Jeff Passan: Why Aren't Contracts Going Up?

[Pancake Bear]

https://sports.yahoo.com/bryce-harper-manny-machado-become-highest-paid-free-agents-since-rod-013808682.html

Basically what I've been saying: 400 million for Machado and Harper is highly doubtful. Not because they shouldn't, simply because owners seem hesitant to go that far yet. 

Doesn't mean it won't happen, but so far there's little evidence beyond journalistic speculation that owners will take the 400mil plunge on Bryce or Manny with Trout on deck, and a fair bit of evidence - the reality that contracts just haven't jumped nearly that high yet (as we should expect to see) if it's going to happen - that it won't.

My prediction remains 12 years, 360mil is the most either of them walk away with and neither will get 400. 

[tdawg87]

I agree but to be fair, all it takes is one owner willing to shell out that money.

[kevinb]

I think the players probably have some gripe. The prices for players really haven’t increased much since A Rod and that was forever ago 

[floplag]

Yeah thats a can of worms, many factors.  i think there are lines noone in the game wants to cross, it opens floodgates.  Almost all the long term deal ended up at least partially albertrossish and i dont think that many teams can afford those kinds of numbers and remain competitive. 

These 2 guys this year are outliers, its rare to see this kind of talent reach the open market... BUT, neither is perfect either.  

Even going as high as 275ish would make either of them the richest contract in history.  it doesnt have to go over 300 to satisfy the egos and requirements 

[ukyah]

7 minutes ago, Sean-Regan said:

https://sports.yahoo.com/bryce-harper-manny-machado-become-highest-paid-free-agents-since-rod-013808682.html

Basically what I've been saying: 400 million for Machado and Harper is highly doubtful. Not because they shouldn't, simply because owners seem hesitant to go that far yet. 

Doesn't mean it won't happen, but so far there's little evidence beyond journalistic speculation that owners will take the 400mil plunge on Bryce or Manny with Trout on deck, and a fair bit of evidence - the reality that contracts just haven't jumped nearly that high yet (as we should expect to see) if it's going to happen - that it won't.

My prediction remains 12 years, 360mil is the most either of them walk away with and neither will get 400. 

the very idea of a 12 year contract is ridiculous.

[Angelsjunky]

2 minutes ago, Kevinb said:

I think the players probably have some gripe. The prices for players really haven’t increased much since A Rod and that was forever ago 

But A Rod jumped way out ahead of everyone else in 2000, surpassing Delgado's AAV of $17M with $25.2M. I think it took the rest of the league about ten years to catch up. The salaries have continued to creep up, with Trout the highest paid in 2018 at $33.25M. There just hasn't been a spike like we saw with A Rod in 2000. 

[kevinb]

6 minutes ago, floplag said:

Yeah thats a can of worms, many factors.  i think there are lines noone in the game wants to cross, it opens floodgates.  Almost all the long term deal ended up at least partially albertrossish and i dont think that many teams can afford those kinds of numbers and remain competitive. 

These 2 guys this year are outliers, its rare to see this kind of talent reach the open market... BUT, neither is perfect either.  

Even going as high as 275ish would make either of them the richest contract in history.  it doesnt have to go over 300 to satisfy the egos and requirements 

ARod signed in 2001 and only one person since him has signed a more lucrative contract. If the baseball union wanted to fight this they’d probably win. Inflation alone those dollar figured would go up for the players. Not many people are making over 25 a year in the sport. Especially with more revenue streams coming into the owners and leagues pocket books. The players could fight this. 

[kevinb]

1 minute ago, Angelsjunky said:

But A Rod jumped way out ahead of everyone else in 2000, surpassing Delgado's AAV of $17M with $25.2M. I think it took the rest of the league about ten years to catch up. The salaries have continued to creep up, with Trout the highest paid in 2018 at $33.25M. There just hasn't been a spike like we saw with A Rod in 2000. 

He did. But wasn’t Manny right after him? Man 17 years ago I can’t remember all this stuff or remember it vaguely. Didn’t Manny get something like 180 ish? I just think it’s an interesting concept. Players avg salary has gone up but salaries as a whole hasn’t reached a new level since the 250 mark. Stanton signed for 275? Or 300?

