The New Free Agency

Albert Pujols and Prince Fielder are the top two free agents this year. They are also both among the best hitters in the game and would be valuable additions to any lineup. At 27, Fielder is just entering his prime. Pujols is 31, but over the last decade has proven himself to be a player of historic greatness. In 2011, despite a slow start, he put together a very good season, hitting .299/.366/.541 and an even better post-season, culminating in a World Series victory for his St. Louis Cardinals.

One would expect that many teams would be courting Pujols and Fielder, both of whom are likely to remain among the best players around for at least a few more years. The relative lack of interest in both of them indicates quite a bit about the state of baseball economics and salary structures today. As has been the case for many years now, although all teams are free to pursue Pujols and Fielder, there are several small market teams for whom, due to their lack of revenue and payroll limitations, signing a premier free agent is not a realistic hope. It has been a long time since the Pittsburgh Pirates, Kansas City Royals or Minnesota Twins, for example, have made a major splash in the free agent market.

This is not particularly surprising. It is more surprising, and significant, that a number of medium sized, and even big, market teams also appear twos have taken themselves out of the running for the top two free agents. Teams like the San Francisco Giants have cited payroll limits and desire to use their money to keep their own players. Others, like the Florida Marlins, have made low offers seeking to demonstrate interest to their fans, rather than to actually lure Pujols or Fielder.

Most striking is the lack of excitement Pujols and Fielder have generated from the big market teams who usually go after the best free agents every year. The Los Angeles Dodgers and New York Mets are somewhat limited by ownership problems that make it tougher for them to offer big contracts to free agents. The New York Yankees, Philadelphia and Boston Red Sox, who usually vie for the best free agents, both seem to be set at first base for the next several years and thus have less interest in Pujols or Fielder. The Chicago Cubs, an emergent big market team, have expressed some interest in signing one of these sluggers, but they are the only big market team to be explicit about this interest.

The situations facing the Mets and Dodgers are unusual and not directly driven by baseball considerations. The Red Sox, Yankees and Phillies, however, are in a different situation. All three have first baseman signed to big contracts with several remaining years. However, with the possible exception of Adrian Gonzalez, none of these players can be expected to perform nearly as well as Fielder or Pujols for the next 5-7 years. Mark Teixeira and Ryan Howard are inching towards becoming league average producers at first base and are not likely to ever be elite sluggers again. Teixeira who is 31 and Howard who is now 32 have posted OPS+ of 128 and 131 respectively over the last three years. For Pujols and Fielder these numbers are 171 and 155 respectively. Among first baseman averaging 125 games or more over the last three years, Teixeira has the median OPS+ with Howard sixth out of 13. The Yankees or Red Sox could put either of these sluggers at DH, but Pujols and Fielder are less valuable if they don’t play the field. Both teams also may feel a need to keep that position open for various other aging sluggers, notably, in the Yankees case, Alex Rodriguez.

Teixeira and Howard are both illustrative of the structural problems associated with paying for past performance and giving out long term contracts. The Yankees and Phillies will likely not even attempt to improve aging offenses by adding a top notch slugger because they are tied down by owing large amounts of money to players who are not as good as best of the current group of free agents.

Howard and Fielder will end up signing somewhere for a lot of money, but the circumstances in 2011 mean that they are not free agents in the ideal market. Pujols could end up back in St. Louis with a big but not historic contract, while Fielder could go to a number of places, but is unlikely to get at contract that is significantly better than the one Teixeira got three years ago. This is, to some extent, a bad break for these two sluggers, but it is also an indication the direction in which baseball economics may be moving.

The legacy of long term contracts which tend to be concentrated among the teams that generally otherwise have the most ability to pay means that the nature of competition for top free agents may have changed. Teams, even wealthy ones, are no longer able so simply pursue the best free agents, even when they are among the very best players in the game. This is due to existing long term contracts and increasing concern about signing more players to similar contracts. The solution may be contracts with even higher annual salaries but fewer years. This, of course, will probably only exacerbate the differences between the wealthiest teams and all the others.