For decades, MLB commissioners and franchise owners have been crying poor about the business of baseball. The mewling is endless and dishonest and laughably absurd. But the people who run the sport and control the teams have done an effective job of convincing the public to blame the “greedy” players and their agents for the looming financial catastrophe.
The doomsday wailing could be heard again in late 2021 and into the new year, as the owners locked out the players to set off the latest labor dispute. The bitter negotiations lasted 99 days and caused a delay to the opening of the 2022 season.
There was this gem from commissioner Rob Manfred: “If you look at the purchase price of franchises, the cash that’s put in during the period of ownership and then what they’ve sold for, historically, the return on those investments is below what you’d get in the stock market, what you’d expect to get in the stock market, with a lot more risk.”
Sure. Never mind that in April of this year the annual Forbes franchise valuations listed 15 of the 30 teams with a value of at least $1.76 billion, and up to $6 billion. And only the Miami Marlins were valued less than $1 billion (barely.) Anyway, the average value of MLB teams increased nine percent in 2022, bringing it to an all-time high $2.07 billion.
The Pittsburgh Pirates have an owner, Bob Nutting, who makes no attempt to win. He purchased the franchise for $92 million in 1996. For 2022 Forbes valued the Pirates at $1.32 billion with an operating income (read: profit) of $64 million. Oh, those damn players. Baseball is dying, and it’s all their fault.
Let’s fast forward to the here and the now.
Baseball’s poverty-stricken circumstances seem to be improving. Imagine that.
It’s a miracle!
There’s the comfort of a new collective bargaining agreement reached with the players last spring. And the additional TV or streaming deals. There’s an increase in sponsorships, and expanded playoffs. There’s a $30 million per-team handout following the sale of MLB’s remaining 15% of its BAMtech holdings. And driving the market are go-go-go owners like the Mets’ Steve Cohen that are feverishly pursuing free agents. What we’re seeing is an outbreak of incredibly extravagant spending that continues to rage on.
It’s awesome. And it’s overdue. There’s nothing new about baseball’s booming business. The difference? More owners are refusing to go along with the old narrative and are choosing to spend in a way that reflects the MLB’s financial growth.
Of the 10 largest total-value free-agent contracts given out in MLB history, four have been signed over the past week: Aaron Judge, Carlos Correa, Trea Turner and Xander Bogaerts. (This excludes contract extensions that teams dished to their own players.)
Here are the nine-highest total value contracts bestowed on players so far this offseason:
OF Aaron Judge, Yankees, 9 years and $360 million.
SS Carlos Correa, Giants, 13 years and $350 m.
SS Trea Turner, Phils, 11 years and $300 m.
SS Xander Bogaerts, Padres, 11 years, $280 m.
SP Jacob deGrom, Rangers, 5 years, $185m.
CF Brandon Nimmo, Mets, 8 years, $162 m.
RP Edwin Diaz, Mets, 5 years, $102m.
C Willson Contreras, Cards, 5 years, $87.5 m.
SP Justin Verlander, Mets, 2 years, $86.67 m.
The Mets also signed pitcher Kodai Senga out of Japan on a five-year deal for $75 million. Cohen’s current Mets payroll has reached a baseball-record $350 million. And he isn’t finished.
Last offseason, the top three contracts went to Corey Seager, Kris Bryant and Marcus Semien for a total of $682 million. This offseason, the three most expensive contracts went to Judge, Correa and Turner for a total $1.01 billion.
Three other interesting aspects of this year’s free-agent marketplace:
1) Teams are more willing to invest in massive long-term deals for aging stars, with 11 of the 13 largest free-agent contracts to date being distributed to players age 30 or older. This is surprising. It wasn’t that long ago that teams turned away from extended-term deals after seeing the heartburn caused by the monster-sized contracts for Robinson Cano (Mariners), Albert Pujols (Angels) and Miguel Cabrera (Tigers.) And what about Jacob deGrom? The Rangers gave this brilliant right-hander the richest free-agent contract for a starting pitcher (5 years, $185 million) even though injuries limited deGrom to an average of 13 starts over his last two seasons with the Mets. He’ll turn 35 in June.
2) Teams aren’t as reluctant as before to agree to longer-length contracts. Last offseason, the 10 largest contracts handed out averaged 5.7 years, and that average has increased to 7.5 years this offseason.
