The Illusory Specter of Free Agency

For decades, the very thought of free agency sent the baseball world–or at least the ownership-aligned factions of the baseball world–into a frenzied panic. Even if such a drastic change to the financial rules wouldn’t leave the league bankrupt, surely it would create a world of haves versus have-nots, in which small-market teams could neither hold onto their stars nor compete for championships and in which title hopes would belong only to dynastic large-market squads.

My favorite example remains this now-absurd rant from Detroit Hall of Fame sportswriter Jerry Green, writing in a 1979 season preview magazine, Petersen’s Professional Baseball Yearbook. Green wrote about the evils of free agency, expressed primarily through what he sold as the arrogance of newly rich black players like Reggie Jackson and Rod Carew, and concluded:

So the money violence will continue with these projections.

1. There will be a million dollar a year outfielder in the major
leagues by 1980.

2. A club will not be able to make it and will go under because of
bankruptcy.

3. The loyal fans will have to foot the bill—and then watch
disgruntedly as their favorite player greedily strips off the home
uniform, tears up his roots and goes to the highest bidder.

4. Only the Arabs and Japanese will be able to afford to own a
major league baseball franchise.

There is more going on here than just economic anxiety. Nonetheless, I think it gets across the attitude that many baseball insiders had toward free agency: It was going to tear the game apart, and those considered the have-nots of the baseball world by institutionalists like Green  — “poor” small-market owners and their fans–would be the ones who would suffer most. That same ideology has defined Major League Baseball’s approach to financial rules since Bud Selig took over as commissioner in 1992. He and his coalition of small-market owners have made it their goal to reverse the perceived imbalance created by free agency.

All of this depends on an idea that most baseball fans assume to be true: The infusion of money allowed by free agency created an environment in which rich teams like the Yankees could throw their weight around, and in which no amount of intelligence or moxie or grit could power a small-market team past those wielding the Almighty Dollar.

But in reality? The period following the decimation of the reserve clause featured the most parity major league baseball has ever seen. From 1979 through 1993, the last year before the strike and the beginning of the divisional era (and, as I will argue, the era of the dominant small-market ideology), the World Series saw 18 different challengers over 15 seasons, with no teams making it more than thrice. Only nine teams made multiple fall classics —Oakland, Philadelphia and St. Louis appeared thrice, while Atlanta, Baltimore, Kansas City, the Los Angeles Dodgers, Minnesota and Toronto made two. Note that those Yankees, the supposed beneficiaries of free agency, made the Fall Classic just once. They reached the World Series during the strike-shortened 1981 campaign and lost 4-2 to the Dodgers.

What I find most interesting about this list is that these squads, aside from the Cardinals and Dodgers, are far from standbys in baseball’s postseason. Toronto, Baltimore, Oakland and Minnesota have not made a World Series since (and, amazingly, 2017 marked Los Angeles’ first appearance since then as well; thanks, Frank McCourt!). The Royals didn’t make one until 2014, and the Phillies until 2008. These squads weren’t exactly powers in the days before free agency either. The Athletics had their dynasty in the early 1970s, and Baltimore had great teams in 1969 and 1970, but as a group, these are neither the traditional powers of the baseball world nor its economic titans.

Consider the Athletics. Oakland was supposed to be a prime example of a baseball market set to be ravaged by free agency. Jerry Green cited the Athletics and owner Charlie Finley in his rant against the practice:

The champions Charlie Finley once owned in Oakland have been scattered to the winds on windfalls of money. The old A’s used to call Charlie cheap and it was one of the nicest things they said about him. Reggie and Catfish are with Steinbrenner; Rollie Fingers and Gene Tenace are with Ray Kroc, the hamburger magnate, in San Diego. Joe Rudi is with Gene Autry in California. Bert Campaneris is with Brad Corbett in Texas.

But even ignoring that Finley’s free agents were spread to all sorts of teams, from the Yankees to the Padres and Rangers, this is a misrepresentation of the situation. Finley essentially decided to take his ball and go home after the reserve clause was struck down. After years of middling to above-average payrolls, 1979 marked the first year Finley’s Athletics would field the lowest payroll in the league. At $1,030,500 total, an average of $41,220 per player, the 1979 Athletics had a total salary just 60 percent that of the next cheapest club, the Seattle Mariners in their third year of existence.

