Remaining Unsigned Free Agents Are Running Out of Time

With business closed on Friday, March 2nd as I write this, it’s safe to say that the remaining unsigned free agents this off-season are running out of time.  Veteran MLB players know how to get themselves in shape and don’t necessarily need six weeks of Spring Training.  Even so, MLB teams have now played between 6 and 9 Spring Training games each, and another week of missed games is reasonably likely to impact the performances of many of the remaining unsigned free agents in the 2018 regular season.

Add also the fact that at this point the vast majority of MLB teams have spent what they are willing to spend in 2018, at least unless a deal too good to pass up comes along.  The players who haven’t signed at this point are all players who at the start of this free agency period thought they were worth a lot more than the teams thought they were.  Neither side has blinked so far, but in short order the players’ values for 2018 are going to drop.

The missed Spring Training time becomes particularly important because any free agent who has already reached the age of 30 is signed as part of a win-now strategy.  Even before the current analytics trend took hold, teams well knew that over-30 free agents were going to provide almost all of their value in the first one to three seasons of their free agent deals.  The big payouts after the first two or three seasons were simply a cost of trying to win in the first few seasons.  Now, thanks to analytics, teams have better reasons not to hand out anything more than three year offers to over-30 free agents.

Analytics are basically about percentages, and percentages don’t necessarily predict reality.  Yes, relatively few major league teams are entering the 2018 looking like realistic possibilities to go deep into the post-season.  However, in baseball anything can happen in a short series.  10 teams make the post-season, and any of those ten teams could be the next 1973 Mets or 1987 Twins, or any of the many other not particularly impressive play-off teams since 1969 that got hot at the right time.

That said, there is almost no down-side to teams getting stingy with free agents this off-season, so long as the players’ union cannot prove collusion.  A few teams won’t perform as well in 2018 and 2019 as they would have if they gave the bucks to one or more of this year’s remaining free agents.  However, all teams will ultimately benefit if management succeeds in reducing the percentage of revenues that goes to free agents.

Assuming that the teams weren’t stupid enough this time around to create significant evidence of collusion, the biggest threat to management’s recent hard line is a player strike when the current collective bargaining agreement expires after the 2021 season.  That’s a long way out in the future in business terms, and management may be betting that players will have less stomach to strike with average annual salaries as high as they are now.

That’s a bet that management has consistently lost in the past, particularly during the labor disputes between 1985 and 1994 when salaries were hugely larger than they had been in 1966 when the players’ union formed. However, I suspect that management is full of people who will want to keep testing the players’ resolve as salaries grow higher.  Since it’s now been a generation since the 1994 strike, a new generation of management and players may have to find out for themselves the consequences of labor conflict in a highly profitable industry.

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