Sports

MLB Free Agency Is in Overdrive. What Does That Tell Us About the Negotiations to Come?

Max Scherzer is going to be a New York Met. After weeks of false starts and dead ends, owner Steve Cohen and general manager Billy Eppler have signed one of the top free agents in this year’s class, and they did it in exactly the way the billionaire investment banker promised: They made the three-time Cy Young award winner an outrageously lucrative offer. While other suitors reportedly demurred at committing to the 37-year-old for more than two seasons, New York gave Scherzer three years and $130 million, with a player opt-out after the second season. That eye-watering sum is so humongous that it hits the same visceral notes as a child’s description of a brachiosaurus. More concretely, it resets the top of the free agent market, with its $43.3 million average annual value absolutely atomizing the previous record AAV, Gerrit Cole’s $36 million.

But wait, there’s more. Scherzer’s contract was merely an exclamation point on MLB’s busiest weekend since the trade deadline. On Friday, the Mets agreed to terms with free agent infielder Eduardo Escobar as well as outfielders Mark Canha and Starling Marte, promising nearly $125 million in total money between them. New York’s roster now has an outfield (Canha, Marte, and Brandon Nimmo) that might leave something to be desired in center field defensively, but should make up for it with exceptional on-base percentage.

And one of the motivating factors for Cohen to write a blank check for Scherzer was a flurry of free-agent activity elsewhere. On Sunday, starting pitcher Kevin Gausman signed with Toronto for five years and $110 million; Jon Gray escaped Colorado by inking a four-year, $56 million deal with the Rangers. On Tuesday, Steven Matz agreed to a four-year, $44 million deal with the St. Louis Cardinals in a move that drew Cohen’s public ire. These signings blocked the Mets’ previously stated fallback rotation options, and may have provided the final push that got the Scherzer deal over the line.

Shortly before the Gray deal broke, the Rangers—a team that arguably had zero above-average big league players on Sunday morning—took the first bite out of the superstar shortstop market, enticing Marcus Semien with a seven-year contract worth $175 million. And Texas might not be done yet. According to Evan Grant of The Dallas Morning News, Semien would be willing to continue playing at second base should Texas lavish another nine-figure contract on, say, Trevor Story or Corey Seager. The Rangers are reportedly in the mix for both.

All weekend, baseball’s news ticker buzzed furiously with reports of new signings. Hector Neris to Houston: two years and $17 million. Corey Kluber to Tampa Bay: one year, $8 million, with another $5 million in possible incentives. Michael Lorenzen to the Angels, who are apparently trying to corner the market on two-way players: a one-year deal worth $7 million.

Some players didn’t even have to change teams to strike it rich. The Twins and Byron Buxton finally resolved the hitherto irresolvable question of how to pay an outfielder who’s averaged just 54 games a season over the past four years but has been one of the best players in the league when healthy. The solution: a seven-year contract worth $100 million guaranteed, with a further $73.5 million available in bonuses based on playing time and placement in MVP voting.

Even the Marlins—the broke-ass Marlins, who usually don’t even bother to peddle the we came in second on this free agent line to reporters because nobody would believe them—got in on the act. Pitcher Sandy Alcantara signed a five-year, $56 million contract extension with an option for a sixth season. Miami also agreed to give outfielder Avisaíl García $53 million over the next four years to be Adam Duvall, only fast.

Many of the most sought-after free agents in this class remain unsigned: Seager, Carlos Correa, Robbie Ray, Freddie Freeman, and—somewhat disconcertingly—Clayton Kershaw. But this weekend still seemed like a cross between the first night of NBA free agency and the 10 minutes before last call at a college bar. We don’t have stretches like this in baseball very often. By the time Scherzer signed with the Mets on Monday, the curiosity coming out of an unusually busy MLB Thanksgiving weekend had turned into a bacchanalian delirium, with money flying around in eight-figure parcels and franchises charting new courses.

It felt like the party at the end of the world, and for good reason. Eat, drink, and sign long-term deals. For come Thursday, there’s going to be a lockout.

No sport shies away from work stoppages like baseball, which has not had a climactic confrontation between labor and capital since 1994, when the World Series was called off amid a players’ strike. For 26 years, the sport has enjoyed labor peace; for the past 19, hardly anyone has come close to breaking that.

Barring some unforeseeable last-minute twist, however, that streak will end at 11:59 p.m. ET on December 1. And far from the impending economic freeze discouraging transactions, teams and players have all but climbed over the furniture to hammer out their economic futures before the sport shuts down indefinitely.

Lockout is a scary term in sports. It cost the NBA 32 games in 1999 and 16 in 2011. It cost the NHL half seasons in 1995 and 2012, and laid waste to an entire year’s worth of games in 2004 and 2005, rewriting the rules of the league both on the ice and off in an attempt to save it from insolvency. The prospect of a similar scenario is terrifying for both the players and for MLB. Billions of dollars are at stake, not just in terms of who gets how much of the pie, but in terms of getting that pie in the oven in time to be ready for Opening Day.

