The U.K.’s Prime Minister, Theresa May, has said that “it’s going to get ugly” for the former Cambridge Analytica and Facebook employees who are set to be hauled in front of lawmakers this week over their role in harvesting personal data from millions of users without their consent.
“It’s going to get ugly for those guys” is a quote from the movie “The Wolf of Wall Street”. The meaning of the phrase is that it will be difficult for those people who are being targeted by this.
The amount of money spent on free agency contracts so far is unprecedented and mind-boggling. Max Scherzer’s $43.3 million yearly pay is the biggest ever paid to a pitcher. The Texas Rangers have spent more money on two players, Corey Seager and Marcus Semien, in the past two days than they had on their whole team in the previous four seasons combined. After Steve Cohen’s holiday weekend spending frenzy, the New York Mets’ 2022 payroll is nearing $300 million.
However, some agents and club executives fully expect a fallout from all of the money being thrown around now, and believe that whenever Major League Baseball and the MLB Players Association reach a labor agreement — whether it happens in the next three days or three months — those who will bear the brunt of the cost will once again be the union’s middle class.
That is, it is the rank-and-file veterans who aren’t superstars and don’t command eight- or nine-figure salaries, a group that has seen a significant drop in average compensation over the last seven years. “For those folks, it’s going to be nasty,” one general manager said.
“I don’t even want to think about what’s going to happen to them,” a player agent said.
Salary and compensation have been a major emphasis for the union throughout the failed discussions that resulted in the league locking out the players for the first time in 30 years on Thursday, but the main topics of discussion have been a league minimum and free agency eligibility. The middle class of players has been largely ignored in these discussions, as many clubs use analytics to locate cheaper replacement-level players, while others embrace the tanking approach and drastically reduce salaries.
According to data compiled by ESPN analyst Paul Hembekides, the average wage for middle-class free agents dropped by almost half between 2014 and 2021. Hembekides basically separated the high and low in defining that group, separating the ten players with the most lucrative contracts each winter from any player who signed for less than $1 million or accepted a non-roster invite.
The data reveal a sobering picture for second- and third-tier veterans:
In 2014, the average contract value was $11.8 million. $11.1 million in 2015 $8.2 million in 2016 $8.2 million in 2017 $8 million in 2018 $7.8 million in 2019 $6.2 million in 2020
According to the Associated Press, the players’ total part of the multibillion-dollar baseball business has shrunk, with the union’s piece of the pie dropping and the average income declining:
$3.95 million in 2014 $4.20 million in 2015 $4.38 million in 2016 $4.45 million in 2017 $4.41 million in 2018 $4.38 million in 2019 $4.43 million in 2020 (prorated) $4.17 million in 2021
Some agents are quite concerned that this tendency will continue, even if the league and the union reach a deal on the next collective bargaining agreement. They anticipate clubs to take advantage of the large pool of free agents available and leverage supply-and-demand to their advantage versus veterans.
Last winter, reliever Mark Melancon, who had a 2.78 ERA as the Atlanta Braves’ closer, could only get a one-year, $3 million contract with the Padres (he inked a two-year, $14 million deal with the Diamondbacks on Wednesday). Ryan Tepera put up a solid season with the Cubs in 2020, but was not even offered a contract, so he re-signed for a wage drop from $900,000 to $800,000. He was sent to the White Sox in the middle of the season.
The union leadership’s current strategy in the CBA talks is to push those numbers up from the bottom up, by giving the majors’ youngest players more money earlier in their careers, through what one source described as a “significantly” higher minimum salary, and by bringing young players into arbitration sooner. The union hopes that by promoting a system in which younger players are more costly, clubs would be more willing to pay a senior veteran more.
However, some agents are concerned that by focusing the objective of providing more money to younger players early in their big league careers and bringing more players to free agency sooner, the union will be feeding the systemic processes that have lowered middle-class player compensation.
Teams may be enticed to pitch players overboard into the ever-growing pool of free agents if they reach wage arbitration sooner in their careers, becoming more costly.
We’ve got the latest on MLB’s first lockout since 1990, as well as where things stand with free agency (which is presently stalled). Complete coverage »
• MLB Lockout FAQ: Everything You Need to Know ›
• Tracking free-agents »
“If the new CBA allowed more players to achieve arbitration or free agency status at earlier stages in their careers, it would accomplish very little without pressure points requiring clubs to pay,” longtime agent Seth Levinson wrote in an email. “A lower threshold for arbitration eligibility will result in more players being non-tendered, and the consequence for players reaching free agency at five years instead of six will be that the market will be frenzied.”
Levinson and other agents are hoping that the union’s leadership concentrate on the players’ entire part of baseball’s income pie, rather than favoring one group over another. Many people believe that more should be done to stop clubs from tanking, which involves slashing salaries in order to finish at the bottom of the standings and, as a consequence, selecting near the top of the draft. Some agents claim that the union’s middle class has lost hundreds of millions of dollars as a result of the downturn.
Levinson wants the union to seek a bookend to the competitive balance tax, which punishes the teams who spend the most money — a tax imposed on clubs that exceed a certain salary ceiling. The Pirates, Guardians, and Orioles are all expected to pay their whole squads less than the Mets will pay Scherzer in 2022. According to Levinson, MLB and the union have long discussed a system that would “give clubs the option of maintaining a minimum payroll or paying a tax as a penalty… Strong financial disincentives for tanking will likely result in the Club spending on Free Agents, which improves the on-field product, its relationship with the fan base, increases the value of free agents, and allows many veteran players to extend their careers.”
For years, there have been factions of Haves and Have-nots among Major League Baseball owners, with big-market teams like the Yankees and Dodgers favoring very different rules than small-market teams like Tampa Bay and Cleveland. It’s unclear whether a similar dynamic will emerge among the players, because while the elite players continue to set new salary benchmarks every winter, the union’s middle class is losing ground, despite the fact that its size has grown significantly as some teams use analytics and others adopt a tanking strategy.
This winter, approximately a quarter-dozen players struck agreements for about $1.5 billion. The system is working for the greatest players at the top of the baseball food chain. However, approximately 300 players are still unsigned, and they may have to wait months to find work — maybe for far less than they anticipated before the summer started.
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