In the wake of the Fowler spinaround, a look at the deleterious effects and simplest solutions to our collective qualifying offer problem.
Let’s start with the notion that it’d probably be for the best if free agent compensation, and for that matter, the draft itself, were eliminated entirely. Let’s then accept the notion that the latter might not ever happen, and the former is at minimum a major bargaining chip in any CBA talks.
What seems likely to happen, if anything, is some modification to the existing system of compensation for signing and/or losing free agents, because the current system isn’t tenable. On the one hand, it’s working in ownership’s favor on the whole: Suppressing salaries is the name of the game when it comes to free agent compensation, and we’ve seen Howie Kendrick and Dexter Fowler settle for below-market deals to return to the team that wouldn’t lose a draft pick by signing them. While someone gets left out in the cold every year, we’ve seen Diamondbacks’ GM Dave Stewart admit that the Diamondbacks were reluctant to give up their second pick (37th overall at the time), even if they were getting a major-league upgrade in the process. This process seemed to repeat itself in Baltimore with Fowler.
Contrary to conventional wisdom, it appears that clubs are less likely to punt on a given draft by signing multiple QO’d players and absorbing the losses of several rounds of picks than to space out those losses over several years, deciding when and where to lose a first-round pick. It appears, based on their actions and words, that clubs are intensely valuing not just the picks that they speak of but, more accurately, the slot money associated with those picks.
The Pirates' pitching guru is a free agent next winter, while an AL East team wants to ship Andrew Cashner across the country.
Ray Searage wants to stay with Pirates beyond 2016
Next offseason’s free agent pitching market might pale in comparison to the bonanza that teams were treated to over the past couple of months, but the market for pitching coaches could feature a marquee name.
Ron Cook of the Pittsburgh Post-Gazette wrote Sunday about the value of the Bucs’ pitching coach, Ray Searage, who is widely regarded as one of the game’s best teachers, able to extract maximum value out of arms who come to the Steel City with middling reputations. General manager Neal Huntington is able to rummage through the bargain bin, confident that every pitcher he finds will exceed expectations because, as Cook put it, “Ray will make him better.” But Huntington is only guaranteed that comfort for one more year, because Searage’s contract expires at the end of the 2016 season.
As you may know, the Nationals and Baltimore Orioles have been engaged in a long-standing dispute over television rights fees through Mid-Atlantic Sports Network (MASN), the exclusive local broadcast network of both teams. The Orioles own a 90 percent interest in MASN, whose broadcast rights were conferred as part of the relocation of the Montreal Expos to Washington. The agreement set the value of the Nationals’ television rights for 2006-2011 and provided that the Orioles, Nationals and MASN must negotiate in good faith to determine the amount of the Nationals’ rights fee after the 2011 season for the next five seasons. Not surprisingly, in 2012 the parties could not reach an agreement and the dispute went to arbitration in front of MLB’s three-member Revenue Sharing Definitions Committee (RSDC).
Though the hearing took place in April 2012, the RSDC Panel did not render a decision until June 30, 2014, in an apparent attempt to encourage the parties to settle. In the interim the Nationals were forced to play multiple seasons while receiving local television revenue well below fair market value as determined by the panel (not to mention the value the Nationals might receive on the open market with its own network). When the RSDC Panel finally disclosed its award, it set the rights fee for the 2012 season at approximately $53 million with built-in annual increases, a figure in between the parties’ submissions.
The Orioles, unsatisfied with the result of the arbitration, filed a lawsuit in New York state court requesting the court stay enforcement of the arbitration and overturn the panel’s decision. After initially granting the stay of enforcement, a New York state courtvacated the arbitration on November 4, 2015, finding that the arbitration was not sufficiently neutral. Specifically, the court determined that the Nationals’ retention of the Proskauer Rose law firm as counsel constituted “evident partiality” because the firm had often served as counsel to MLB and several franchises. In fact, Proskauer acted as counsel in other matters for the Pirates, Rays and Mets, whose owners made up the three members of the RSDC Panel. But as is generally the case in hotly contested legal disputes, this decision is far from the end of the matter.
There are a number of interesting aspects of this decision, the first being that the court was willing to vacate the arbitration. A federal or state court overturning an arbitration award is quite rare (some studies peg the rate at which arbitrations are upheld at around 90 percent). The Supreme Court has consistently demonstrated a strong preference for arbitration, so much so that generally arbitrations can only be nullified by the courts for fraud or severe structural and procedural unfairness. A decision that is “wrong” or “incorrect” is almost always upheld in court provided that the process was fair.
