MLB’s Winter Meetings event takes place next week and, up until a few days ago, it was shaping up to be the usual annual cattle market where the big names were finally going to find a new home.
Instead, the two leading free agents, David Price and Zack Greinke, have been taken off the market before any of the teams have booked into their hotel rooms.
The Boston Red Sox always looked like a frontrunner for Price’s services. A last-placed finish in the season just gone came after an offseason when they lost Jon Lester and spent their money on hitters, Hanley Ramirez and Pablo Sandoval, rather than acquiring an ace starting pitcher.
The Red Sox have plenty of money to spend and a change in their Front Office, bringing in ex-Detroit Tiger General Manager Dave Dombrowski, signalled that they were going to be aggressive in turning their fortunes around.
Price is exactly the type of elite talent that a well-heeled team like the Red Sox should be spending their money on. It’s required a huge commitment from them, a seven-year contract worth $217m (approximately £20.5m per year, or £394k per week), yet they can afford it even if a major injury comes along at some point and takes him off the field for an extended period.
That’s perfectly illustrated by looking at the dealings of the reigning AL East champions, and Price’s former team, the Toronto Blue Jays.
There’s a vast difference in committing $217m in a player to $36m. However, look past the headline figures and Price is much more likely to be worth $30m or so per year to the Red Sox than J.A. Happ will be worth the $12m per year that the Blue Jays will be paying him over the next three years. Limit it to the next two years and add Marco Estrada, who like Happ has been little better than average for most of his career, to the mix and you’ve got the Red Sox paying Price $30m per year, with the Blue Jays spending $25m combined on Estrada and Happ.
Which scenario would Toronto fans prefer?
It’s important to explain that the $25m figure is averaged out a bit by me there, as Estrada’s two-year $26m contract pays him $11m in 2016 and $14m in 2017, whilst Happ will earn $10m in 2016, then $13m in 2017 (and again in 2018). So in reality it’s $30m against $21m in 2016, then $30m against $27m in 2017.
What we’re seeing in Toronto’s contracts is how they are structuring deals as part of their wider payroll and the other commitments they have, including the small matter of a potential extension for Jose Bautista and/or Edwin Encarnacion in the near future.
All the same, Toronto are not a small market team that need to scrimp and save around the edges, or at least they shouldn’t be operating in that way. Putting money into one pitcher rather than two brings additional risk, but it appears as though the Blue Jays made this choice and never really got into the final running to re-sign Price. They may live to regret that decision, particularly as Price has stayed in the AL East to potentially haunt them.
That’s even more the case when we consider that Price’s seven-year/$217m deal is actually more likely to be a three-year/$90m deal. The pitcher can opt out of the contract at that point and, as we’ve just seen with Greinke, if he’s healthy and performs as he can during that period then he will opt out of the remaining four years and $127m to get another – i.e. longer and more lucrative – contract.
The opt-out is becoming a standard part of major free agent contracts precisely because it serves the player so well. The risk is all taken on by the team; if Price gets injured or has a sudden drop-off in performance then the Red Sox are committed to the additional $127m regardless.
There is a potential benefit for the team in this scenario if they are taking a gamble that the player will be well worth the money initially and opt out, only to then see the ageing process reduce his effectiveness with another team being lumbered with paying him at that point.
You’ve got to think, though, that the only real benefit in the opt-out for Boston is that they got Price at all. The chances are that the opt-out was close to non-negotiable, other than Boston significantly increasing the average annual value of the contract, which would have raised the risk and really raised the bar for the next ace pitcher free agent’s demands.
If they believe in Price’s future, and there’s no reason not to other than the usual doubts about pitcher health, the Red Sox are left delighted to have him, but with the slight sense of foreboding that he might ‘do a Greinke’ in three years time.
Whilst Price’s signing with the Red Sox was no surprise, Zack Greinke signing for the Arizona Diamondbacks was a genuine shock.
The six-year, $206m contract (approximately £22.7m per year, or £436k per week) is completely out of kilter with the D-Backs’ recent dealings. ESPN summed it up best when they noted that the $206m they’ve committed in Greinke is more than all of their Major League Free Agent spending over the last eight off-seasons combined.
The splurge reportedly has not impressed some of the big market teams. You can understand the unhappiness of teams that commit sizeable sums to the shared revenue money pool, only to have a team like the D-Backs pocket it for several seasons and then use the financial flexibility to outbid them for an elite starting pitcher. That’s certainly not what teams like the L.A. Dodgers believe the ‘fairness’ of revenue sharing is about and it will be a significant point of contention among the 30 MLB ownership groups over the next year as a new Collective Bargaining Agreement with the Players’ Union is negotiated.
For the rest of us, the D-Backs jumping in to, and winning, what had appeared to be a personal battle between the titans of the NL West division, the Dodgers and the San Francisco Giants, for Greinke’s signature is a remarkable outcome that should spice up the division no end.
The Giants have already responded (and perhaps that should be started to respond) by signing Jeff Samardzija to a five-year, $90m contract. Meanwhile the smarting Dodgers are not going to sit idly by with their huge financial reserves sitting in the bank.
Whilst we won’t have the futures of Price and Greinke to debate during the Winter Meetings this coming week, the way those signings have panned out – 2015’s last-placed Red Sox retooling in the AL East and the D-Backs taking Greinke away from the first-placed Dodgers in the NL West – are only going to make the free agent and trade market all the more exciting.