The A’s would be major league baseball’s cheapest team until 1981, the year after Finley sold the team to Walter A. Haas Jr. Their early plays in free agency did not work out so well. The 1982 Athletics went 68-94 despite a seventh-ranked payroll, as free agent bids for aging players like Joe Rudi, Dave McKay and John D’Acquisto brought meager returns. But in 1986, the Athletics snapped up Dave Stewart, who had been released by the Phillies after struggling to return from elbow surgery. Just under two years later, Oakland signed Dave Henderson to become their center fielder.

Over the next two seasons, the two free agent Daves would become the centerpieces of their respective halves of the team. The Athletics then reacquired Rickey Henderson at the tail end of his contract with the Yankees in 1989 and signed him to a big contract the next offseason. The outfielding Hendersons led Athletics position players over their consecutive American League Championship campaigns from 1988 through 1990; Dave racked up 15.0 WAR over three seasons, and Rickey needed just a season and a half to compile 15.4 WAR, including his brilliant MVP 1990 campaign in which he hit .324/.439/.577, smacked 28 home runs and stole 65 bases. Stewart’s 13.2 WAR on the mound dwarfed the club’s next top contributor, Bob Welch. The Athletics wouldn’t have become a dynasty without homegrown heroes like Jose Canseco and Mark McGwire, but free agency was pivotal in pushing that franchise over the top.

But the true success of free agency is that it did not reward only those teams that attempted to build through big pickups like Henderson or Stewart. Consider the Phillies, an organization that spent the 1980s sticking hard to its internal scouting philosophy while the major leagues drifted toward relying on a central scouting bureau. The Phillies made a couple of major free agent market plays in the late 1970s to try to push the squad that lost in consecutive NLCSes, with varying success: Tug McGraw was fantastic in 1980 to help push the Phillies to the World Series, as he recorded 20 saves and a brilliant 1.46 ERA (260 ERA+) over 92.1 innings of high-leverage relief. Pete Rose, though, was aggressively mediocre, having only one truly good season for the Phillies.

But the early 1980s Phillies were mostly built from within. Mike Schmidt was a second-round draft pick in 1971 and had been on the major league club for seven full seasons before earning his first MVP during the 1980 World Series campaign with a .268/.380/.624 batting line and a career high 48 home runs. Steve Carlton had his best season in nearly a decade that year as well, as he compiled a 2.34 ERA and 286 strikeouts over 304 innings pitched (the latter two totals led the major leagues).

Carlton was acquired in a trade from the Cardinals but is still an example of the rewards the Phillies reaped from their strong farm system. The Phillies picked him up in exchange for Rick Wise, who posted a 2.88 ERA and made the All-Star team at just 25 years old in 1971. Wise was signed by the Phillies as a teenager in 1964, one year before the implementation of the draft. His talent was enough to entice the Cardinals to make a youth-for-age trade with the Phillies, but it was one St. Louisians would come to regret. Wise made just one All-Star game for the Cardinals (1973) compared to the seven Carlton made with the Phillies, including four Cy Young Awards.

When those Cardinals won their first pennant of the decade in 1982, the team featured just seven players over the age of 30. The team also, not coincidentally, featured just three free agents, the only one of note being Darrell Porter (.231/.347/.402, 109 OPS+ in 120 games at catcher). The team’s best players —first baseman Keith Hernandez, shorstop Ozzie Smith, left fielder Lonnie Smith and ace starter Joaquin Andujar —were all between ages 26 and 29.

St. Louis couldn’t keep that core together. Hernandez went to the Mets in a trade before the 1983 season for pitcher Neil Allen and Rick Ownbey, two little-known players who combined to make well over half a million dollars less than Hernandez. As Lonnie Smith approached free agency in 1985, he was dealt to the Royals —St. Louis’s eventual World Series foe —in a deal for outfielder and 1982 first-round pick John Morris, who never panned out in the majors.

And yet, despite these losses, the Cardinals were able to maintain the competitive advantage that had made them a power in the pre-draft days. Their ability to scout and identify the best talent never went away. Whether it was graduating these players from draft day to the majors or using their wealth of young talent to fill holes via big trades, the Cardinals were able to be one of the best teams of the decade despite failing to make a single free agent impact move on the level of a Henderson or a McGraw.

By 1985, center fielder Willie McGee had matured into one of the best gap-to-gap hitters in the league. They graduated players like speed demon Vince Coleman and outfielder Andy Van Slyke to form a stellar outfield composed of three players aged 26 or younger. The oldest man in the lineup was Ozzie Smith, then 30. But then, in 1987, they were able to win in large part because they cashed out that farm system for some great players on expensive contracts. St. Louis’s biggest such acquisition was their plucking of Jack Clark from the Giants for four prospects. Clark went on to post a .286/.459/.597 batting line with 35 home runs to anchor the lineup in 1987.

