<
>

Passan: Huge contracts and big concerns. What's going on with MLB salaries?

play
Harper feels at home in Philly, excited for series in D.C. (1:55)

Bryce Harper discusses the intricate handshake routine he has developed with his teammates and returning to D.C. to play the Nationals on Tuesday. (1:55)

With Boston Red Sox shortstop Xander Bogaerts agreeing Sunday to the 10th deal of $100 million or more in the past six weeks, Major League Baseball crossed what would have been an unthinkable threshold at the start of spring training. In the five months since free agency began, teams have committed around $4 billion in future salaries to players. Never, over any similar stretch in the game's history, have players been lavished with such riches.

If this is confusing, that's understandable. The players, remember, spent the early portion of spring training spewing anger over the lack of spending. Since then, members of the MLB Players Association have received a guaranteed $2.5 billion. The simplistic takeaway is that the players' panic this offseason was for naught, that so long as MLB is funneling more money to them than ever, the hysteria over spending is overblown.

This is only half-true. Teams can guarantee GDP-sized amounts of money, and players can harbor understandable anger over the current state of affairs simultaneously. They're completely different subjects and should be separated accordingly.

Why? The best way to answer is through the lessons learned the past five months. Some are classics. Others are new. The most prominent, as the first weekend of the season illustrated, is ...

1. The best players run the sport.

Here's lookin' at you, Bryce Harper. And you, too, Mike Trout. And Manny Machado and Nolan Arenado and Chris Sale and Patrick Corbin and Jacob deGrom and Bogaerts and Paul Goldschmidt and Alex Bregman. The 10 players with nine-figure deals have received a combined guarantee this winter of more than $2.11 billion.

Now, consider: ESPN Stats & Information pegged free-agent spending this winter at $1.89 billion and total spending at $3.99 billion. MLB's internal calculations have $1.82 billion to free agents and $4.02 billion total, with the differences owed to adjustments on deferred money and other accounting disparities. Although the union's figures were not immediately available, one official said free-agent spending of nearly $2 billion and total spending approaching $4 billion was accurate.

That means more than half the money spent this winter went to 10 players. Baseball has long been lurching toward a bifurcated system -- almost a sporting oligarchy -- in which there's a small number of ultra-rich, a large group of underpaid players and a middle class that doesn't really exist anymore. These megadeals do not trickle down to the so-called middle class -- players who are aging or simply aren't viewed by teams as good investments -- and leave a union that fears the withering away of a once-robust segment of the market could portend something worse.

It's what makes the run on extensions so polarizing. A number of people on all sides -- MLB, the MLBPA, players, front-office officials and agents -- agree that the majority have been at fair-market value and were reasonable for players to accept, even if they mean forgoing free agency. Others, mostly agents and players who are free-agent hardliners, have abhorred a number of the deals. They see the amount by which a majority of teams in baseball are under the luxury-tax threshold: more than $50 million. They believe the revenue flowing in the game is disproportionately going toward teams. They cannot understand why amid what they believe is an attack on free agency, players would become willing co-conspirators by signing extensions that by their nature dilute the potential impact of free agency.

It is especially painful when it comes to position players because if this winter established anything, it's that ...

2. Everyday stars are worth, at minimum, a quarter-billion dollars.

Trout got upward of $430 million, Harper $330 million, Machado $300 million and Arenado $260 million. That's the market. If you play every day, you're great and you're in your 20s, you're going to get at least $250 million.

All eyes are on Boston star Mookie Betts -- and the Red Sox's continued spending has made his future awfully interesting. The Red Sox are smashing through the luxury-tax threshold for the second consecutive year. If they exceed it in 2020, they will pay at least a 50 percent tax on every dollar over $208 million.

Right now, David Price, Chris Sale, Nathan Eovaldi, Dustin Pedroia, Christian Vazquez and Bogaerts -- 60 percent of Boston's rotation and three up-the-middle players -- will cost $111.87 million. That gives Boston less than $100 million to spend on its arbitration-eligible players (who figure to cost somewhere in the $60 million range), re-sign J.D. Martinez (who can opt out of his deal) and replace Rick Porcello, Mitch Moreland, Steve Pearce and Brock Holt (all of whom have expiring contracts).