But the court made a series of other findings likely to be relevant in further proceedings: 1) that there was no fraud or conspiracy by MLB in favor of the Nationals, 2) that the RSDC applied a reasonable methodology that was sufficiently supported in determining the size of the award, 3) that there was no misconduct by MLB in providing support to the arbitration, including the involvement of now Commissioner Rob Manfred; and 4) that a $25 million loan from MLB to the Nationals to advance the difference in televisions rights fees did not defeat the panel’s impartiality.
How players and teams have landed on the same contract wish.
Nominally, Chris Davis got the deal he and Scott Boras set out for this winter—seven years, and a higher annual average value than any free-agent position player had gotten this winter. The contract he signed with the Orioles will be consistently reported at $161 million. It’s not really worth that much, though. Over a quarter of the money Davis will get, he’ll get after the end of his deal, in 15 annual payments that begin in 2023. It’s still a fine deal for Davis. Davis’ kids will still be rich, and his grandkids will still be rich, and their kids will still be well on their way to rich before they lift a finger. When a contract essentially guarantees generational wealth, it doesn’t matter a great deal if it takes most of a generation for that wealth to arrive in full.
This is a really common thread among high-profile free-agent deals this winter. Jason Heyward will receive $20 million of his $184 million in four equal installments, starting in 2024 (although in truth, Heyward is going to opt out after year three of his deal, at which point that deferral ends). Over 30 percent of Zack Greinke’s $206.5 million payday with the Diamondbacks will be paid in the five years after his deal ends.
In 2015, 137 pitchers threw at least 48 2/3 innings in relief. Of those 137 pitchers, Fernando Rodney was 134th in terms of RE24[i] , pitching roughly 10 runs worse than the average reliever in baseball. Despite being objectively awful, Rodney had the 11th highest inLI—the leverage of the situation when he entered—of those same 137 relievers. Rodney notched 16 saves as the Mariners closer before ending up in Chicago, where he was surprisingly dominant for a handful of innings at the end of the year. But in Seattle, Rodney’s track record and closer job title garnered him plenty of high-leverage innings despite his being one of the worst possible options to pitch them.
Luckily, Rodney didn’t lead the team in inLI. That honor goes to Carson Smith, whose 2.11 inLI was actually the highest in baseball among qualifying relievers. Smith was a much more worthy recipient of those pivotal innings as he posted an 11.7 RE24, making him one of the better relief pitchers in the game last season.
The winter meetings start today, and besides preparing for that I’ve had a lot going on: K-Rod was traded, so Jeremy Jeffress is in the mix to be the closer in Milwaukee; Seth Lugo was added to the 40-man roster, and Carlos Asuaje was part of the Craig Kimbrel deal. I had three free agents signed (Jiwan James, Jaye Chapman, and Jim Miller). Which is all to say I haven’t had much time to write, but sometimes the topics write themselves. This one is about Steve Clevenger and the week he has had.
The Nationals and Orioles go into the Winter Meetings with very different outlooks, but both might be looking to make a grand gesture.
Heading into the Winter Meetings, the two teams I can’t help looking at over and over are the mystery men of the MASN market. The Orioles and Nationals are in fascinating positions. Going into the offseason, I was ready to push for Baltimore to begin a rebuild in earnest, while touting the Nationals as perhaps the non-division winner most likely to win their division in 2016. So far, though, a strange break and a few bizarre decisions have pushed the two teams toward each other, in a number of ways.
Both teams, of course, are built around a total superstar with three years of team control remaining, but the similarities between them roughly end there. The Nationals remain a deep organization, ready to plug the departures of Jordan Zimmermann, Doug Fister, Denard Span, and Ian Desmond this winter with the likes of A.J. Cole, Joe Ross, Michael Taylor, and Trea Turner, and with more talent on the horizon. The Orioles’ farm system is so thin that they dealt for Mark Trumbo (at an anticipated price tag of $9 million or so) instead of waiting to see whether they could re-sign Chris Davis. In addition to Davis, Baltimore will bid adieu to Wei-Yin Chen this winter, and six weeks ago, they looked poised to really clean up. Davis and Chen will both bring the Orioles sandwich-round picks after the first round, and they figured they would be able to claim a third after they made Matt Wieters a qualifying offer in the first week of November. There was at least some argument that they ought to have given Darren O’Day one of those, too, but they elected not to.