Both the Phillies and the Cardinals stand in stark contrast to the idea that free agency would require teams to build from their bank accounts rather than their farm systems. Their limited use of the free agent markets was mostly to patch up holes and extend the windows created by their fantastic player development work. But because it often requires a long commitment to sign good players off the free agent market —even those entering the decline phase of their careers —turnover at the top of the standings became much more common than in the preceding 15-year period.

The pre-free agency period in baseball was characterized by dynasties. The cause was not payrolls, of course, as the reserve clause fixed player costs well below market value across the board. But rather, the teams that could afford to run the biggest and most robust farm systems were able to hoard talent before it ever had a chance to reach the major leagues. Credit Branch Rickey for implementing the chain store model with the St. Louis Cardinals, who used his chain store minor league model to reach nine World Series between 1926 and 1946. Meanwhile, free agency never stopped the Yankees from buying players whenever their lineup had a hole, as they won the pennant more often than not from 1921 through 1964.

In a 1946 issue of Baseball Magazine, Owen Bush, an executive for the Triple-A Indianapolis Indians, said many in baseball had recognized this problem with the farm model. “It wasn’t very long ago that farming was vigorously opposed by many officials, among them Judge Landis,” Bush said. “It was maintained by some that an organization such as the Cardinals and, later, the Yankees, held back certain players who should have been playing regularly in the majors, but who couldn’t because there wasn’t room for them on their parent clubs; and the clubs refused to sell them to needy rivals.”

But by then, the tide had turned. Fully independent minor leagues and even independent teams were on their way out. “Today,” Bush continues, “every sound head in the game realizes that a universal chain store system will work to the advantage of all concerned, including the player. Even most of the independent minor league owners are being won over to the farming idea, because they have been shown in dollars and cents that it is very difficult—many times impossible, to buck farm organization teams in their own leagues and continue to exist.”

The idea of the minor league farm system as good for the player is ludicrous and exposed easily by simply looking at one of the multiple lawsuits currently filed challenging its structure. Minor leaguers make less than the federal minimum wage for their work, are not paid for spring training work, and are subject to disgraceful working conditions.

But I think it’s worth pointing out how bad this arrangement is for the fans, too. Live outside one of the 30 designated major league markets and want to watch a local team play for a competitive championship? Too bad —especially for those poor denizens of Las Vegas and Iowa who find themselves blacked out from a whopping six teams each on MLB.TV to boot. Want to see the game’s best players in a pennant race from wire to wire? Too bad  — MLB’s contract structure ensures it is optimal for major league squads to stash their best young players in the minor leagues for as long as they can.

Free agency presented the same problem owners had run into decades earlier when the amateur talent market was open and free–they needed to be protected from their own greed. The owners continued to proclaim the competition of an open market would inevitably lead to higher and higher prices and, eventually, the bankruptcy of the league. Instead, the 1980s saw some of the fastest franchise value growth in league history. This period was far from perfect —look no further than the massive collusion of the late 1980s. But the way free agency promoted player movement, forced teams to pay to keep the talent they desired, and made other players available to teams across the league helped create an environment with more parity than we have ever seen.

Even though the owners failed to win a salary cap in the negotiations following the 1994 strike, with Bud Selig and his coalition of small-market bosses in charge, the new CBA and every subsequent agreement began to whittle away at whatever openly competitive markets remained for the acquisition of baseball talent. Beginning with the 1997 Collective Bargaining Agreement, the first new one reached after the strike, we saw the introduction of the luxury tax —a “soft” salary cap  —spending caps on amateur talent both overseas and in the draft, and the implementation of strict compensation penalties for signing top free agents. One by one, the owners closed up every competitive market a rogue team could find to quickly acquire talent to build a competitive advantage and rise to the top.

Notably, some small-market teams have managed to break through since then. The Royals won two pennants and a World Series in 2014 and 2015; the Astros (a mid-market team, truthfully) won their first World Series this fall; the Marlins won in 1997 and 2003. The Rays won the American League in 2008 as well, with one of the league’s lowest payrolls. But every single one of these teams had to execute a complete teardown before winning these titles (we could argue the Royals didn’t do it intentionally, but they lost their way to top-five draft picks seven times between 2003 and 2012). Perhaps the Astros can keep this team together, but neither the Rays, Royals or Marlins could sustain their success before having to tear it down and try again.

