Mike Moustakas’ deal shows just how broken free agency is

Getty Images

In case you missed it, last night Mike Moustakas agreed to a one-year deal to return to the Royals this year. He’ll make $5.5 million. Presuming that the mutual option he and the Royals stuck in the deal is declined — and they’re almost always declined — he’ll get a $1 million buyout next year, so he’s guaranteed only $6.5 million.

Reliever Brian Duensing got a $7 million guarantee over a couple of years. Steve Cishek will get $6.5 million for each of the next two years. Anthony Swarzak will make $14 million over the next two. So will catcher Wellington Castillo. There are a lot of players not as good or as young as Mike Moustakas who did better in free agency than he did this year. Given what even the most conservative outlets were projecting he’d make last fall, it’s shocking how cheaply a guy who hit 38 homers, slugged .521 and isn’t yet 30 years-old came for his old club.

To be sure, I don’t believe that Moustakas is some elite superstar. I don’t think he is as good as he is famous. Yes, he hit a lot of homers, but he also doesn’t get on base that well. He’s not a lumbering first baseman or a DH, but no, he’s not exactly a plus defender anymore, if he ever was. And yes, given the needs of various other teams and how they went about filling them this past offseason, there were limits to his market and the limits became more acute as the winter wore on. Jeff Sullivan at Fangraphs has a good overview of all of that here.

But $5.5 million and a cheap buyout? Is THAT how limited a player and how limited a market there was for Mike Moustakas? That seems insane to me.

It seems insane to me none of the other 29 teams in baseball believed that Moustakas was not worth around $6.5 million for a single year commitment. Insane even when you acknowledge that Moustakas may not be as valuable as his fame suggests. Insane even when he had draft pick compensation attached to him via the qualifying offer (it’d be 2-3rd round pick, with slot money that could easily be acquired in very minor trades over the course of the season). Insane even when you take away the teams that had no need for a third baseman heading into the offseason.

Then again, maybe it’s not so insane when you realize that we have a Collective Bargaining Agreement which actively discourages teams from signing guys like Mike Moustakas. A CBA which has created a system which favors young, cost-controlled players, emphasizes the draft (which itself favors the worst clubs most), affirmatively penalizes clubs for signing free agents AND has no enforcement on competitive balance-encouraging measures like revenue sharing. A system which has created a big, big downward escalator on salaries and opportunities for guys like Mike Moustakas.

It has done so in the following ways:

  • The Luxury Tax: The threshold which imposes penalties on teams for high payrolls is proportionately much lower now, compared to revenues, than it was when it was first instituted. Indeed, it was envisioned by those who came up with the concept that it would grow commensurate with industry revenues. It hasn’t done that. Meanwhile, the tax imposed has escalated to a point that it is oppressive. Those levels were negotiated by the MLBPA. They messed up. The Yankees, Tigers and Giants all might’ve had some interest in Moustakas but for the tax as currently configured;
  • The Qualifying Offer: It continues to penalize the signing club which then passes the damage down to the top free agents. By lowering the value of the best free agents it lowers the bar for all players, costing them money. While the 2nd or 3rd round pick attached to Moustakas is not super expensive in the grand scheme, it’s not cost-free. Its only purpose is to penalize teams for trying to improve by signing him. If your goal is to compensate teams who lose free agents, you could do that with a supplemental pick that doesn’t impact signing teams. Why the union ever agreed to a penalty like that is beyond me;
  • Revenue Sharing: Recipients of revenue sharing are, theoretically, supposed to show the manner in which sharing that money has improved the on the field product. There is no real safeguard or mechanism in the CBA to ensure that this happens, however, and multiple teams are ignoring it. The MLBPA has filed grievances to this effect, but very little is likely to come of them, meaning that there was no pressure or incentive in place for the Rays, Pirates, Marlins, Braves or White Sox to look at Moose. I suspect what has happened here is that the union assumed that, as overall revenues grew, teams would naturally spend that money on players. It was a naive assumption which suggests an ignorance of how baseball owners have tended to operate when they’ve gotten extras cash over the past 150 years;
  • The amateur salary cap: In contrast, the slots for draft picks come with penalties so severe that it serves as a cap on drafted players. Setting aside that, as a matter of principle, the MLBPA should never have agreed to a cap, be it an explicit or a defacto one, it has created a tremendous incentive for teams to focus on younger, controlled players over veterans simply as a matter of cost. There are several teams who didn’t look at Moustakas because they have cheaper, team-controlled players who are worse than he is but who are preferable, financially speaking;
  • The international salary cap: Like draftees, most international free agents worth a damn are capped severely in the new CBA. The international concessions serve MLB’s interest in payroll reduction and maintaining good relationships with foreign leagues, with which it partners in various ways, but what does it do for MLBPA members? Why did they agree to it? They likely did due to the same assumptions the union made about the owners spending more money when revenues increased which, again, was a bad assumption. While Shohei Ohtani is primarily a pitcher, his bat is also envisioned to help deal with the Angels’ 1B/DH issues. If the Angels had to pay market price for him, might they have at least considered getting more creative in addressing the club’s overall needs? Might the things that would’ve put into motion based on that have benefitted Moustakas, even if indirectly?

Many people I talk to think about all of these things and say, in effect, “hey, that’s the system, whaddaya gonna do?” What many overlook, however, is that the system is not set in stone. All of the above conditions which make up that system were negotiated by the MLBPA, mostly recently. They are not immutable facts of life in place since the dawn of time. All of the things listed above which inspire teams to or discourage teams from signing a given player are a function of the CBA and the incentives and disincentives it creates.

Mike Moustakas would’ve looked great in Yankee pinstripes and could’ve provided at least some credibility to a Tigers team that will be a joke in 2018, but the luxury tax incentivized both of those clubs to steer away. The Giants made sense but the luxury tax considerations likely scared them away early and, later, when Moustakas might’ve been had more cheaply, the Rays gifted them Evan Longoria, themselves under no real CBA pressure to spend money. The Braves, Phillies, White Sox, Pirates, Marlins and Orioles all would be better teams with Mike Moustakas on them, but they likewise are under no pressure and are thus not incentivized to win more games and/or spend more money, so they’ll go with cheaper, worse options. Shohei Ohtani’s bargain basement price greatly disrupted the market in its own unique but ultimately foreseeable way.

Every single one of those teams’ decisions not to pursue Mike Moustakas, in a vacuum, is defensible and even reasonable. That the Royals were able to get him so cheaply is totally logical if you take it all on a step-by-step basis given the prevalent conditions in the market.

Those conditions are a function of a broken system, however. A system which exists because the Major League Baseball Players’ Association negotiated a series of Collective Bargaining Agreements that have harmed its membership. A system for which now Mike Moustakas is the most prominent poster boy and greatest financial casualty.