level.

    I think all three teams would already have extensions signed if the players were willing to settle for the contracts you suggest.

    I think Kershaw is going to blow by $200M as a FA.

    Comment by Jobu — January 14, 2013 @ 1:59 pm

  3. if his arm holds up

    Comment by Tomcat — January 14, 2013 @ 2:18 pm

  4. I’ll take the under on that, thanks. He might reach that level, but betting on any single player two years out is perilous to say the least.

    But I agree that the status quo is an unstable equilibrium. Either salaries are going to jump meaningfully or teams are going to be discovered to have been colluding to keep them down.

    Comment by mcbrown — January 14, 2013 @ 2:18 pm

  5. Before the 1998 season, Pedro Martinez signed a 6-year contract for $75 million (with a year to go to free agency, I believe). In proportion to the average MLB salary, that’s the equivalent of $180 million plus today. Nobody’s getting $30 million AAV now, certainly not long-term; so maybe the top of the pay scale has leveled off. (That contract worked out fine for the team, BTW.)

    Comment by Mr Punch — January 14, 2013 @ 2:35 pm

  6. Signing ANY pitcher to a longterm contract (5+ years) is just kinda nuts any way you look at it.

    Brandon Webb would have warranted a bigtime contract after 2008……and has one MLB appearance since then.

    Any lengthy contract for Lincecum a year would look pretty awful right now.

    Jon Lester is another guy who is starting to downtrend.

    What about guys like Gooden, Saberhagen. Imagine what Gooden would have gotten if he were playing in this era? He might have earned some of his contract, but ultimately would have been a disappointment.

    Even the 3 studs mentioned above carry big risk. As durable as they have been and as great as they are, they are poor bets to earn any longterm contract.

    Comment by Steve — January 14, 2013 @ 2:43 pm

  7. It’s just insane how much money is in this game.

    Comment by Eminor3rd — January 14, 2013 @ 2:51 pm

  8. i think its important to note that salaries are increasing, but so is the total amount of money available; $/WAR isn’t going to be the same thing in the next few years that we currently understand it as

    Comment by jim — January 14, 2013 @ 3:31 pm

  9. If Kershaw avoids any arm injuries before free agency, he will sign for over $200 million. There have clearly been pitchers in MLB’s history worth that kind of contract(Maddux in his prime, Pedro in his prime, etc.) and if you really believe in your medical staff to properly evaluate a pitcher’s future health, it’s a risk worth taking.

    Where teams go wrong is when they sign declining pitchers like Zito to a mega-deal.

    Comment by Phantom Stranger — January 14, 2013 @ 3:32 pm

  10. why do you assume that those players would have experienced the same future if it were re-done?

    Comment by jim — January 14, 2013 @ 3:33 pm

  11. We’re not redoing their careers.

    Just noting that had those players been awarded long expensive extensions, things would not have gone so well. Now, you could say that about anyone or anything in hindsight, but the point is that several of those players were regarded similarly to the three the article focuses on. Young star pitchers who look like they are worth the money.

    The vast majority of longterm contracts given to players have not ended well for those teams. Granted, many of players were older and had talent that was more questionable, but there’s too much variance given what can happen to a player’s health and skill.

    Comment by Steve — January 14, 2013 @ 3:59 pm

  12. Also remember that the post-2014 postseason should see an absolute explosion of free agent spending by the Yankees, which should kind of raise all boats.

    Comment by Jim — January 14, 2013 @ 4:05 pm

  13. Kershaw deserves over $200 million considering what he has done so far at his age. Few have been this good this young!

    Comment by kiss my GO NATS — January 14, 2013 @ 4:29 pm

  14. If one of them has to be made to free agency, I think I know which one it would be.

    Comment by Bip — January 14, 2013 @ 4:33 pm

  15. “Deserves” doesn’t enter into it. It’s all about what he should be expected to do. History has shown convincingly that it is not wise to expect pitchers to stay healthy or maintain their peak performance.

    I wonder though if Kershaw will get a slight bonus for the small probability he might actually improve between now and his age 27-30 seasons.

    Comment by Bip — January 14, 2013 @ 4:38 pm

  16. But there are also quite a few good extensions that have been signed. King Felix and Verlander are a couple of good examples of that. Also Pedro, Maddux, etc.

    I don’t think you can really say that signing any pitcher to a long term contract is nuts. It’s just risky. It can pay off really big, or it can be a big bust.

    Comment by JayT — January 14, 2013 @ 5:21 pm

  17. Boras’ incentives are also different than his clients. He has multiple income sources, so if he fails to make a great deal he’s fine.

    A player (especially a pitcher) could get hurt and having a less large payday would benefit them most.

    Comment by Travis L — January 14, 2013 @ 7:28 pm

  18. This is one of many reasons why the Rays locked up Longoria and not Price. “Buy bats, grow arms” is the motto of several front offices. Boras’ claim has some merit, but honestly a large free agent contract is only marginally less risky than rolling the dice on a group of young and cheap prospects.

    “You can always recover from the player you didn’t sign, but you’ll never recover from that one bad contract.” Anyone else remember this quote?

    Comment by Brian — January 14, 2013 @ 8:32 pm

  19. So with about a month left before Spring Training, with deals yet to be made, 17% of the teams in baseball have their highest payrolls ever?

    Comment by Nathaniel Dawson — January 14, 2013 @ 9:09 pm

  20. Perhaps those boats will be weighed down whence the Dodgers spending spree grinds to a halt. This year, the Dodgers are the new Yankees, but how long can they keep that up?

    Comment by Nathaniel Dawson — January 14, 2013 @ 9:12 pm

  21. Felix and Verlander were younger when they got their deals than the current versions of Felix and Verlander….

    Age is a HUGE factor here. If the Dodgers had signed Kershaw to an Evan Longoria type deal or something to that effect years ago, then obviously yes that would have worked out. Now he’s got wear and tear and you just don’t know what’s going to happen. It could all be over just like that.

    For every Maddux there’s a Matt Morris or Mark Mulder. You could argue those are lesser pitchers, sure.

    Look what happened to Oswalt. Guy was an absolute horse year in, year out. Now he’s struggling to play half seasons.

    Imagine giving Jason Schmidt a 6 year deal after his stellar 2003 or 2004.

    Still not good enough?

    Look no further than Johann Santana…..can we end the discussion now?

    Comment by Steve — January 15, 2013 @ 12:46 am

  22. The new media money has already affected the market and a lot more is in the pipeline. The $20MM AAV pitcher now is going to $25MM+ from here on out and after next season or two will be near $30MM AAV unless the give a little to stay put.

    Comment by maqman — January 15, 2013 @ 8:54 am

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