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They’re still out there.
J.D. Martinez. Lorenzo Cain. Eric Hosmer. Yu Darvish. Jake Arrieta. Lance Lynn. Alex Cobb.
Virtually all of baseball’s best free agents are still on the market and, as of this writing, we are just a handful of days away from 2018. It’s getting awfully late in the Hot Stove season for this many good players to still be sitting on the shelves, and if we’ve learned nothing from car commercials over the years it’s that leftover inventory often leads to big savings.
So at what point should or could the Phillies take advantage of this slowly developing free agent market?
The Phillies have some big advantages going for them, most importantly, acres of land under the luxury cap (we should just call it what it is... a salary cap) and a ton of financial heft. As of now, there are four players on the roster under guaranteed contracts for 2018-19: Carlos Santana, Tommy Hunter, Pat Neshek and Odubel Herrera. Their contracts come to a whopping grand total of... $38.4 million. It's pretty much the same thing for 2019, but that total will jump a bit once all the pre-arbitration and arbitration deals have been signed, Still, the Phillies will be WAY below the luxury tax of $195 million this year.
That number increases to $197 million in 2019 and $206 million in 2020 by the way.
The Yankees and Dodgers shed a bunch of payroll recently to get under the luxury tax so that they could make a play for the big free agent class of next year. They want to be able to go after Manny Machado, Bryce Harper, Clayton Kershaw (if he opts out) without incurring larger luxury tax penalties for being over the number too many seasons in a row. And while that makes them a big worry for the next free agent class, they're not going to compete for the bigger free agent names still available. That opens a possible window for the Phillies right now.
The big question is, at what point do the prices drop low enough for the Phils to jump in, specifically for a player like Jake Arrieta?
Teams are waiting for prices to come down. No one wants to sign players to huge mega-deals anymore. No one wants to spend $200 million on players over 30 years of age, and no one wants to sign a pitcher like Arrieta to a five or six-year deal. Major League front offices are all basically on the same page now and recognize that most of the mega deals of the last 10 years don’t look very good right now.
There are no more Ruben Amaros, GMs willing to jump the market and overpay. That used to be how general managers operated in free agency, but now teams are way more cautious. You could even say they might be a bit scared. And while caution is a good thing, you have to wonder if an opportunity is there for the Phillies to take advantage of that fear and add a big-time free agent right now on a shorter deal for more annual salary in the hopes of landing a nervous free agent, or guaranteeing a payday over the next three years that could make it an offer that was impossible to refuse.
Suppose they offer Arrieta a three-year contract worth $27 million a season ($81 million). In 12 second half starts last year, his ERA was 2.28 in 67 innings. He pitched very well for Chicago down the stretch before a hamstring injury sidelined him for the last couple weeks. If you like Arrieta and believe he can be a good pitcher for the next three seasons, how much would you be willing to overpay to have him on a shorter deal? And how much would it take to convince him to eschew the 5-6 year deal he was seeking?
Perhaps Arrieta isn’t your cup of tea. Teams are more likely to give Darvish what he wants, given there is no qualifying offer compensation attached to signing him. The Phils would have to give up a 3rd round pick to sign Arrieta and, as Paul Boye noted on this week’s podcast (31:32 mark below), if the Phillies were to sign Arrieta to a big contract right now, it would mean they have to go all-in on 2017 and pull off another move that would further improve the roster to make a real wild card run.
And hey, Arrieta might not be the best guy to get. His first half last year was definitely troubling and it’s fair to wonder if even signing him to a three-year deal is foolhearty. Lynn is younger and more durable and could probably be had for cheaper, but doesn’t have the same upside you would want if you’re going to give up your 3rd round pick to get him.
The larger point is that there is a new market inefficiency. Teams aren’t spending on free agents because of the luxury tax, recent history with long contracts, and baseball’s obsession with landing every single player at a discount.
At the end of the day, if the Phillies believe there is a free agent pitcher out there that can help them now, they should be investigating ways to take advantage of the market’s hesitancy and see if they can use their financial might to make something work.
The Phils have money they can spend, in a climate where GMs are afraid to spend money. There might be something there. On Episode 169 of The Felske Files, I spoke with The Good Phight’s Paul Boye about this, as well as his outstanding article on Carlos Santana.
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