Over the past several years in Major League Baseball, player salaries have risen, and with them, the value of free agent contracts. It seems that every offseason, players whose contracts are up or have become free agent-eligible for the first timed are increasingly hyped.
Teams fight over them, and they are eventually offered deals that will pay them big money well past their primes. Sometimes, they will live up to these contracts for the first few years, but eventually, reality sets in and the numbers drop. However, they continue to get paid like superstars, even when they are average players at best.
The problem is not that these free agents are good players. For the most part, recipients of huge, $100 million plus contracts have been amazing throughout their careers. But once they are free agents, they are often in the middle of or near the end of their primes. Most analysts agree that a player’s best years will occur between the ages of 25 and 32.
This period fluctuates, but the point is that once you reach your mid-thirties, your body begins to break down. The problem is that most players are not eligible to be free agents until their late twenties. Another possibility is that they were been signed to a team-friendly contract early in their careers, one that expires at around their thirtieth birthday.
So, teams sign these types of stars under the assumption that they will continue to perform. However, as they get older, both hitters and pitchers are usually unable to keep up the level of performance that won them huge contracts in the first place. Contracts like this, however — ones that pay for past performance and get little return — continue to be offered.
The way the market is right now, teams compete with each other by increasing the value of contracts. They want to do whatever it takes to have a star play for them. Not only are they hoping to improve, but they also want to attract fans to games and sell jerseys. But in the long-term, these contracts are a hindrance, not a help, to the teams that are responsible for them.
The effect on teams
There are so many recent examples of overpaid free agents, but perhaps no team has experienced this as much as the New York Yankees. The Bronx Bombers have always had deep pockets, and the ability to seemingly throw money at a problem and make it disappear.
After the 2007 season, the Yankees re-signed then-reining MVP Alex Rodriguez to a 10 year, $275 million deal. Rodriguez was widely considered to be the best player in the game, but at 32, he was late into his prime. A-Rod continued to put up big numbers from 2008-2010, but fell off dramatically in 2011. Since then, he has not been the same player. In 2014, the Yankees do not have to pay him, due to his PED-related suspension, but owe him more than $20 million a year from 2015-2017.
In addition to A-Rod, the Yankees have gone on other spending sprees that ended up costing them a few years later. Prior to the 2009 season, the club signed Mark Teixeira, CC Sabathia, and A.J. Burnett to long term deals. All three players were instrumental in helping the Yankees win a World Championship in 2009.
But that World Series victory came at a steep price. The Yankees had to pay about $70 million altogether for A.J. Burnett, who had a 4.79 ERA in three years in New York. Teixeira and Sabathia are still getting paid over $20 million a year through 2016 and 2017, respectively. At this stage in their careers, both are injury prone, and have already seen their best years. Still, the Yankees are stuck paying them superstar money for the next few years.
The Yankees are hardly the only team to hand out unwise contracts. The Detroit Tigers have also made some questionable investments in recent years. They gave first baseman Prince Fielder a 9 year, $214 million contract before the 2012 season, but dodged a bullet by trading him to Texas and only having to pay part of what he is still owed.
Prior to Opening Day in 2013, the Tigers made then-30 year old pitcher Justin Verlander the highest paid pitcher in baseball. Almost on cue, Verlander went from being dominant in 2012, to mediocre in 2013, to dreadful this year.
Finally, before the 2014 season started, Detroit made sure that back-to-back MVP winner Miguel Cabrera would be paid almost $30 million a year until he is 40. Right now, Cabrera is still a great player, but at 31, it is only a matter of time before age takes its toll.
One possible solution
Teams that hand out big contracts might benefit in the short term, but usually suffer later on. The most sensible solution to this seems to be the growing trend of signing players to big deals while they are still young. This strategy has been used for a lot of the game’s brightest stars, like Clayton Kershaw, Freddie Freeman, Mike Trout, and Buster Posey.
Doing so benefits teams in two ways. First, these contracts do not last too long past a player’s prime. Second, teams are able to offer a little less than market value. However, the players also come out ahead because they are getting a lot of guaranteed money earlier in their careers. If they do decline earlier than expected, they’ve already received compensation some might not get to due a poorly timed injury.
There will always be albatross contracts given out in baseball. Star players will never say no to receiving obscene amounts of money, and teams will keep on fighting for the services of said players. But organizations need to be careful about the long term consequences. (Certainly the burden on the salary cap is reason for pause.) Teams should always try to compete, but the point is that sometimes it’s a better idea to build a team around players without such huge monetary risks attached.
Joe Setyon, sports editor of The Collegian at Grove City College, contributes to Three for Ten Sports as a baseball writer.