Something no one can deny: There's plenty of money in baseball
Leaving San Diego at the end of last week’s MLB winter meetings, I bumped into an agent at the airport. The adrenaline surge from a wild, cash-fueled, player-signing bender hadn’t worn off yet. It was a party that no one wanted to end — at least not while the money spigot was flowing like a keg tap at a frat house.
“It was a good week,” the agent said, smiling.
For players, definitely. And it’s shaping up to be a fantastic winter on the salary front. Through Saturday’s late-night signing of Japanese ace Kodai Senga by the Mets to a five-year, $75 million contract, teams already have spent a whopping $2.44 billion on 48 free agents, with the top dozen — headed by Aaron Judge’s nine-year, $360 million contract — pulling in a cool $1.82 billion.
The market trends were all pointing upward. Players across the board were awarded more years and more money than even the rosiest projections predicted. Eight months earlier, the Yankees had offered Judge a seven-year extension worth $213.5 million. On Tuesday night, the Padres reportedly offered him nearly double that, something in the $400 million range, before Hal Steinbrenner’s phone call from Italy closed the deal that kept him in the Bronx.
Padres general manager A.J. Preller, a Huntington Station native, also went big after Trea Turner before the two-time All-Star signed an 11-year, $300 million contract with the Phillies, becoming the first of the free-agent shortstop dominoes to fall. Undeterred, Preller got his man on the final night of the meetings, stunning the Red Sox by grabbing Xander Bogaerts for $280 million over 11 years.
The Padres play in the nation’s 27th-ranked TV market, sandwiched between Pittsburgh and Baltimore, yet relish the opportunity to wage bidding wars against the sport’s Goliaths. Even with this year’s inflation rate, Preller isn’t fazed. He’s accustomed to taking monster swings.
“When we looked at the market, we knew it was going to be really aggressive,” Preller said. “You can just tell — everything’s like a moment in time. A few years ago, when we went after Manny [Machado] and [Bryce] Harper and some of the things we did, there was a lot of chatter about, ‘Hey, it was the right time for the Padres. Should we wait a few more years to be a little more competitive?’ I think at the moment in time, one, they were great players that were right in the prime of their careers. But two, there just weren’t as many teams that, for whatever reason, the competitive cycle that were really involved from that standpoint.
“Right now, I think it’s just kind of the way that it is. Whether it’s ownership, whether it’s teams that fell short in the playoffs, teams that did well in the playoffs, teams that are ready to take a step from maybe a three-, four- or five- year rebuild . . . Almost everybody is looking to advance forward.”
Another contributing factor: the sudden infusion of cash last month from MLB selling its remaining 15% stake of BAMTech — the sport’s streaming platform — to Disney for $900 million, resulting in a $30 million windfall for each team. Of course, there was no guarantee clubs would be investing that money back into players, but the optics certainly work against any teams crying poverty.
Commissioner Rob Manfred was asked about the signing frenzy during Tuesday’s sit-down with the BBWAA.
“The free-agent market’s going to be what it is, right?” he said. “It’s the product of a whole bunch of economic forces and individual decisions by clubs as to what they want to do.
“On the positive side, I think, a week in December where there’s a ton of focus on players and where they’re going to be is a good thing in terms of marketing the game. And on the downside, I think everyone in this room understands that we have a level of revenue disparity in this sport that makes it impossible for some of our markets to compete. It’s some of the numbers we’ve seen. And, you know, that’s not a positive. Just, it’s like everything else in life, there’s good and bad.”
Also driving this bull market for players: Mets owner Steve Cohen, a one-man wrecking ball when it comes to any hope Manfred had of keeping salaries in check. While just about every other owner remains wary of luxury-tax thresholds, Cohen already has plowed through the $293 million top tier — dubbed the “Steve Cohen Tax” — and is sitting on a 2023 payroll valued at roughly $350 million for penalty purposes after Saturday’s signing of Senga. As of now, by those calculations, Cohen would have to pay approximately $80 million in taxes alone, which is more than the payrolls of six teams — the A’s, Pirates, Orioles, Reds, Rays and Royals — and the Mets are likely to add more money to the payroll before this winter is over.
To put that in perspective, MLB established four payroll tiers for the Competitive Balance Tax in last year’s collective bargaining agreement, and the first threshold sits at $233 million for the 2023 season. According to FanGraphs, three other teams are above that mark — the Yankees ($266M), Padres ($255M) and Phillies ($242M).
Speaking of the Yankees, it’s possible that Steinbrenner could be feeling some pressure to spend from across town, something that he didn’t have to worry about during the latter years of the Wilpon Era. Not only did Steinbrenner go above and beyond what he initially earmarked for Judge, but the Yankees also remain a suitor for Carlos Rodon and reportedly have interest in Carlos Correa. Both are Scott Boras clients, so take the over on their projections, with Rodon possibly going as high as seven years, $200 million and Correa certainly in the 10-year, $300-plus-million territory.
“The Steinbrenner family has consistently allowed us to pursue or retain some of the greatest players that are available on a year-in, year-out basis,” general manager Brian Cashman said as the Yankees put the finishing touches on Judge’s contract, the biggest ever handed out by the franchise.
Something to remember: it’s not quite the middle of December. Unlike the other sports, baseball doesn’t have any signing deadlines for free agents, and there are a number of marquee names still on the market. Evidently, plenty of cash, too.