Marquee MLB Free-Agents Remain on Market, Whispers of Collusion

MLB2

Pitchers and catchers report in less than a month, but marquee free agents remain unsigned (see: Arrieta, Moustakas and Hosmer); and with just 51 players (includes just 13 position players) signed thus far this offseason, for a total of $655 million, whispers of collusion exist. Last week, executives from MLB and the MLBPA met to discuss the concerns; with MLB issuing the statement “there are a variety of factors that could explain the operation of the market. We can say that without a doubt collusion is not one of them.” That’s unlikely to sway the opinion of the MLBPA, which believes there is a template (which goes against the concept of free agency) for superstar player contracts; 3 years or $20 million plus annually, but not both.

Howie Long-Short: Franchise values have increased from $18.1 billion to $46.1 billion over the last 5 years and MLB will generate $10 billion in revenue this year, so it’s not like there isn’t money to pay the players; teams have just come to the realization that the money is better spent on younger, cheaper ones. As one league executive put it, “we pay players the minimum for three years and arbitration for three or four years, and then they get paid more in free agency for their decline?” Team’s wisely aren’t looking to reward past performance, they’re paying for future production. Is it collusion if everyone comes to the same intelligent decision?

Fan Marino: Sure, it’s likely that a handful of teams are saving for next off-season when Harper/Kershaw hit the market, and it’s true that star young players are signing under-market long-term deals (to guarantee their big payday); but, the rest of the proposed excuses for the cold-stove are nonsense. Teams aren’t waiting on Boras’ guys to sign, Ohtani and Stanton weren’t stalling the market, teams like the Yankees and Dodgers aren’t concerned about the luxury tax threshold and there isn’t a team owner in the league that doesn’t want to win (in the name of profits). The cold stove is a product of baseballs fundamentally flawed economic system (i.e. no floor on team spending). I suspect a strike is on the horizon; the current CBA expires following the 2021 season.

To join our free daily email newsletter list, sign-up here!

Author: John Wall Street

At the intersection of sports & finance.

12 thoughts on “Marquee MLB Free-Agents Remain on Market, Whispers of Collusion”

  1. I’m not a business owner, just a fan and lover of baseball since I was old enough to know who Banks, Mantle, Mays, Koufax, Drysdale and on and on were. I just don’t go along with the collusion talk, to avoid it, it seems an owner must hire an employee he may not deem to be an asset to his/her company/team, because the owner has managed his company/team to produce a very nice margin of profit while paying his employees also very nicely somehow makes him a “colluder “ MLBPA, MLB’s powers that be all have a hand in setting up, agreeing to the CBA and the “ rules “ governing the game, profits seem to be going to stadium upgrades, players are getting raises, the fans are PAYING MORE so the players, their families, the owners and their families can and are enjoying the ultimate, luxury lifestyle. Nobody is getting ripped here, if there’s a pinch, the fans are feeling it. IMO!

    1. You describe the situation perfectly and correctly defend the owners and players justifiable positions …. But then after noting the fans are paying for their largesse, miss the underlying injustice that permeates all levels of our society…. Corporations use tax and privilege to price the public out of the market….we either watch from home or compete with tax subsidized corporations for a seat and parking for a real game experience, and this after our taxes pay the subsidies making this unfair access and price structure to exist….as long as politicians are for sale the average guy not only can’t afford to take their family to a game, but indirectly pays for it….owners and players could still make huge profits without raping the public….and that goes for pharma, educstion, insurance, health care, etc.

      1. I appreciate you guys participating in the discussion. If you haven’t already done so, please sign up for our free daily newsletter at JohnWallStreet.com/sign-up

  2. Not collusion!
    32 year old players are asking for deals where they can’t maintain their level of play past the next 2-3 years. Pitchers especially need to wise up. There is no reason in the world for a team like the Cubs to pay Arrieta or Darvish more than $20 mm for their year 35-37 seasons. Their production will not warrant the contract they are asking for period. They know that and finally the owners know that.

    1. Thanks for engaging Joe! If you like our work, please sign up for the free daily newsletter. JohnWallStreet.com/sign-up

  3. The worst day in sports history, was when fans and everyone else thought they needed to know how much another player signed for. A) owners were not smart enough to make all contracts “incentive laiden”, this would create urgency each game to buffer the players earnings. A mandatory minimum payroll needs instituted to prevent teams like the Marlins from shredding payroll by “rebuilding” which is a horrible way to treat their fans much less players who fought hard for that city. B) look to institute a salary cap ala NBA instead of this horrible Luxury Tax that benefits no one. This way there can be “set contract length and salary Between certain parameters hopefully making egos and greed less important. This of course is a rough idea but I for one dont care in the least the $$ one signs for, just tell me how many years I can expect him to play for my city.

    1. Thanks for engaging Jay, if you like our work sign up for the free daily newsletter. JohnWallStreet.com/sign-up

  4. I think owners are expecting a little more from their investment. It’s getting to the point where a fan needs to take out a loan just to take his family to see a major league ball game.

    1. Thanks for contributing William. If you enjoy our work, sign up for the free daily newsletter. JohnWallStreet.com/sign-up

  5. There is now enough data to allow teams to realize that long term big money contracts generally don’t work out for players years 31 and up. Especially speed outfielders (Crawford, Jacoby) and almost all pitchers. Taking the money and investing in your current best players age 26-32 years is the smart move.

  6. The article mentioned value of the franchise but it’s not like they get 30 billion in cash flow to pay the player. I understand the 10 billion in revenue but not the value of a franchise.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.