Major Lessons MLB Teams Learned in the 2012-2013 Free Agency, Trade Season

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Major Lessons MLB Teams Learned in the 2012-2013 Free Agency, Trade Season
Victor Decolongon/Getty Images

Every Major League Baseball offseason has its own quirks and peculiarities, but this offseason has been sort of like a Tim Burton movie crossed with a Wes Anderson movie. 

The free-agent market has been greatly altered by new rules in baseball's latest collective-bargaining agreement, and even further by the unwillingness of certain teams to be as aggressive as they usually are. That same reality has impacted the trade market as well.

Elsewhere, the market has had things to say about what kind of players are most in demand these days, as well as things to say about how contracts need to be changed going forward.

This offseason won't necessarily be a model for every offseason to come, but MLB's 30 clubs have been taught some lessons that could have some lasting ramifications.  

 

The Many Complications of Qualifying Offers

The league used to have Type A and Type B free agents to determine draft-pick compensation for when teams lost players to free agency. This system wasn't widely beloved.

MLB's latest CBA came up with a new idea: qualifying offers. Teams would only receive draft picks upon losing players to free agency if they first made said players contract offers worth the average annual value of the top 125 salaries in the league.

The qualifying-offer system has turned out to be a greater inconvenience for players than for teams, as ties to draft-pick compensation have helped depress player salaries.

For example, Nick Swisher ended up with a four-year, $56 million contract when he had been hoping for something more like Jayson Werth's seven-year, $126 million contract. Josh Hamilton had been hoping for seven years and $175 million, but he only got five years and $125 million.

The depression of player salaries is bad news for star players, but good (or at least better) news for teams. Clubs are going to be wary of giving up draft picks to sign star players, but the way in which draft-pick compensation limits a player's negotiating leverage is a fair trade-off. 

Greg Fiume/Getty Images
In a way, Adam LaRoche's big season in 2012 cost him money in free agency.

The system has other potential benefits. The Washington Nationals showed that making a player a qualifying offer can prove useful if a team wants to retain a star player. Adam LaRoche was seeking a three-year deal, but the Nationals retained him for two with an option when a three-year deal didn't materialize on the open market. His market was limited by his ties to compensation.

The system has also helped level the playing field. Swisher's ties to compensation lowered his value to a point where the Cleveland Indians could afford him. Signing him only cost them a second-round pick rather than a first-round pick, as theirs was protected because it was in the top 10 as a result of them having finished with one of the 10 worst records in MLB last year.

Because qualifying offers have complicated matters so much, there's a chance that adjustments will be made. Players could start demanding clauses in their contracts that prohibit their employers from making them qualifying offers when free agency comes.

But until then, the system is going to work in favor of the teams. Clubs that lose free agents after making them qualifying offers will get draft picks, and teams that sign these free agents will be able to get them at relatively discounted prices. 

 

The Red Sox and Yankees Are Lying Low...For Now

In years past the New York Yankees and Boston Red Sox played huge roles in determining the general shape and flow of the offseason. 

This could have been the case once again this year. The Yankees entered the offseason off an embarrassing defeat at the hands of the Detroit Tigers in the ALCS, and they had many spots on their roster that needed upgrading. The Red Sox also had upgrades to make, and they had a ton of money to spend thanks to their August payroll-dump trade with the Los Angeles Dodgers.

As it has turned out, both clubs have been relatively quiet.

The Yankees have spent a lot of money this winter, but they've taken no long-term risks. All but one of the contracts they've handed out have been for one year, and they've preferred to retain players from their 2012 roster rather than switch them out for other players.

Mike Stobe/Getty Images
Hal Steinbrenner is not a chip off the old block.

The message is clear: The old ways of George Steinbrenner are not what today's Yankees are all about. They're going to be more methodical with their spending, and they are very, very serious about getting under the $189 million luxury-tax threshold in 2014.

The Red Sox have been more aggressive this winter, but only to a degree. They had enough money to sign the best free agents on the open market this winter, but they haven't. They've been conservative with their spending, handing out no deals for more than three years or worth more than $40 million.

The message is clear here too. The Red Sox are wary of giving out massive contracts, and understandably so considering how much trouble they got into with the contracts they gave John Lackey, Carl Crawford and Adrian Gonzalez. 

The Yankees and the Red Sox may get back to their old ways eventually. The Yankees will have their luxury-tax status reset if they get their payroll under $189 million in 2014, which could result in them owning the free-agent market again. The Red Sox could be more willing to take risks on big contracts once they've already loaded their roster with young talent from their stacked minor league system.

However, it may take a few years for the Yankees and Red Sox to return to normal. The rest of the league has seen this, and the trade and free-agent markets have been shaped accordingly. 

 

When Boston and New York Lie Low, It's Open Season

With the Yankees going cheap and the Red Sox petrified of big contracts, it's like two bullies have left the offseason playground, allowing everyone else to come out and play.

The reluctance of the Yankees and Red Sox to spend big allowed other teams to dictate the prices for the best players. Southern California was the happening place, as the Dodgers handed out the offseason's biggest contract to Zack Greinke and the Los Angeles Angels picked up where they left off last winter and gave Hamilton the offseason's second-biggest contract.

The three biggest contracts next to those were handed out by the Tigers, Braves and Indians. The Braves and Indians may not have been able to join that list in years past, as the free agents they signed could have either signed with the Yankees or Red Sox or used them as a means to jack their prices up beyond Atlanta's and Cleveland's means.

Elsewhere, the Nationals can thank the Red Sox for playing a part in them bringing LaRoche back at a discounted price. The Red Sox had talks with him once Mike Napoli's contract was put in limbo due to health concerns, but they didn't want to meet LaRoche's asking price.