This becomes even harder if they want to sign Betts long term -- and makes that long-term deal for him even costlier than it already will be. Betts is on track to earn somewhere in the neighborhood of $30 million in arbitration next offseason. A long-term deal for him almost assuredly would pay him more per year than that, which means the Red Sox could be penalized for locking up their franchise player.

It's the sort of thing that makes the Red Sox wish Betts had considered accepting a long-term deal earlier in his career. As every team recognizes ...

3. Players can lose significant money in pre-arbitration deals.

When the Milwaukee Brewers traded for Christian Yelich a little more than a year ago, they weren't simply trading for a 26-year-old outfielder who was ever on the cusp of a breakout season. They were trading for his contract, too.

When he was 23 and had slightly more than a year of major league service, Yelich signed a seven-year contract extension with a club option for the eighth season. Had he not agreed to that deal, Yelich would have been a free agent after this season, hitting the market as a 27-year-old with a National League MVP award from 2018 and an apparent desire to repeat, considering he's now the sixth player to hit a home run in his first four games of the season.

Christian Yelich, free agent following the 2019 season, gets $300 million.

Christian Yelich, signed through 2022, will receive $9.75 million this year, $12.5 million next year, $14 million in 2021 and $15 million on the club option in 2022. He will reach free agency at 30, which, all things considered, is not terrible. If he's anything like he is now, he should be able to cash in once more. But he'd better still be a star. Because ...

4. You need to be great to get paid deep into your 30s these days.

There has been strong praise for Goldschmidt's five-year, $130 million extension with St. Louis -- namely because, as one agent said, "Who gets five years at 32 anymore?" Goldschmidt isn't quite there yet -- he turns 32 in September -- but remember: J.D. Martinez got $110 million at 30, and Yoenis Cespedes $110 million at 31. Chris Davis got what has clearly become a bottom-five-of-all-time deal at 30, for seven years and $161 million.

Cespedes, Davis and the worst before that, Robinson Cano's 10-year, $240 million anchor, helped spur this era of austerity. It's not just them, either.

5. There are plenty of examples of why not to pay guys into their 30s.

Like Yu Darvish. He was 31 when the Chicago Cubs gave him $126 million over six years last offseason. He spent most of the season injured, returned this spring reinvigorated and walked seven hitters in his first start. Now, it is too early to start saying he wasn't worth $126 million. But it's not too early to start thinking of where he might fit on a bad-contract list.

It's odd, too, because so many long-term pitching contracts have gone well: Max Scherzer, Zack Greinke, Justin Verlander, CC Sabathia, Cole Hamels and, yes, Jon Lester with the Cubs. That's part of what made the Mets comfortable with deGrom, the Nationals with Corbin, the Red Sox with Sale, even if there are red flags. Such as ...

6. Get paid at your peak.

Jacob deGrom turned one of the greatest pitching seasons ever into an extension the Mets simply didn't need to give him. Yes, there was the pressure, internally and externally, to make deGrom a Met for life. It was also true that New York controlled deGrom for the 2019 and 2020 seasons without an extension, which means the team took on a pretty handy amount of risk compared to the reward of keeping him.

It's true, likewise, that deGrom might have left some money on the table. But the likelihood of him matching or coming anywhere close to matching a 1.70 ERA -- well, it's not very high, no matter how good he is, and he is really good. When there's a heavy bit of public relations in a move, compounding it with the fact that the player is coming off one of the best seasons of all time tends to work in the player's favor.

It leaves the union with another success story that seemingly contradicts one fact that is hard to digest ...

7. With all this money being spent, average salaries still can go down.

It's true. As of right now, the average salary in baseball has dropped for a second consecutive year. Now, it's a slight drop and one that both the league and union acknowledge has some accounting oddities that might explain it.

In extension-heavy years, large chunks of money tend to get lost in the average-payroll report from the league. For example: Harper's deal will pay him around $26 million a year, but for average-salary purposes, it's counted as $11.5 million because the signing bonus enriching him now will be prorated over the length of the contract. Machado is at $12 million and deGrom at $9.5 million for the same reason. The $40 million missing there -- it's about $50,000 more per player.

