MLB Clubs Now Prefer Trading To Signing Free Agents
For the second straight year, free agency has slowed to a crawl.
With one month until pitchers and catchers report to spring training, just 82 of the 217 major league free agents (38 percent) have signed or agreed to contracts. Seventy-three of those 82 players received deals of two years or fewer.
But while the free agent freeze has dominated headlines, players are still on the move and teams are still filling their roster holes. It’s just happening in a different way.
Increasingly, teams are opting to pay in prospects, rather than dollars, to acquire players they need.
A total of 38 player-for-player trades have been completed since the end of World Series. Twenty-nine of those 38 (76 percent) involved primarily prospects going one way and primarily big leaguers going the other.
That is up markedly from previous years. Through this date last offseason, there were 19 such prospect-for-veteran trades. In the 2016-17 offseason, there had been 15.
The Nationals needed catching and acquired Yan Gomes for three prospects rather than sign one of the more than 20 available free agent catchers at the time.
The White Sox sought starting pitchers and a first baseman and traded prospects for Ivan Nova and Yonder Alonso. The Astros needed infield depth and traded a minor leaguer for Aledmys Diaz. The Athletics needed a second baseman and traded two prospects, international bonus pool money and a draft pick for Jurickson Profar in a three-team deal.
All of those holes could have been filled via free agency, without a team risking a traded prospect coming back to haunt them.
Instead, the teams involved decided the prospect cost to acquire a player via trade was still less than the dollar cost to sign one.
"A lot of the mid-market free agents, just the way the system is now (because of) the CBA, it just doesn’t incentivize you to spend a lot of money on those guys,” one American League official said.
That issue—the structure of the Collective Bargaining Agreement—remains at the core of players’ concerns and is oft-cited as the root of the current state of free agency.
With the competitive balance tax serving effectively as a hard cap on free agent spending, lucrative, long-term deals for second-tier free agents are no longer in clubs’ interests because of the taxes and draft pick penalties incurred.
As such, teams are going the trade route more frequently and using prospects as the primary currency.
Part of that calculation, per one veteran National League executive, is free agents waiting longer to sign in the new landscape, hoping the big contract they’ve dreamed of comes through at the last minute.
“In a perfect world, you don’t want to do it that way (trade prospects), but it’s a different era. Free agents aren’t signing that quick,” the NL executive said. “It’s just different where guys are pushing it back much further, the signing date. Clubs are still in it to win it and can’t wait until February to profile out their team. We’re trying to compete. We can’t take that risk.”
Clubs have made those intentions known through their actions. Agents are trying to respond, knowing now that if their non-elite clients wait too long, teams will simply trade a few prospects to fill a need.
“If there is an opportunity to sign early, to strike early, then you do that,” said one agent on how he now advises his clients. “Waiting doesn’t always pay off in the end. The history, at least in the past two years, seems to be that a lot of players who have struck deals early have done well.
“Here we are getting into February and there are a lot of free agents out there that may not sign. I don’t think that anyone wants to go back to that camp in Bradenton (held) last year. I don’t think that was fruitful. But it became necessary because of the shift in the timing of deals getting done.”
Even as more free agents begin to come off the board, the trend does not appear to be abating. The Dodgers became the latest team to trade prospects to fill a need rather than sign a free agent, sending two prospects to the Blue Jays for 35-year-old Russell Martin and assuming $3.6 million of his salary rather than take that money and spend it on a free agent catcher without giving up young players.
But the Dodgers made the same calculus most teams have—that $3.6 million and two prospects is a lesser price than what they would have had to pay on the free agent catching market, even for a part-time veteran as Martin is now.
With the current system how it is now, all sides expect that pattern to only keep getting more pronounced.
“In theory, if you can just spend money versus giving up assets of your own, it makes more sense to give up money,” the AL executive said. “But it’s definitely a trend. The free agency market is again moving slowly. I don’t know the answer to it.”