[beatlesrule]

14 minutes ago, tdawg87 said:

I agree but to be fair, all it takes is one owner willing to shell out that money.

Yup. I am sure an owner will just wake up one day and tell his people to go sign one of those guys. If Machado or Harper really want to win, it limits the teams that can both pay them a lot and give them a shot at winning. If they are all about the highest bidder, any owner can get them.

[kevinb]

3 minutes ago, beatlesrule said:

Yup. I am sure an owner will just wake up one day and tell his people to go sign one of those guys. If Machado or Harper really want to win, it limits the teams that can both pay them a lot and give them a shot at winning. If they are all about the highest bidder, any owner can get them.

Owners are making money hand over fist. It’s funny that players are supposed to take a discount “if they want to win” but owners are fine making more than the top players yearly, the value of their teams are sky rocketing and the cities have to give these billionaire owners new stadiums or they’ll threaten to walk. But it’s the players who are the bad guys for taking rich contracts. 

[IheartLA]

If you look back around the 2014 season that was when a lot of money was being thrown around from Miggy/Stanton/Kershaw/Trout/etc. Baseball had no problem extending players with huge money even before that player was set to his FA with AAV close to what they would have gotten if they were FA. 

Players were happy to sign deals giving away a few years of FA away because it wasn't a big deal before. The way the game is now teams are going year to year, star players aren't extending because just 3-4 years ago a good player had no problem getting a good deal at ~30 years old. If anything Trout signed his deal because it lined him up to get a standard 10 year contract to wrap him up till age 40ish which is the benchmark age that players shoot for before retiring. If JD Martinez was a FA in 2014 even at age 30 like he was this past year he would have had no problem getting the $200M deal that Boras was expecting. 

I honestly think that Trout hitting FA at age 26 was the only player that could have had a chance to break $400/$500 million. He literally didn't have a bad or average year ever, unlike every other player who have had their peaks/valleys. 

[beatlesrule]

4 minutes ago, Kevinb said:

Owners are making money hand over fist. It’s funny that players are supposed to take a discount “if they want to win” but owners are fine making more than the top players yearly, the value of their teams are sky rocketing and the cities have to give these billionaire owners new stadiums or they’ll threaten to walk. But it’s the players who are the bad guys for taking rich contracts. 

I just meant because the of the luxury tax. Very few owners are willing to go over it.  The Red Sox owner did and he won a World Series but other owners have gone over and not won a World Series.  In that sense, both Machado and Harper are going to command over $300 million(most likely) so it's a very big investment and how many teams out there would be able to surround those guys with talent good enough to get far into the playoffs and still stay under the tax?  It would take an owner to do something they have never done before. Maybe some team no one has thought about pays big money but I doubt it.

[Pancake Bear]

34 minutes ago, tdawg87 said:

I agree but to be fair, all it takes is one owner willing to shell out that money.

 

38 minutes ago, Sean-Regan said:

Doesn't mean it won't happen, but so far there's little evidence beyond journalistic speculation that owners will take the 400mil plunge on Bryce or Manny with Trout on deck, and a fair bit of evidence - the reality that contracts just haven't jumped nearly that high yet (as we should expect to see) if it's going to happen - that it won't.

Hence, my qualification.

Making absolute bets is a fool's gamble, but it seems to me that (for many reasons, some of which are articulated in the article) Harper and Machado aren't going to get as much as people are speculating. However, due to the fact that these aren't extensions, the age they're hitting FA at, etc. it is *possible* they beat my estimate. I'm just taking the under, and I think the probabilities are on my side. But we'll see.

[Angelsjunky]

43 minutes ago, Kevinb said:

He did. But wasn’t Manny right after him? Man 17 years ago I can’t remember all this stuff or remember it vaguely. Didn’t Manny get something like 180 ish? I just think it’s an interesting concept. Players avg salary has gone up but salaries as a whole hasn’t reached a new level since the 250 mark. Stanton signed for 275? Or 300?

A Rod surpassed his own contract, re-upping after his opt out for $275M in 2008. That wasn't surpassed until Stanton got 13/$325M in 2014 (through 2027!). The Manny contract was 8/$160M for 2001-08.