The more fascinating developments, however, have been on the trade market.

Tom Szczerbowski/Getty Images
The Blue Jays sensed blood in the water this winter.

The Toronto Blue Jays made giant trades with the Miami Marlins and New York Mets that turned them into the AL East's most talented team. Among the players they've acquired are Cy Young winner R.A. Dickey, All-Star shortstop Jose Reyes and innings-eating machine Mark Buehrle.

The Jays had to dissolve what was a very strong farm system to make these deals, but Jeff Passan of Yahoo! Sports had the right of it when he wrote in December that the timing for the Jays to be bold is perfect. The division is ripe for the taking, and the Jays clearly aim to take it.

The play-it-safe modes the Red Sox and Yankees have gone into also played a part in Atlanta's recent acquisition of Justin Upton. The Red Sox were never a serious bidder for Upton even though they had the prospects to get him and a need for him in their outfield, and the Yankees were reluctant to make a play on him as well.

Mike Morse slipped past the Red Sox and Yankees as well. Both teams were reported to be interested in Morse, but neither anted up for him, and he ultimately went to Seattle.

The Red Sox passed on slugging prospect Wil Myers as well. They talked about a potential swap for Jon Lester, but they didn't get in Tampa Bay's way of acquiring Myers from the Kansas City Royals.

This isn't going to be the status quo forever. But for as long as the Red Sox and Yankees aren't making blockbuster deals, the doors are going to be open for other teams to make them instead.

This trend could very well continue next offseason, as the Yankees will be looking at having their lowest payroll in years and the Red Sox will still be honoring the contracts they signed this winter. Neither club could be very aggressive, in which case it will be open season once again.

 

Need a Pitcher? It'll Cost You.

The prices for pitchers skyrocketed this winter, and skill mattered little in the grand scheme of things.

Greinke, a pitcher with a 3.77 career ERA, is now the richest right-hander in the game after signing a six-year, $147 million contract with the Dodgers. Anibal Sanchez, a pitcher with a 3.75 career ERA who has never pitched more than 200 innings in a season, got $80 million from the Tigers. Edwin Jackson, a pitcher with a 4.40 career ERA and 1.44 career WHIP, got over $50 million from the Cubs.

Gary A. Vasquez-USA TODAY Sports
Fun Fact: Brandon League is not worth more than $20 million.

Relievers got in on the fun too. Brandon League has had one very successful season as a closer, but he got a three-year contract worth over $20 million from the Dodgers. Jonathan Broxton's best days are in the past, but that didn't stop him from getting a similar contract from the Cincinnati Reds.

It certainly helped that none of the above pitchers were tied to draft-pick compensation. Kyle Lohse is tied to draft-pick compensation, and he still hasn't signed. Rafael Soriano was tied to draft-pick compensation, and that may have been the difference between him getting three guaranteed years and the two guaranteed years he ended up getting from the Nationals.

But the high prices for pitchers this winter are also a sign of the times. As you may have noticed, MLB has become a pitcher's league. 

As recently as 2006, the league's ERA was over 4.50. It began declining steadily after that, eventually falling all the way to 4.08 in 2010 and 3.94 in 2011. It increased only slightly to 4.01 this year.

Beating the other guy is no longer a matter of having more powerful sluggers. It's now a matter of having better arms, and the league's pitchers are reaping the benefits.

There is a correlation between the decline of offense and MLB's increasingly strict PED policies, a clear indication that hitters are now on the same level as pitchers. If so, pitchers should continue the success they've had the last three years, in which case they'll continue to be in demand.

And in all honesty, we haven't seen anything yet. Clayton Kershaw, Felix Hernandez and Justin Verlander are all due to hit free agency in two years. Just wait until they get paid.

 

Shorter Contracts Are Better

There have been some expensive contracts handed out this winter, as there always are. And with more and more TV money being pumped into the game, this isn't likely to change.

What's different about this winter is that the contracts have been shorter than usual. The longest free-agent contract handed out was Greinke's six-year deal. Nobody else got a contract longer than five.

Last winter, there were two contracts signed that were for more than six years, going to Albert Pujols (10 years) and Prince Fielder (nine years). The year before, Carl Crawford and Jayson Werth both signed seven-year deals.

A couple different factors have been at play this winter. Again, the new qualifying offer system has helped keep contracts down. Age has played a part as well, as relatively few young stars worthy of mega-deals in the seven-plus-year range hit the market.

Victor Decolongon/Getty Images
In a past winter, Hamilton may have gotten the seven years he was supposedly seeking.

However, age hasn't scared teams away in the past. Pujols got his 10-year deal after his age-31 season, and Werth got his seven-year deal after his age-31 season. Hamilton could only get five years after his 31-year-old season, and Swisher got only four years after his 31-year-old season.

Draft-pick compensation played a part in their situations, but that excuse doesn't apply to Greinke and Upton. Greinke may have been in line for more than six years in a past winter coming off his age-28 season, and Upton may have been in line for more than five years coming off his age-27 season.

The shorter contracts handed out this offseason may be partially the result of a market correction. Longer contracts may have been withheld because of what's happened with recent long contracts.

Crawford and Werth both turned out to be busts, and Pujols' 10-year deal with the Angels is off to an iffy start. If he doesn't pick things up, the 10-year contract he signed after his age-31 season could go the same way as the 10-year contract Alex Rodriguez signed after his age-31 season in 2007.

In other words, teams know better than ever before how risky long-term contracts are. It may be a while before we see another contract in the seven-to-10-year range that isn't an extension.

 

Note: Stats courtesy of Baseball-Reference.com. Salary information courtesy of Cot's Baseball Contracts

 

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