UPDATE: Brewers agree to long-term contract with Yovani Gallardo

Leave a comment

UPDATE: Gallardo gets a five-year deal (including 2010) with a sixth-year team option, so the Brewers potentially bought out his first two seasons of free agency.
11:45 AM ET: Tom Haudricourt of the Milwaukee Journal Sentinel reports that the Brewers “are believed to be closing in on contract extension” with Opening Day starter Yovani Gallardo.
Milwaukee has scheduled a press conference for this afternoon, presumably to announce the deal with Gallardo, who will be arbitration eligible for the first time next season and has three more years remaining under team control.
After missing most of 2008 with an ACL team in his right knee, Gallardo won 13 games with a 3.73 ERA and 204 strikeouts in 185.2 innings as a 23-year-old last season. His control was shaky with the second-most walks in the league at 94, but he also ranked second in strikeout rate and held opponents to a .219 batting average.
Gallardo had good control in the minors and walked just 45 batters in 134.1 innings before suffering the knee injury, so at age 24 he seems likely to take a big step forward this season. In other words, if the Brewers can pre-pay for his arbitration years and buy out a year or two of free agency before his value rises they’ll have taken a very smart risk.

Mike Trout says Harper and Machado’s free agency experience sent up “red flags”

Getty Images
Leave a comment

Mike Trout signed a record-setting contract extension last week, agreeing to ten more years tacked on to his existing deal at $35.45 million a year. It’s certainly nothing to sneeze at and, I’m quite sure, Trout will not lose any sleep over financial matters for the rest of his days.

One wonders, though, what he might’ve commanded had he hit free agency. If he had been bid on by more than one team. Sure, there is some upward limit to how much even a guy of Trout’s caliber might get, but you have to assume that if a couple more teams were able to get in on that action that that $35.45 million a year could’ve been topped.

Did he give any thoughts to testing the market? Maybe not serious ones, but he certainly observed the market this past winter and didn’t much care for what he saw. He said this to Fabiran Ardaya of The Athletic last night:

“I kind of saw what Bryce and Manny went through and it drew a red flag for me. I talked to Manny and Bryce. It was a tough couple months in the offseason. They put it perspective in my mind.”

He added, “I obviously want to be an Angel for life. That was a big key,” so it’s not like this was purely some matter of Trout being scared off the market. But it’s also the case that the market has become fraught for even the best players in the game and has influenced their decision making to a considerable degree. Part of Mike Trout’s decision to sign that deal was how unwelcoming the free agent market looked like it’d be even for him.

And it’s not just Trout. To see how unpalatable free agency has become one need merely look at the bevy of contract extensions agreed to over the past week or two. Each one of those, however lucrative they may be, represent a player foregoing the open market in favor of negotiating with a single bidder with greater leverage as a result. While some of those choices, like Trout’s, do not cost the players much more than, perhaps, some rounding error on his ultimate contract, others, like pre-arbitration players, are likely foregoing tens of millions of dollars in order to make a deal now instead of a few years later. And, of course, each team that signs a player to an extension is less likely to be active in an upcoming free agency period, reducing the number of bidders and thus applying downward pressure on salaries for those players who do hit the open market.

For the first century or so of baseball history the Reserve Clause ruled baseball economics. Under that system, a team which possessed the rights to a player could not be deprived of that player’s services if it did not want to be. When it came time to decide what to pay a player only one team could bid, giving it all the leverage. Then free agency came. Owners fought like hell against its implementation. They lost that battle and then attempted to roll it back as much as they could, even employing illegal tactics at times in an effort to do so, but they didn’t have much luck.

In the past two or three years, however, they have done what decades of efforts could not do: they have effectively taken away a full and open free market for players and have returned the game to a state in which the team which holds a players’ rights is, effectively, the only bidder for his services and has the power to retain him on favorable terms.

It’s not the restoration of the old reserve clause, exactly, but when the best player in baseball since Willie Mays is wary of the open market, you have to admit that it’s far, far closer to it than anyone thought the owners would ever get.