The AAVs have been steadier, though.

Top 10 MLB contracts (from Cot's Baseball Contracts)

1. Giancarlo Stanton, $325,000,000 (2015-27)
2. Alex Rodriguez, $275,000,000 (2008-17)
3. Alex Rodriguez, $252,000,000 (2001-10)
4. Miguel Cabrera, $248,000,000 (2016-23)
5. Albert Pujols, $240,000,000 (2012-21)
… Robinson Cano, $240,000,000 (2014-23)
7. Joey Votto, $225,000,000 (2014-23)
8. David Price, $217,000,000 (2016-22)
9. Clayton Kershaw, $215,000,000 (2014-20)
10. Prince Fielder, $214,000,000 (2012-20)

Top AAVs (from Cot's Baseball Contracts)

1. Zack Greinke, $34,416,666 (2016-21)
2. Miguel Cabrera, $31,000,000 (2016-23)
… David Price, $31,000,000 (2016-22)
… Clayton Kershaw, $31,000,000 (2019-21)
5. Clayton Kershaw, $30,714,286 (2014-20)
6. Max Scherzer, $30,000,000 (2015-21)
7. Roger Clemens, $28,000,022 (2007)
8. Alex Rodriguez, $27,500,000 (2008-17)
… Yoenis Cespedes, $27,500,000 (2017-20)
10. Jon Lester, $25,833,333 (2015-20) 

Top 2018 Salaries (Bleacher Report)

With fWAR in parentheses for gits and shiggles...

1. Clayton Kershaw, $35.57M (3.5)

2. Mike Trout, $34.08M (9.8)

3. Zack Greinke, $34M (3.5)

4t. Miguel Cabrera, $30M (0.7)

4t. David Price, $30M (2.7)

4t. Jake Arrieta, $30M (2.0)

7. Yoenis Cespedes, $29M (0.9)

8. Jason Heyward, $28.17M (2.0)

9. Justin Verlander, $28M (6.8)

10. Jon Lester, $27.5M (1.7)

Of those ten players, only Trout and Verlander were what could be called "good value." Kershaw and Greinke were OK, Price vaguely passable. Arrieta, Heyward, and Lester were all poor value. Miggy and Cespedes were duds.

As a side note, even though he bounced back a bit, I can't believe the Cubs are paying Heyward $28M a year.

 

[floplag]

1 hour ago, Kevinb said:

ARod signed in 2001 and only one person since him has signed a more lucrative contract. If the baseball union wanted to fight this they’d probably win. Inflation alone those dollar figured would go up for the players. Not many people are making over 25 a year in the sport. Especially with more revenue streams coming into the owners and leagues pocket books. The players could fight this. 

Perhaps, but ARod so outpaced the market maybe its just now starting to catch up.  Has anyone else of that level of player reached FA in their 20s since he did?   i cant think of one. 
Plus costs have gone up with revenues, average players making 10M+ etc.  Many teams have been at or near lux tax levels in recent years, its not like the top of the heap isnt spending, they just arent doing those monster deals.
Dont get me wrong i think the owners are making bank, but there has to be some limit to these contracts. 

[Angelsjunky]

Also, teams started extending their young stars while still club-controlled, perhaps due to the A Rod contract. 

Imagine if Trout had gone to free agency last year, which he would have been eligible for if the Angels hadn't extended him. 

[kevinb]

1 hour ago, floplag said:

Perhaps, but ARod so outpaced the market maybe its just now starting to catch up.  Has anyone else of that level of player reached FA in their 20s since he did?   i cant think of one. 
Plus costs have gone up with revenues, average players making 10M+ etc.  Many teams have been at or near lux tax levels in recent years, its not like the top of the heap isnt spending, they just arent doing those monster deals.
Dont get me wrong i think the owners are making bank, but there has to be some limit to these contracts. 

I agree I think there is that point where there is going to be a limit. I just don't think any of the owners are actually close to it. There is a reason they put a "luxury tax" into an effect they can't help themselves. The cap is more for the owners and making sure they play nice then it is for the players. The owners can depreciate a ton of assets, their teams keep going up in price, and live rights are just sky rocketing. With all the agreements they get from cities and stadiums paid for etc. There is a reason billionaires are lining up every time one of these assets goes up for sale. 

