Time & Money

A common discussion point this off-season is the length of dollar amount of the contracts handed out during free agency. Given the unfortunate economic climate, naturally interest is high in the amount of dollars and years agreed upon by teams and players alike. Underneath you’ll find three scatter plots that cover each of the past three off-seasons. Thanks to ESPN’s free agent tracker I’ve compiled every major league contract agreed to during the off-season and plotted them based on length and value.



If it looks like MLB teams have became more hesitant to sign players to 5-plus year contracts, it’s because they have. In 2006, teams combined for six deals of 5-years length, only three have been given out since. There have been six 5+ year contracts over the last two years, and 10 in 2006. Obviously, this assumes the amount of players worthy of 5+ year deals has remained consistent, something we can check thanks to our Win Value metric.

Looking at purely the “contract” year value is misleading, so we’re going to include an average of their three year data as well.

There are a few extension/re-signing types (the Yankees class of 2007) but otherwise you should notice the abundance of class of ‘08s within the top 10 most valuable free agents. That eradicates the idea that 2008 had a weaker free agent class, and raises the question: why have teams withheld longer contracts recently? Is this a sign of smarter spending, or simply a coincidence?

In 2006, teams gave out 57 years and 785M to those top 10 free agents. Those numbers dropped to 43 years and 726M in 2007, and 43 years and 700M in 2008. Yet that’s counterintuitive, given we know that teams were paying roughly 3.7M per win in 2006, 4.1M per win in 2007, and 4.5M per win in 2008. It would appear that teams are no longer overspending on players like Jeff Suppan.

Whether it means signing shorter term deals or simply paying market worth it’s obvious that teams have at least gotten a bit more efficient in the usage of their free agent dollars.,