Yet over the past 19 years the league and its owners have nickel-and-dimed the players by finding loopholes and new angles to exploit the letter of the law. Take the egregious proportions through which teams have manipulated service time. In February, then-Mariners CEO Kevin Mather admitted that the franchise had left its top prospects out of its major league player pool specifically to avoid having them move closer to free agency. “[T]here was no chance you were going to see these young players at T-Mobile Park,” Mather said. “We weren’t going to put them on the 40-man roster. We weren’t going to start the service-time clock. … The risk paid off.” Or take The Athletic’s 2019 report detailing how delegates from every MLB team at an annual arbitration symposium award a championship belt to the “team that did the most to keep salaries down.” The MLBPA isn’t backing down from a potential work stoppage entering 2022, because for the first time in a generation peace could be costlier than war.

It seems paradoxical that such animus between players and owners could coexist with this recent flood of activity, particularly when the two biggest names to sign over the past few days—Scherzer and Semien—both sit on the eight-player MLBPA executive subcommittee. But there are two ways of looking at the sudden deluge of activity.

The first is that players are signing long-term contracts now specifically because they fear a lockout will drag on for months. If a work stoppage stretches into the season, player salaries will freeze, but signing bonuses and deferred money will be paid out on schedule; NHL players got wise to this after three lockouts, and now it’s common for stars to lockout-proof their contracts by taking as much as 90 percent of their pay in bonuses. Even if the bonuses in some of the newly minted MLB deals are a relatively small percentage of the total contracts—Buxton’s is $1 million; Alcantara’s is $1.5 million—that money would help tide players over until action starts back up. That’s to say nothing of the peace of mind that comes with an eight- or nine-figure contract; it’s much more palatable to miss a few paychecks when you know $50 million is coming down the pipeline.

The other is that the players and teams agreeing to these deals would prefer to operate on known terms rather than wait through a lockout that might introduce variables that are unforeseeable. Maybe the lockout will end in January with something close to status quo ante bellum, or maybe something will happen—either in economic laws of the game or in the timing and financial state of the sport—that throws the whole system into chaos. Maybe someone like Gausman could’ve been had for pennies after a lockout that throws the sport into financial turmoil and craters the free agent market; on the other hand, maybe the players are en route to a decisive victory that will force all 30 teams to spend competitively, and Gausman will miss out on tens of millions of dollars in a healthier market. Both sides opted to take the sure thing now and mitigate the risk, one Blue Jay in hand being worth two in the bush and all.

Perhaps this explains why Rays wunderkind shortstop Wander Franco signed a record-setting deal just a few days before a work stoppage in which the primary issues are the very factors that depress his salary. Heading into a lockout with that level of uncertainty would be more in character for BASE jumpers than baseball players.

Two weeks ago, MLB commissioner Rob Manfred made some comments at the owners’ meetings in Chicago that both summed up how the league views the expiration of the current CBA and generated some pessimistic headlines. “I can’t believe there’s a single fan in the world who doesn’t understand that an offseason lockout that moves the process forward is different than a labor dispute that costs games,” he said.

Manfred’s point might be unpopular, but it’s not only correct, it’s the entire proverbial ballgame at this point. Just as this avalanche of free agent deals came down as agents and GMs tried to beat the clock on a lockout, labor negotiations hinge on deadlines. And until and unless the would-be lockout threatens to change the schedule, there might not be enough pressure for the two sides to compromise. The real deadline isn’t Wednesday night; it’s some to-be-determined date in February or March by which spring training has to start if the league is going to get in 162 regular-season games.

When a labor negotiation stalls out, workers can gain leverage by striking at disadvantageous times for their employer. That’s why MLB would choose to lock the players out now, rather than continue without a CBA and risk giving the players the ability to strike during the season. Manfred said as much at the owners’ meetings.

“I think when you look at other sports, the pattern has become to control the timing of the labor dispute and try to minimize the prospect of actual disruption of the season,” he said. “That’s what it’s about: It’s avoiding doing damage to the season.”

For MLB, the biggest priority will be avoiding an extended work stoppage that could threaten the playoffs. In 2020, while the league and union were negotiating a return to the field at the peak of the pandemic, the MLBPA proposed playing as many as 89 games per team, with players paid on the pro rata scale agreed to when baseball activity shut down in March. The owners, aware that a nearly $800 million windfall in national postseason TV money was coming no matter how long the season lasted, countered by proposing to play more than 60 games only if the players agreed to take a pay cut. Ultimately, the two sides weren’t able to find common ground, and MLB imposed a 60-game season with prorated salaries.

The gains that made the MLBPA the most powerful union in sports were earned through midseason strikes in 1972, 1981, 1985, and 1994, and the threat of another August strike in 2002. Absent that leverage, negotiations can drag on, as Manfred intimated, until spring. Only then will we be able to more clearly assess the wisdom of this week’s flurry of signings—and only then will we know whether this lockout is merely a spicier form of a negotiation extension or a potential sporting cataclysm.

The big wave of transactions over the past few days not only added to the uncertainty heading into Thursday; it laid plain the gigantic sums of money everyone—players and owners alike—stands to make by playing baseball. Why risk it all with a labor war when peacetime brings such prosperity?


Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button