The Guide To Handling Superstar Free Agents: Let 'Em Walk
By Andrew Perna
Last offseason, Major League Baseball saw more than $1.3 billion spent on free agents, with three players signing nine-figure contracts. Those three (Albert Pujols, Prince Fielder and Jose Reyes) accounted for nearly 42% of the money spent, significant chunks of cash allocated for a 32-year-old, a pudgy power hitter and an injury-prone infielder.
Pujols, Fielder and Reyes are essentially The One Percent of the Major Leagues.
The trio, along with C.J. Wilson, who received the fourth-largest contract last winter, has something else in common besides bloated bank accounts. They all switched teams.
If you look back to the winter following the 2010 season, you'll see a trend. The five-highest paid free agents all changed jerseys. Carl Crawford ($142 million), Jayson Werth ($126 million), Cliff Lee ($120 million), Adrian Beltre ($96 million) and Adam Dunn ($56 million) accounted for 41.5% of the $1.3 billion that was spent.
Over the last five years, a lot of money has been thrown around and most of it goes to superstar players and comes from new teams. We addressed the 2010 and '11 offseasons above, but here is how the figures looked in the four previous years:
2009: A relatively low amount was spent ($846 million) thanks to a weak free agent class. Matt Holliday was given $106 million to stay with the Cardinals, but 18 of the 20 players that received a contract worth a total of $10 million or more signed up to play for a new team. The six highest-paid free agents (Holliday, John Lackey, Jason Bay, Chone Figgins, Aroldis Chapman and Randy Wolf) account for nearly 40% of the money spent.
2008: With the Yankees preparing for a 2009 World Series win, they increased the market on a trio of players. $1.16 billion was spent with the Yankees issuing the three largest deals. Mark Teixeira ($180 million), CC Sabathia ($161 million) and A.J. Burnett ($82.5 million) took the money and ran from the Angels, Brewers and Blue Jays, respectively. Seven of the 10 largest deals that winter went to players that changed addresses. The Yankees trio, along with Derek Lowe, who signed a $60 million deal with the Braves, accounted for 43% of the cash spent on free agents.
2007: $1.06 million was spent following the 2007 season and more than a quarter of that went to a single player. The Yankees re-signed Alex Rodriguez to a 10-year, $275 million deal that is now causing them to bang their heads against the wall. Over the last six offseasons the highest-paid player re-signed with his then-current employer only twice (Rodriguez in '07 and Holliday in '09). Six of the 10 highest-paid players from this offseason changed teams. The Yankees re-signed Rodriguez, Jorge Posada and Mariano Rivera and the Red Sox held onto Mike Lowell. Four players received deals worth more than $50 million in total (Rodriguez, Torii Hunter, Aaron Rowand and Posada). They accounted for nearly 45% of the money spent.
2006: This is our stopping point and it's quite an end. More than $1.6 billion was spent between the 2006 and '07 seasons thanks to three deals of at least $100 million. The top three earners, Alfonso Soriano ($136 million), Barry Zito ($126 million) and Carlos Lee ($100 million) all changed teams. Of the 10 largest contracts, only one was given to a player by his incumbent club. The Cubs re-signed Aramis Ramirez to a five-year, $75 million deal. Eight players were paid more than $50 million in total and they accounted for just over 40% of the money that changed hands. This was a good year to be on the open market.
Now that we've looked at each of the last six offseasons, let's look at all players that received a contract worth $50 million or more over that period. Players that re-signed are in italics.
- Alex Rodriguez, NYY to NYY, $275,000,000
- Albert Pujols, STL to LAA, $250,000,000
- Prince Fielder, MIL to DET, $214,000,000
- Mark Teixeira, LAA to NYY, $180,000,000
- CC Sabathia, MIL to NYY, $161,000,000
- Carl Crawford, TBR to BOS, $142,000,000
- Alfonso Soriano, WSH to CHC, $136,000,000
- Jayson Werth, PHI to WSH, $126,000,000
- Barry Zito, OAK to SFG, $126,000,000
- Cliff Lee, TEX to PHI, $120,000,000
- Matt Holliday, STL to STL, $120,000,000
- Jose Reyes, NYM to MIA, $106,000,000
- Carlos Lee, TEX to HOU, $100,000,000
- Adrian Beltre, BOS to TEX, $96,000,000
- Torii Hunter, MIN to LAA, $90,000,000
- John Lackey, LAA to BOS, $82,500,000
- A.J. Burnett, TOR to NYY, $82,500,000
- C.J. Wilson, TEX to LAA, $77,500,000
- Aramis Ramirez, CHC to CHC, $75,000,000
- J.D. Drew, LAD to BOS, $70,000,000
- Jason Bay, BOS to NYM, $66,000,000
- Yu Darvish, Japan to TEX, $60,000,000
- Derek Lowe, LAD to ATL, $60,000,000
- Aaron Rowand, PHI to SFG, $60,000,000
- Mark Buehrle, CWS to MIA, $58,000,000
- Adam Dunn, WSH to CHW, $56,000,000
- Gil Meche, SEA to KCR, $55,000,000
- Jorge Posada, NYY to NYY, $52,400,000
- Ryan Dempster, CHC to CHC, $52,000,000
- Daisuke Matsuzaka, Japan to BOS, $52,000,000
- Derek Jeter, NYY to NYY, $51,000,000
- Jonathan Papelbon, BOS to PHI, $50,000,058
- Gary Matthews, Jr., TEX to LAA, $50,000,000
- Victor Martinez, BOS to DET, $50,000,000
Since 2006, 34 players have received a contract worth at least $50,000,000 and only six signed the aforementioned deal with their incumbent team. The Yankees issued three of those deals (Rodriguez, Posada and Jeter), the Cubs two (Ramirez and Dempster) and the Cardinals (Holliday) one.
