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How MLB’s Hot Stove Got Hot Again

SAN DIEGO — During last year’s MLB winter meetings in Las Vegas, a podium set up for free-agent announcements went largely unused: It was an ice-cold start to the hot-stove season. So at this year’s meetings in San Diego, it was a surprise when agent Scott Boras and Washington Nationals GM Mike Rizzo took seats on the platform of the Grand Hyatt ballroom to discuss the Nats’ seven-year, $245 million commitment to retain Boras client Stephen Strasburg, a then-record deal for a pitcher that even exceeded forecasts. That deal was eclipsed a day later by another Boras client, Gerrit Cole, who reached an agreement on a nine-year, $324 million contact with the New York Yankees. The following day, yet another Boras client, Anthony Rendon, agreed to a $245 million deal with the Los Angeles Angels, pushing Boras’s total contracts for clients to near $1 billion before the new year.

But as Boras spoke to reporters on Dec. 9 about the great a match made by Strasburg and the Nationals, he was asked why the deal took some time to come together.

“Took a while?” Boras said. “I don’t know where you’ve been the last two years, but this is like the beginning of summer for me.”

In 2019, the average MLB player salary declined for a second straight season despite the league’s increasing revenues. Clubs seemed to have moved away from the players’ primary compensation-driver: free agency. While the middle class and older free agents have been hit especially hard in recent winters, not even the top free agents were exempt from waiting for markets to develop: Boras himself had two under-30 star clients enter free agency last winter in Bryce Harper and Manny Machado, and they were kept waiting to sign contracts until after spring training camps began.

But something has changed early this offseason: Clubs are spending.

Teams had spent $1.577 billion on free agents1 through Thursday — the 50th day of free agency this offseason — according to data from The Baseball Cube analyzed by FiveThirtyEight. That’s up by 257 percent through the same period last offseason, when clubs spent $442 million on free agents through the first 50 days of free agency. And it’s a 236 percent increase from the 2017-18 offseason, when $467 million was spent. This winter’s early offseason spending marks the greatest dollar amount awarded to players through 50 days of any offseason in our seven-year data set.

The total number of signings (51) is also up through the first 50 days of the offseason compared with last year (28) and 2017-18 (31).

The hot stove is actually warm early this offseason

Number of MLB free-agent signings and total spent (in billions of dollars) through 50 days since the end of the World Series, since 2013

Offseason No. of signings Total dollars
2019-20 51 $1.6b
2018-19 28 0.4
2017-18 31 0.5
2016-17 50 1.0
2015-16 53 1.4
2014-15 41 1.2
2013-14 58 1.2

Source: The Baseball Cube

So what’s behind the spending surge this winter?

The main driver might be the amount of talent available on the market. This free agent class totaled 119.9 WAR last season, the most for a class since 2003, according to Baseball-Reference.com data. The group was led by 29-year-old Cole. Since the advent of free agency, Cole is coming off the 12th-greatest WAR total entering free agency of any player under 30 and the fourth-best such season among pitchers, trailing only Greg Maddux (9.4 WAR in 1992), John Smoltz (7.7 WAR in 1996) and CC Sabathia (7.2 WAR in 2008).

Industry sources noted that not only is this a rare class, especially for the type of player who led clubs last October, but some rebuilding clubs are also now trying to enter competitive cycles by acquiring these players. The Chicago White Sox, who finished 2019 at 72-89, signed star catcher Yasmani Grandal earlier this offseason and reportedly had the highest offer on the table for Zack Wheeler, who ultimately chose the Phillies. More teams vying for playoff contention should mean more buyers — and more competition for free agents.

Another reason behind the increased spending could be that in recent years, free agents who sign with new teams have shrunk their performance gap with free agents who re-sign with their old teams, according to ESPN’s Sam Miller. Perhaps teams are warming back up to free agency in part because they are better managing the players they sign.

It’s also possible that owners are reacting to unrest among players, with some observers predicting a work stoppage over free agency when the league’s collective bargaining agreement expires on Dec. 1, 2021. Owners may be trying to extend some goodwill to keep players from rioting. After all, the owners are doing extremely well with the status quo — not only are revenues increasing, but so too are franchise values. Even the small-market Royals are valued at a billion dollars.

Of course, while free-agent stars are enjoying massive deals, it remains to be seen how the middle class of free agents will do this offseason. As it’s only December, scores of players remain unsigned. Another Boras client, Mike Moustakas, did sign for four years this winter after having to settle for a one-year deal last February, which could be an encouraging omen for those players looking for a home. Grandal also inked a four-year deal after signing for one year with a mutual option last season. But even if this rising tide of spending doesn’t lift all free agents, we do know one thing: Free-agent spending is back — at least for now.

Footnotes

  1. Our pool of available free agents includes any player with major league experience who was granted free agency or released in October and November of each season. That excludes players signed internationally or those waived by a club before the season ended or later in the offseason.

Travis Sawchik is a sportswriter for FiveThirtyEight.

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