Baseball Economics and where are salaries going? Re: Freeman Extension

[TDotttt2005]

Not sure if I'm alone in this, but I am floored by the Freeman contract. When you see the long-term, big money deals for guys like Cano, Verlander, Kershaw, etc. you knew it was coming, and its understandable because these guys are the best in the game, and have been so for years, so its not really telling about where salaries are going, as these guys are 'one-off' exceptions.

 

What is very telling to me on where salaries are going is the Freeman contract. $135mil over 8 years, ~$17mil AAV. Not crazy on the surface, but with 3 seasons left of control?? Thinking is when you sign these extensions is that you pay a little more over the arbitration-eligible control years, in return for a projected 'bargain' over the free agent years that the extension covers. If that thinking holds true, how much inflation must the Braves be expecting if they are willing to do this deal????

 

Freeman asked for 5.5mil in Arb this year. Say he got 5. Say in 2015 he gets 10. Say, somehow, in his last year of arbitration, 2016, he gets 15. 30mil/3 years. Thats 105mil over the 5 remaining 'bought out' free agent years, or $21 mil AAV. Putting the huge performance projection risk aside, if the Braves, who by most accounts are a highly thought of front office, are thinking that $21 million a year for Freeman, starting in 2017, is a bargain, then them and other teams must be thinking that salary inflation is going to kick in BIG TIME. Then when you add in the perceived 'discount' you'd have to apply for performance projection risk...then it really is telling.

 

I've posted before about all of the new TV money that is coming into the sport through RSN's and the national deals...but I think no recent contract is as telling as this Freeman deal, as to how much more money the owners will have to spend in the coming years.

[Angrioter]

Baseball is one of the sports with the highest income. The distribution of money between owners and players isn't the best yet.

[NorthOf49]

This contract was a little excessive IMO. Freeman isn't the type of guy you can build a team around. Decent but not great.

 

In recent years the % of revenue devoted to the players has decreased, it's well below 50% (which is what other sports strive for) if I remember correctly. So it's not like owners are actually dishing out obscene amounts, it just seems like that on the surface.

[TDotttt2005]

Agreed. I dont think this says anything about the distributions of income within the sport. The pie is still being cut up in the same proportion, but the reality is that the size of the entire pie is growing. This contract, although I agree is excessive, shows just how much they are projecting that pie to grow.

[Candy Maldonado]

The real question is what do players get paid to do?

[Brenner]

Freeman contract was a calculated risk by Atlanta. If they waited another year they could have been looking at buying out his FA years at $30 mil instead of $22 or whatever it was here. With the amount of young talent they have they wanted long-term certainty on some. So they locked in Freeman long-term, and taking a wait and see approach with Heyward. Heyward is kinda boom or bust compared to Freeman. With Freeman you just need to keep getting these same type of years from him and the contract is fine. Going short-term on Heyward could backfire, he has higher a higher ceiling than Freeman just needs more consistency.

[z3r0s]

I don't think this is a strange contract at all. When you are team with a payroll in the range of Atlanta you have to take greater risks by locking players up earlier than you would ideally like. Getting Freeman for 16.875M yearly will be a steal during the FA years if he keeps producing in the 3.5-4.5 WAR range. They have no chance of locking him up if they wait until he has less control.

 

You have to take these kinds of risks when you play with that payroll range. And you can't afford to miss on too many of them.

[TDotttt2005]

From a Jays aspect, theyre taking the similar risk with Rasmus, albeit with 1-year left, not 2 like Heyward. Further from a Jays aspect, how crazy is it that Freeman in his 1st arb year is making more (AAV) than Bautista and almost double what Edwin is making. Shows you just how far salaries have inflated in just 2-3 years.

[xposbrad]

You're forgetting the time value increase of money as well. Maybe not much but it's still a factor. But, he was always considered a high prospect in their system, he's developed and now they don't have to worry about him hitting FA for a while. I don't think it's a bad deal at all, in 3 years if he hit FA, 21m might be a low number for him, considering he'd be like still 27. There would be a huge bidding war for him. He's been pretty cluth, he hit a ridiculous number with RISP. I think it's a fair for both sides. I know you're looking at the 17aav number, but they lock up his best seasons. He's not 32, they have him in his prime.

[jaysfan2014]

And expect many teams to follow Atlanta's example with young players, as teams try to lock up young players in their prime, and prevent them from going to big market teams like the Yankees, forcing those teams to actually have to develop talent.

 

Atlanta's had a strong system for a while.. but while Freeman gets 8 years, Heyward will likely hit free agency in 2016, and Kimbrel will likely be traded this season or next, as his salary will get too excessive for the Braves, a small/mid market club, to pay. Until the Braves get a better TV deal, their new stadium and better attendance, they'll have to develop their team like the Rays.

 

Rays did a similar thing with Longoria, like the Braves did with Freeman, BTW.

[thatcher]

Anyone else think it's ridiculous that baseball players are the highest paid athletes??

[Brenner]

Anyone else think it's ridiculous that baseball players are the highest paid athletes??

 

I don't, when comparing them to other professional athletes they generate the most media content. Not sure on what grounds they would deserve less share of that then any other league.

[The Cats Ass]

They also play the most games. And I bet they put in the most practice and work. They may get off what, 3 months a year?

 

I think all professional athletes are overpaid.

[Abomination]

They also play the most games. And I bet they put in the most practice and work. They may get off what, 3 months a year?

 

I think all professional athletes are overpaid.

 

They may be, but when you look at high paying jobs in some other sectors (some CEO's for example where it can be more important who you know as opposed to your actual ability) it makes things seem a little less objectionable. At least you can say that professional athletes ARE the best at what they do.