It's no surprise that top free agents appear to be signing with new teams, with rosters turning over so frequently and teams inking stars to extensions before they hit the open market, but the surprising aspect is the effect losing superstars has had on teams over the last six years.
As addressed above, 28 of the 34 players that have signed contracts worth at least $50 million over the last six years did so with new teams. That leaves six players that re-signed and the results were not positive. In those half dozen cases, the team won 89.5 games the year before free agency and 88.2 games in the first year of the new contract. A difference of 1.3 games might not seem like a lot, but with playoff races extremely close in recent years those teams went from enjoying four postseason appearances to just two.
I'm going to exclude two of the remaining 28 contracts, given to Daisuke Matsuzaka (Red Sox) and Yu Darvish (Rangers) because they didn't sign their contracts and go from one Major League team to another.
In the 26 cases of players changing teams in the last six offseasons, from the $250 million deal Pujols signed with the Angels to the $50 million deal that Victor Martinez signed with the Tigers, the data was interesting to say the least.
You might expect that the team losing their superstar would fall a bit, and they did. On average a team went from 87.2 wins in the final season before their star's free agency to 85.2 wins in the first campaign without their anchor. The loss of two wins was significant. Those teams saw 14 postseason berths decline to just seven the next year.
However, you might not expect teams to see a fractional reduction in wins in the first season of the mega-contract they issued. The figures went from 86.7 wins in the season prior to signing a big ticket free agent to 86.5 wins in the first year of the relationship. In the interest of full disclosure, star power did help those teams advance into October more frequently. Postseason berths rose from six to 11.
With chemistry-heavy teams like the Cardinals (2011) and Giants (2012) thriving, the effect of a superstar may be diminishing. Since 2010, there have been 12 cases of free agents signing a $50-plus million contract with a new team and they have made virtually no effect on their new employer. The signing teams have seen their average wins go from 85.6 to ... 85.6. The playoff appearances (four to four) have remained level as well.
The realization that letting a big ticket free agent walk isn't a big deal really sinks in when you look at the team that has a hole created in their lineup or pitching staff. If you look at only the last two years those clubs have seen a reduction in wins of just 0.5.
The White Sox (Buehrle), Cardinals (Pujols), Nationals (Dunn), Red Sox (Beltre), Rangers (Lee) and Phillies (Werth) all watched All-Star players leave as free agents in the last 24 months. They also all enjoyed an increased win total the following year.
Allowing a superstar to walk, or losing a bidding war, is a scary thought for many franchises, especially those in small markets. In recent years, the Brewers weren't able to shell out enough cash to re-sign Sabathia and Fielder, but they have remained competitive. The effect on attendance and merchandise sales notwithstanding, a team can prosper without their supposed savior.
Of course, I'd be remiss if I didn't acknowledge the fact that the data I've used here is relatively crude. There are a number of factors that effect a team's win total from year-to-year that have nothing to do with losing a big-name free agent -- or adding one. Injuries and the status of division foes are just two. There are also nuances that effect a player's production from team-to-team such as where he will hit in the lineup, his place in a new rotation and the dimensions of his new home park.
Still, the fact of the matter is that losing a superstar isn't a death sentence for a team, whether in a small or large market.
That is both good news and also a potential course of action for the Rangers (Josh Hamilton), Cardinals (Kyle Lohse), Yankees (Nick Swisher), Rays (B.J. Upton), Braves (Michael Bourn) and Angels (Zach Greinke). You can win just as much without your current superstar and your payroll will be a lot lighter as well.
Of course, this is also a word of warning to teams that are fantasizing about putting someone like Hamilton in their uniform. It may not work out as well as you project.
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