[IheartLA]

2 hours ago, Kevinb said:

I agree I think there is that point where there is going to be a limit. I just don't think any of the owners are actually close to it. There is a reason they put a "luxury tax" into an effect they can't help themselves. The cap is more for the owners and making sure they play nice then it is for the players. The owners can depreciate a ton of assets, their teams keep going up in price, and live rights are just sky rocketing. With all the agreements they get from cities and stadiums paid for etc. There is a reason billionaires are lining up every time one of these assets goes up for sale. 

Bingo. Revenue sharing is almost a joke, no small market team is even using their money which was supposed to be given them to spend so they could "compete" rather than tank. 

[floplag]

7 hours ago, IheartLA said:

Bingo. Revenue sharing is almost a joke, no small market team is even using their money which was supposed to be given them to spend so they could "compete" rather than tank. 

Well this is the real flaw in the system, the put in a ceiling but no floor and those owners than run teams like a business that have no desire to actually win but collect the revenue have taken full advantage. 
I personally dont think a team should qualify for revenue sharing unless they make a legitimate effort and those teams that make that effort should not be asked to subsidize those who do not.

 

9 hours ago, Kevinb said:

I agree I think there is that point where there is going to be a limit. I just don't think any of the owners are actually close to it. There is a reason they put a "luxury tax" into an effect they can't help themselves. The cap is more for the owners and making sure they play nice then it is for the players. The owners can depreciate a ton of assets, their teams keep going up in price, and live rights are just sky rocketing. With all the agreements they get from cities and stadiums paid for etc. There is a reason billionaires are lining up every time one of these assets goes up for sale. 

I think there is more to it that than, i think there is also a PR component to it.   I think its hard for fans of any game to see players making these ridiculous salaries and MLB is perhaps the worst in that regard. 
Think back to Kevin Brown, ARod, all the "milestone" deals... most of them have not worked out from a PR perspective.    Noone can play up to that level of expectation.  I personally dont think any player in this or any other game is worth the monopoly money numbers were talking about for Harper, Machado, or yes even Trout.    When does it end?  At some point there becomes a resentment over it, i think were very close to a point where it becomes detrimental to the game if it hasnt already.  

So what if the owners are making money, hell corporations that make money arent required to pass it on the employees, in fact that the exact opposite of what they do, why are MLB teams supposed to give away all profits?   Im not pro owner at all but this sense of entitlement the players union has is perhaps even more offensive than the rich getting richer.  

[Docwaukee]

Stanton signed his deal before his age 25 season to take him through age 37.  It also bought out 2 arb years. 

Did people already forget about steroids?  Arod was the Trout of the steroid era.  Thought of as a generational player.  He got the 2001 version of what Trout will get somewhere between now and 2021.  He was also a year younger than Harper and Machado who are entering their age 26 seasons while Arod was entering his age 25 season.  

Before we knew he was dirty, Arod was better than Machado or Harper.  At the time, many owners were furious with Tom Hicks and it was said that he essentially bid against himself.  

When is the last time we had a generational player become a free agent at age 25?  BTW, I don't consider Harper or Machado generational players.  

So since the league and mlbpa has tried to curtail PED use, guys are no longer as successful into their late 30's with some exceptions of course.  But by and large, the normal aging curve has come back.  

AAV's have crept up appropriately though.  It's just that the number of years haven't been there because of those aging curves and that there hasn't been that player.  

I think we'll see Harper and Machado will either see a bump in AAV or years but not both.  

ARod's contract kicked the market in the teeth in both years and AAV.  I just don't see that happening for either of these guys as they both have considerable warts and teams are much better at calculating risk.  

As Lerner said about their offer to Harper of 10/300.  They went straight to the finish line.  I think someone else might creep up to the 330 range so Bryce can go over the Stanton deal and boras can say it's the biggest contract in major league history which I see being important to them.  Machado will fall in somewhere below that.  I think in the 270-300 range.  