Since the strike, the Yankees have won seven American League pennants and the Red Sox have won three; in the senior circuit, the Giants and Cardinals have combined to win eight of the 23 league championships. Twelve teams have made multiple World Series, while nine haven’t made it at all. While I don’t think there is enough evidence available to make the claim that new rules have hurt parity, I think it’s clear they haven’t created the small-market utopia Selig and his cronies promised.

What’s worse, though, is that the new rules restrict the options small-market teams can use to drag themselves out of the dreaded cycle of mediocrity. Spending over slot values to entice high-risk, high-reward talent to skip college and enter a farm system at a young age? Against the rules. Making huge investments on overseas talent? Also —unless you’re the Yankees and can afford to pay the millions in fees and penalties —against the rules. Spending on top-level free agents? Not unless you want to kiss your first-round draft pick goodbye. Acquiring free agents-to-be to stock up on compensatory picks when large-market teams snatch them up? Not unless you can take the hit when one of them accepts the bank-breaking qualifying offer.

Now, the road to the top for struggling franchises is clear. Clear the deck, prepare for a few years of losing, and hope that wave of prospects from the resulting draft picks (and richer draft bonus pool) opens up a window of contention. Avoid frivolous spending on players who might be good in the present and instead acquire assets to prepare for the future. And then hope upon hope that come the postseason you find that, unlike Billy Beane, your sh*t works in the playoffs.

That’s fine for owners who want a guarantee their teams will make a profit. But every time you have to forfeit three or four years to restock for the future, that’s three or four years worth of fans you’re losing who won’t come back to baseball for the rest of their lives. I think tanking is cynical and anti-competitive, but by far its worst offense is that it is insufferably boring. So much of what drove my almost religious adulation for baseball as a kid was the air of importance that surrounded the game. Of course, my view of the game has grown with age, but in my mind the complete lack of stakes has made some regular season games —even in April, when you’re supposed to believe anything is possible —hard to watch.

Flags fly forever. It’s now impossible to argue with the strategy’s ability to fetch a ring after the successes enjoyed by the Royals, Marlins and Astros, and even the Cubs to a certain extent. But I would like to be able to watch baseball again without every season turning into a new lesson in austerity and proper asset management. We get enough of that in the real world, and it’s frankly depressing how deeply it has pervaded baseball.

This small-market golden age from the late 1970s through the early 1990s was hardly perfect. This was the age of collusion and cocaine scandals, after all. But the freedom of that era gave fans a reason to hope, a reason to believe they could be just that one player away from making the leap, that your team’s fortunes could turn with just one signature on that dotted line. Today’s path to the top starts with the fire sale, an act that could not be more devoid of hopefulness. Is it better than the dreaded cycles of mediocrity these teams are so desperately trying to avoid? I would ask in response: Is this really, in something we watch for entertainment, a question we should be reduced to asking ourselves?

The fear of free agency, one that originated in the owner’s box and has been projected onto baseball’s fanbase at large for the past four decades, is what has brought us here. Over the past 22 years, though, we have seen nothing that suggests the playing field has balanced for small-market teams. While teams like the Dodgers, Giants, Yankees and Red Sox have been able to consistently reload and retool without avoiding significant losing stretches, small-market teams still find themselves forced to endure years-long stints in the cellar before the can accrue the resources to compete again.

Competitive imbalance is an unavoidable fact of the business of baseball as long as the game is played in such vastly different markets as Milwaukee and New York or Los Angeles and Cincinnati. But no era has given us more parity than the era of early free agency. The competition for players forced large-market squads to spend themselves dry for top talent, allowing smaller teams to capitalize on areas left behind. Now, Moneyball isn’t just for the Athletics and the Rays. It’s for the Dodgers and Red Sox, too, and it’s not like their financial advantages are going anywhere in the era of the multi-billion dollar television deal.

The spectre of free agency was a lie from the very beginning. It was a talking point designed by the owners to curry favor from the fans during periods of labor strife and a way to paint players as the greedy ones. It’s unfortunate this lie has held such power over the decision-makers of major league baseball for so long. This year’s World Series is proof that baseball can still provide some of the liveliest games and most thrilling experience in sports. But the ideology of austerity promoted by small-market owners and the financial structure they have created has taken some of the shine off the game. I believe hope is at the heart of fandom, but in this baseball world, powered by greed, I find it slowly but surely getting harder than it used to be to find that hope.

References & Resources

• Petersen’s Professional Baseball Yearbook, 1979
• Baseball Chronology for historical payrolls
• Baseball Magazine, July 1946