Tuesday marks the 18th anniversary of the most transformative contract in American sports history. When Alex Rodriguez signed a 10-year, $252 million deal with the Texas Rangers, it rejiggered the notions of what an athlete could be paid. Curt Flood and Andy Messersmith forged the path for free agency, and Len Barker proved its value, and collusion in the 1980s illustrated how dangerous ownership believed it to be. Then came Barry Bonds and Albert Belle and the game’s first $100 million man, Kevin Brown. Until Rodriguez, the evolution was linear.
With one stroke of the pen, he more than doubled the previous record. It set off a panic. How could one player be guaranteed more than what half the franchises in the game were worth? If some baseball teams were losing so much money they might be contracted – they weren’t, but that was a popular talking point in 2001 – how much more inequitable would the game get? And most frequently: Just how high might salaries go?
It’s funny, that last one. Sport-wide revenues in 2001 were around $3.4 billion, which, adjusted for inflation, is $4.9 billion. Today, they’re around $10 billion – about double. Opening-day payrolls in 2001 averaged around $65 million – $93 million when inflation-adjusted. Last season, they were in the $130 million range, which isn’t even a 40 percent increase. And the biggest free agent contract in baseball history?
The $275 million deal the New York Yankees gave A-Rod in 2007 when he opted out of his original 10-year deal. Less than a 10 percent bump.
All of this is important context for what’s primed to unfold in the next month. For the first time since Rodriguez’s initial foray into free agency, there is a player – actually, two – who come close to matching his combination of youth and excellence. Bryce Harper and Manny Machado are free agents now, and as the winter meetings begin Sunday at the Mandalay Bay in Las Vegas, their fortunes, both professional and monetary, are the most significant question in a sport riddled with them.
The parlor game of “Where will Bryce and Manny wind up and how much will they make?” is popular in conversations among executives, scouts and others inside the game, and the answers often morph into greater ruminations about the state of baseball writ large. Some are skeptical that Machado’s agent, Dan Lozano, and Harper’s, Scott Boras, will be able to extract even $300 million, which makes one wonder: How, exactly, can revenues double over the last 18 years and yet those who are among the game’s faces make around the same as their proxy a generation ago did? Others believe Harper and Machado will exceed $300 million but, along with Patrick Corbin’s $140 million deal with the Washington Nationals, will represent the only significant outlays this winter. Which makes players, already wary of ownership after last winter’s free agent freeze, think: Where, exactly, is all this money going if not to the players?
Harper and Machado are outliers. That’s a vital point to consider. Each is 26 years old when a vast majority of free agents are in their 30s. (A-Rod was 25.) Harper has been to six All-Star Games, Machado four. (A-Rod had attended four.) Harper hits free agency with a career line of .279/.388/.512 with 184 home runs, 521 RBIs and an OPS+ of 139. (A-Rod was .309/.374/.561 with 189 home runs, 595 RBIs and an OPS+ of 138.) Machado hits free agency with 33.8 wins above replacement, highlighting his value at third base and shortstop as well as with the bat. (A-Rod had 38.1 WAR.)
They may not be A-Rod, but Harper and Machado certainly reside in his gated community, and it’s reasonable to ask why, then, their paydays wouldn’t go up commensurate with the game’s revenues. The answer isn’t particularly satisfying: Because others’ haven’t since. And while that didn’t prevent former Texas Rangers owner Tom Hicks from investing a quarter-billion dollars in Rodriguez, the idea that owners to whom fiscal discipline is practiced as mandate would lavish a player simply doesn’t resonate. The outliers can be outliers. Just don’t pay them like it.
This is, of course, a towering load of nonsense. Owners can spend and still make tidy profits. The revenues clearly show that. They choose not to, and that choice has manifested itself in austerity plays across the sport. It’s not just financial behemoths like the New York Yankees and Los Angeles Dodgers dipping beneath the luxury-tax threshold. It’s the degradation of the game’s middle class, the soft cap on domestic amateur spending and hard cap on international amateur spending, the recognition that the difference between a decent veteran and dirt-cheap rookie is minimal enough to forgo the former for the latter.
Some of these are the natural rhythms of the game; teams stressed efficiency, players pay the price. But if baseball indeed is comfortable careening toward a stars-and-kids game – one that casts aside, or at least devalues, fringe major leaguers by the time they reach their fourth or fifth year, as happened last week with a record number of veterans non-tendered – then paying the stars what they deserve is an integral component of not just balance but labor peace.
Harper and Machado cashing in still may not be enough to avoid a reimagining of baseball’s financial foundation upon the expiration of the current collective-bargaining agreement in 2021, but at least it would stave off charges that the last bastion of those not crushed by this new reality – young, elite players – were also somehow subject to squeezing.
What’s the line? Well, at 25 years old, Giancarlo Stanton signed a 13-year, $325 million extension – the largest contract in the game’s history in terms of length and dollars. Harper and Machado seeking at least 10 years is more than reasonable. And with Mike Trout and Zack Greinke setting the current standard with a $34 million-plus salary in 2019, it’s likewise understandable that Harper and Machado – with all 30 teams, theoretically, in the market for their services – would shoot to exceed that average annual value.
Their free agencies will be the greatest barometer yet as to whether the evolution of the market works its way backward, from the bottom to the top. Premium free agents always have existed in their own unique bazaar, where owners are involved with deals, approving, sometimes over the suggestion of the executives they hire to win them World Series.
The Seattle Mariners needed buy-in to bid $240 million for Robinson Canó … and, after five years and nary a playoff appearance, they shipped him to the New York Mets last month with their all-world closer, Edwin Díaz, attached as a palate sweetener for the deal’s sour finish. The Los Angeles Angels would love to rid themselves of the last three years of Albert Pujols’ $240 million deal; all they can do is swallow hard. Those are the two biggest free agent deals in baseball since A-Rod fetched $275 million, and while they went to 32-year-olds, their fallout irretrievably changed the landscape for big-money deals.
So here stand Harper and Machado, and next year Nolan Arenado, and the year after that Trout and Francisco Lindor, and on and on, because if the game transitions younger and younger, and if players and warier and warier of signing team-friendly long-term contracts that buy out free agent years, the best of the best will just wait. Unless free agency proves a wasteland even for the finest the game has to offer, in which case the quarter-century of labor peace baseball has experienced will evaporate as if Thanos snapped his fingers.
It’s why $300 million is almost the line of demarcation for Harper and Machado. Anything less – anything close to what a 32-year-old A-Rod got in 2007 – flies in the face of this windfall that has enriched owners far more than it has players. Rodriguez’s first mega-deal, adjusted for inflation, would be worth nearly $360 million today. And remember: It turned out to be a bargain for what he produced.
All of this makes the comments Friday from Washington Nationals owner Mark Lerner that much more curious. He went on 106.7 The Fan in Washington, D.C., on Friday and said the 10-year, $300 million offer toward the end of the season that Harper rejected was “the best we can do.” Perhaps it’s nothing more than gamesmanship. The Yankees said if Rodriguez opted out of his deal, they wouldn’t re-sign him. They did. Still, for the Nationals to publicly withdraw on the eve of the meetings in Harper’s hometown was the most surprising exit since Kramer slammed down $100 and declared: “I’m out.”
Those interested will meet with Boras away from the Mandalay Bay, and Lozano will keep tight the list of teams keen on Machado, and maybe a cocktail of excitement and desperation and the desire to win will make these winter meetings as historic as those 18 years ago, when Alex Rodriguez was the first of many $250 million-plus free agents. Nearly two decades later, it remains a list of one.
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