Some are using the Corbin contract as an indicator of how it means that Harper and Machado deals will explode.  That contract was an overpay, but it's not a market disruptor by any stretch.  

When you get to the very top of the market, the economics of the baseball ecosystem impart more force and it becomes less about the value a player provides on the field.  Trout might deserve 50m per season, but the market just isn't going to support that.  

[kevinb]

@floplag I see you’re point from a PR stand point. But the real problem is we see what the players salaries are. We don’t see what the owners are making yearly. If we saw salary numbers or revenue numbers for each owner like we do players I think it would be a different story. I’m not anti owner or pro owner similarly I’m not anti or pro player.  But that has to be part of it. Also the owner is the owner of the teams the fans root for. So of course the fans are going to side with the team over the player wanting more money. 

At the end of the day most people view sports from a point of fandom and not business or business transactions. This is the players job and they really at most get 20 years of this job and then it’s over. I know it’s hard as fans to view these athletes and our teams as an actual business but it’s truly what it is. I don’t hate Pujols for taking the 250 million dollar deal. It was offered to him and I would have taken it over and over again. It’s why I laugh when people say Pujols should retire and walk away from all this money owed to him. He shouldn’t it’s his money he should get every cent. 

[Stradling]

The real problem is we know what the players make.  There’s really no added value as a fan to know what the players make.  I’d argue it takes away enjoyment of the game more than adds to it.  

They’re entertainers and the best in the world at what they do.   Each of the characters of Big Bang Theory make over $25 million a year.  George Clooney made $40 million this year and I don’t know a single movie he was in this year.  If we had no idea what they all made we’d be better off.  

[Docwaukee]

4 minutes ago, Stradling said:

The real problem is we know what the players make.  There’s really no added value as a fan to know what the players make.  I’d argue it takes away enjoyment of the game more than adds to it.  

They’re entertainers and the best in the world at what they do.   Each of the characters of Big Bang Theory make over $25 million a year.  George Clooney made $40 million this year and I don’t know a single movie he was in this year.  If we had no idea what they all made we’d be better off.  

I actually enjoy that part of it.  I'd like to take it a step further and have teams put out public financial statements.  I think that level of transparency would at least level the playing field with the highly publicized player contracts.  

[kevinb]

It would definitely be interesting to see the reaction from fans when they found out how much the owners make yearly. 

[floplag]

1 hour ago, Kevinb said:

@floplag I see you’re point from a PR stand point. But the real problem is we see what the players salaries are. We don’t see what the owners are making yearly. If we saw salary numbers or revenue numbers for each owner like we do players I think it would be a different story. I’m not anti owner or pro owner similarly I’m not anti or pro player.  But that has to be part of it. Also the owner is the owner of the teams the fans root for. So of course the fans are going to side with the team over the player wanting more money. 

At the end of the day most people view sports from a point of fandom and not business or business transactions. This is the players job and they really at most get 20 years of this job and then it’s over. I know it’s hard as fans to view these athletes and our teams as an actual business but it’s truly what it is. I don’t hate Pujols for taking the 250 million dollar deal. It was offered to him and I would have taken it over and over again. It’s why I laugh when people say Pujols should retire and walk away from all this money owed to him. He shouldn’t it’s his money he should get every cent. 

No, we dont see where the owners are, then again we dont see much about corporate CEOs and such and those we do are vilified.  But at the end of the day, does it really matter?  I dont think anyone wants to be the next team to give a 250M contract, let alone 300 or 400.    
I think fans are tired of a day at the ballpark turning into a second mortgage. 
Admitting they can give one player, one, that much money opens the floodgates to a myraid of questions about ticket prices, concessions, parking and a lot of other stuff thy really dont want to talk about. 
MLB has worked the exemption about as far as it can go. At some point there will be pushback.  
Its just my opinion mind you.

Pujols though, idk man i beleive he wont play out the entire term.  Hes never struck me as the greedy type.  Hes gonna get the money either way, spread out over more years in personal services than on field play but i dont think he leaves anything on the table just because he isnt playing any longer.  Might be the most overpayed hitting coach in the game in 20 for example but that doesnt count against the cap.