That, of course, doesn't make the situation any better for many of the rank-and-file players who bear the brunt of the game's paradigm shift. They see industry revenue growing ... and players' salaries not growing accordingly. MLB continues to say the growth is similar, with teams now spending 55 percent of revenue on major league and minor league players. Others are exceedingly skeptical of both numbers and believe the revenue number the league uses ($9.4 billion a year) is well short of the widely believed $10 billion-plus number.

It's little solace to those who feel underpaid or are unemployed. There are plenty of the latter still: Jose Bautista, Evan Gattis, Matt Holliday, Edwin Jackson, Ryan Madson, Logan Morrison, James Shields, Denard Span and more. The lesson here is a brutal one ...

8. Only those with age, positional value and excellence can wait out the market.

It's not just the group above. Craig Kimbrel, the best closer of the past half-decade, doesn't have a job. Neither does Dallas Keuchel, a consistently good starting pitcher who in 2015 won a Cy Young Award.

Well, Kimbrel is 30, plays a volatile position and asked for more money than any team was willing to give. Over time, he awaited desperation. April fools?

Keuchel is 31. His market is starting to move. He has met with teams. Fear about long-term health remains an impediment. So does the likelihood that Keuchel won't be ready to pitch in any meaningful games for weeks, no matter how much he has been working out.

When one official was asked to consider the state of affairs after $4 billion -- $500 million more than any past offseason -- was guaranteed to players, he said, "How good can things be when two of the top 10 free agents are still unsigned and Opening Day has passed? What about when two premier free agents don't sign until March and don't have many suitors when they do?" It's why ...

9. Patience is a virtue ... to a point.

Take Gerrit Cole. He knows patience. He turned down the New York Yankees out of high school, went No. 1 overall in the draft and has not signed a contract extension. He's due to hit free agency at 29 years old with ace-type stuff. He could've signed a deal after his second or third year or even his fourth, but he waited. If he finishes the year competitive and healthy, Cole is going to be a $200 million pitcher.

It's not just his overall résumé. Look at the market. At one point, the free-agent class of 2019-20 was supposed to include Arenado, Sale, Bogaerts, Goldschmidt, Verlander, Aaron Hicks and Miles Mikolas. All signed extensions since spring training started. The once-daunting free-agent class this coming winter now consists of Anthony Rendon, J.D. Martinez, Madison Bumgarner, Khris Davis, Zack Wheeler, Marcell Ozuna and Josh Donaldson. That's, uh, not quite the same. And it's certainly not the sort of thing that leads to more extensions for top guys because ...

10. The best players run the sport.

"What the extensions showed," one longtime official said, "and what Machado and Harper ultimately showed is there's a lot of money in the industry. Clubs are prepared to spend it. They're just not prepared to spend it on guys who their analytics show are not likely to be very productive for much of the future."

That's about right. The effect has been enormous too, because when younger players especially sign free-agent deals, that's where the trickle-down effect does happen. Players, including Betts and Arenado, have made significant strides in arbitration, to the point that one agent said, "The most wage growth happening for the players right now is in arbitration. That's where we should be fighting all of this."

It's understandable why they don't. It's risky. Tens of millions of dollars -- or, in some cases, hundreds of millions -- is a lot to turn down. Teams recognize that sometimes all it takes is a desperate agent or poorly educated player to get a deal done. Things aren't entirely stacked against them, but the willpower to turn down the guarantee is often immense.

It all makes 2021-22 so interesting. The last time we looked a few years ahead to free agency was to 2018-19. This free-agent class, it turns out, was a dud compared to what it was supposed to be -- and even to the extension class. The winter of '21, on the other hand, has the cornucopia of shortstops: Francisco Lindor, Javier Baez, Carlos Correa, Corey Seager and Trevor Story, plus Kris Bryant, Anthony Rizzo, Freddie Freeman, Noah Syndergaard and Max Scherzer. It's quite the top 10. It's one that could challenge the $2 billion this offseason's best created.

Even more fascinating is the expiration of the collective bargaining agreement in December 2021, which could completely change the game's economics once again. Remember, it can happen quickly. Six weeks ago, the storyline focused on the teams' lack of spending. Now, $2.5 billion later, $4 billion total this offseason, the biggest shopping spree in baseball history is nearing its end, and there's still plenty of money to be spent.