Rubbing Mud: The Evidence of Price Fixing We Have So Far

Image credit: USA Today Sports

With each passing day now, cries of collusion grow louder. If one free agent of some utility signed every day between now and March 1, there would still be a handful of them left, so any day that doesn’t bring a torrent of news is another step toward the sample size of quacks and waddles being sufficient to call this market a duck. It remains, as ever, extremely unlikely that a smoking gun will eventually be found—that owners and the executives they have hired to run their teams are engaged in open and explicit collusion at all, much less that they have been so foolish as to leave an evidence trail of that. Much more likely, however (and in fact, downright probable, at this point), is an implicit, indirect, frog-in-the-pot form of collusion.

In that light, it’s worth taking a moment to point out that which is obvious, but which might nevertheless go unnoticed if not listed in detail. Addison Reed and Jay Bruce signed free agent deals last week, netting $16.75 million over two years and $39 million over three years, respectively. Reed fits into this winter’s pay scale for relievers in this way:

That’s unusually neat scaling. It’s also notable—and hardly seems likely to be a coincidence—that only the Rockies, with their obvious hurdles to luring free agent pitchers, have given anyone a three-year deal. Again, that doesn’t mean the teams are explicitly conspiring to keep things that way, and in order for them to be called onto the carpet, that’s just what would have to come to light. We know that the suffusion of sabermetric savvy into even the formerly unenlightened corners of the league is driving market valuations for every player into ever narrower bands, and it might even be making it easier for the clubs to slot players who hit the market into a consensus hierarchy, like the one we see above.

Here, meanwhile, is where Bruce fits into the landscape of other deals handed out to starting pitchers and position players, thus far:

This snapshot of a very underdeveloped market doesn’t have the same feeling of curious consensus as the one for relievers did, but it’s the top several deals that stand out. Beyond Carlos Santana, there are three guys (Bruce, Tyler Chatwood, and Zack Cozart) who received almost exactly the same deal. That would be unusual, but not necessarily notable, if this were a normal offseason, or if those actual deals were the only offers reported in that range. Neither thing is true. Alex Cobb is believed to have offers from multiple teams at just 10 percent more than what Chatwood received, right around three years and $42 million.

That helps explain why Cobb hasn’t signed; he’s worth more than that and everyone (including Cobb) knows it. It’s harder to explain, however, that he finds himself in this situation at all. Cobb should have a healthy offer of four years or an annual average value of $16 or $17 million by now, but there are indications that he simply doesn’t. Fellow free agent Lorenzo Cain’s highest offer, I was told by two sources, currently sits only insignificantly higher than those reported Cobb offers. It’s now possible that one of these two players (plus Lance Lynn, Mike Moustakas, and Neil Walker) have to settle for something in that range.

Now we’re getting into something more sinister, even if it’s not something actionable. If there’s a kind of slotting system developing (however implicit it might be), then the owners are distorting the salary structure of the game, using their advancements in analytic intelligence and the new Collective Bargaining Agreement as cover. If good players with widely disparate skill sets and likely aging profiles are taking their talent to the market and finding an eerily similar, lower-than-expected amount of money waiting for them, something bad is going on.

By the time spring training games begin, this could all be behind us. It’s possible (and perhaps this should be highlighted more often) that owners are anticipating the $50 million windfall each will receive sometime in the next 90 days (thanks to the league’s sale of MLB Advanced Media, to Disney) and would prefer not to make their major expenditures until that money pours in. Maybe the Scott Boras effect is stronger than we think. (I already think it’s quite strong, and a better explanation for the state of the market than is generally understood.) If we look around this summer and find that the market never heated up, though, and that the cost of a win on the free agent market has significantly sagged, remember these similar deals and offers and consider that the evidence of price fixing (even if it be passive price fixing) might be stronger than we think.