3) It’s been a rewarding market for mid-rotation, back-rotation starting pitchers. As of early Wednesday afternoon a total of $444 million had been dispersed to Tyler Anderson, Jose Quintana, Ross Stripling, Chris Bassitt, Taijuan Walker, Jameson Taillon, Zach Eflin, Nick Martinez, Matthew Boyd, Sean Manaea, Andrew Heaney, Trevor Williams, Kyle Gibson and Mike Clevinger.
All in all, MLB teams have committed more than $3 billion in free-agent contracts so far this offseason. And there are other exorbitant signings on the way, with starting pitcher Carlos Rodon and shortstop Dansby Swanson set to cash in as the best available remaining free agents. And many other fine pitchers and position players are still out there.
According to Spotrac, MLB teams spent around $3 billion on free-agent contracts in advance of the 2022 season. So this get-after-it attitude actually took root following the 2021 season, in advance of ‘22.
Before the 2021 season, the total free-agent investments came to $1.3 billion. We can understand that lower total ($1.3 billion) because it came after the pandemic-shortened 2020 season. But before the 2020 season – and before the pandemic set in – teams spent $2.16 billion in free-agent contracts.
It’s fun to watch all of this crazy bidding on players. I use the word “crazy” as a compliment, because MLB’s owners have the revenue to do anything they want to do … same as always. So why not let it fly if it’s your preferred strategy to pursue a World Series championship?
It’s good to see more than a few franchise owners and their front offices suspend all pretense, stop being phonies, and come out into the open with a show of financial force. It’s also good to see clear evidence that the industry has rebounded from the two Covid-damaged seasons in 2020 and 2021.
Not only does this shopping frenzy make huge headlines and create excitement – good for the sport! – the wildness is exposing MLB’s Big Lie.
As the commish and the owners were crying poor, they actually were crying wolf … by making it all up. Except on rare occasions, there’s never been a legitimate excuse for a cheapskate owner to withdraw from competition by severely limiting player payroll. This sport-business will likely exceed $11 billion in revenue in 2023.
Baseball has always had a share of big-money heavyweight franchises and smaller-market teams that aren’t as wealthy. But these have-not teams have the resources to try harder, and compete harder. These trifling owners use less muscular finances as an excuse to withdraw as challengers. They receive revenue-sharing payments from wealthier teams, happily collect the money, blissfully pocket the money, and don’t redirect much of the free cash into their roster.
The richer teams have an advantage, sure. But that’s always been the case during the free-agent era. But the richer teams are also taking more of a risk by throwing so much money around to lunge for a World Series trophy. If money was everything, then why haven’t the Yankees won a World Series (or played in one) since 2009? Why haven’t the Dodgers triumphed in the World Series in a full season since 1988? When the big boys go all-out in their payroll escalation and fail, it’s humiliating. And fans of most other teams get to laugh at the large spenders who get booted from the postseason.
The Mets, Yankees, Phillies and Padres have made the most noise in free agency, but we’ve seen the Giants, Rangers and Blue Jays take aggressive swings.
The Cardinals joined the action with Contreras purchase. In total value, the Contreras contract is the eighth-highest free-agent deal given to a player this offseason and ranks 16th in annual average value. At least the Cardinals got into the game … not enough, mind you … but at least they jumped in.
Is there more coming? I don’t know. But I do know this: if motivated, the Cardinals can afford to sign any player, at any cost. And the Cards can make a trade for a coveted player that comes with a gargantuan contract. No limits.
Thanks for reading …
Bernie invites you to listen to his opinionated and analytical sports-talk show on 590 The Fan, KFNS-AM. It airs Monday through Thursday from 3-6 p.m. and Friday from 4-6 p.m. You can listen by streaming online or by downloading the show podcast at 590thefan.com or the 590 app.
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All stats used here were sourced from FanGraphs, Baseball Reference, Stathead, Bill James Online, Fielding Bible, Baseball Savant, Brooks Baseball Net and Spotrac.
For the last 35 years Bernie Miklasz has entertained, enlightened, and connected with generations of St. Louis sports fans.
While best known for his voice as the lead sports columnist at the Post-Dispatch for 26 years, Bernie has also written for The Athletic, Dallas Morning News and Baltimore News American. Bernie has hosted radio shows in St. Louis, Dallas, Baltimore and Washington D.C.
Bernie, his wife Kirsten and their cats reside in the Skinker-DeBaliviere neighborhood of St. Louis.