By Evan Biancardi
It has been over a month since we last looked at the top Major League Baseball free agents, and while it was expected that at least a few players would still remain, it’s shocking that the vast majority of free agents are still looking for suitors. Many have speculated as to why this year’s free agency has lagged in comparison to years past, but the answer is quite obvious.
Yes, teams may be holding out for next year’s class, which could potentially include Harper, Machado, Donaldson and Keuchel among others, but contending teams simply can’t afford to wait an entire season to bolster their rosters. A more compelling argument is that baseball has a parity issue.
Last season, three teams totaled at least 100 victories and the top eight all recorded over 90. Meanwhile, a total of 18 teams had losing records. This is a key factor, as teams like the Marlins, Pirates and Rays are now giving up superb talent to buyers such as the Blue Jays, Cardinals and Giants. These teams were previous potential landing spots for players like Cain, Martinez and Hosmer, but now, the market is practically nonexistent for some of the top hitters.
As far as pitching is concerned, the current state of the market is more complicated. It’s clear that this year’s group surpasses 2019’s free agent class. Aside from Keuchel, the next best available starting pitcher will probably be Gio Gonzalez, and the options drop off significantly after that. So, why aren’t teams going after Darvish, Arietta, Cobb or Lynn? I truly don’t think it’s because teams value starting pitching any less, and teams’ hesitation to sign starters to long-term deals is a theory that has been addressed and debunked numerous times.
The true reason is because previous big spenders don’t want to exceed the luxury tax threshold. Under MLB’s Collective Bargaining Agreement (CBA), teams who exceed the $197 million threshold are slated to pay a 17.5 percent luxury tax on every dollar above the cap. If a team continues to surpass the cap, it is required to pay a 30 percent tax for the second year, 40 percent for the third year and a 50 percent tax for each subsequent season. The only way a team can reset its tax rate is if it decreases its payroll below the threshold. That is currently what teams are trying to do.
Last year, the Dodgers, Yankees, Tigers, Red Sox, Cubs and Giants were all forced to pay a luxury tax, and for many of these teams, it wasn’t their first offense, so it’s no surprise that the big spenders are shedding payroll to reset their rates. Because of the vast inequality in the market, such teams can now afford to do so. The Yankees and Dodgers, perennial big spenders in recent years, have spent only $12 million combined on free agents. However, both teams are expected to be among the top teams in baseball. The problem is, while this trend in decreased spending is saving teams millions of dollars, it’s costing free agents millions in future salary. One silver lining in all of this could be the fact that teams on the cusp of contention, such as the Angels, Phillies, Rockies and Twins, have accounted for over $300 million in free agent spending this offseason.
Things won’t be like this forever, though. With spring training less than two months away, expect to see many top players fall off the board in the coming weeks.
