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The free agent market and the talent glut

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This was supposed to be an offseason where the massive supply of free agent talent would drive prices down sharply. Did it live up to its billing, and what does that tell us about the free agent market?

Gary A. Vasquez-USA TODAY Sports

The offseason is nearing a close, thank goodness. Unfortunately, there's still the miserable period of almost-baseball known as "Spring Training" to endure, but actual baseball is mere weeks away, which is good, since most of the major trades and free agent signings have been done, and it's not like the offseason has much point beyond that. With that in mind, it's a good time to look back with a critical eye on some of the predictions made and analysis offered at the beginning of this long winter, and see how it held up to reality.

The dominant narrative in November and December centered on the large amount of talent available on the free agent market, especially in the outfield and among starting pitchers. It's easy enough to find examples of articles discussing this topic. Here's Tony Blengino at FanGraphs in December, talking about how this offseason "has been heralded as a historic one in terms of the volume of starting pitching projected to be available on the free market"; Grant Brisbee, at McCovey Chronicles, with an article about "the glut of free agent outfielders"; Tracy Ringolsby, at MLB.com, describing this as an "offseason rich with outfielders." Surely, it was a thing.

Most of time, this wasn't brought up only as a description, but alongside the theory that this increased supply of talent would depress the prices teams had to pay to get said talent. That theory makes some intuitive sense – less scarcity generally means lower prices – but the free agent market is a complicated thing. The increased supply of free agents also implies an increased demand for free agents, as more teams have holes those players occupied in 2015, which means there might not actually be less scarcity.

It would take a serious statistical study, with many years of data, to determine whether this theory of the free agent market holds water or not, and even then there's no guarantee of clear conclusions on the other side. This however, is an ad-hoc look at the contracts signed this offseason by outfielders and starters to see how they comported with our expectations, generally and as informed by the specific context of 2015. As the indicator of our collective expectations, I'll be using the fantastically useful FanGraphs Contract Crowdsourcing Project, wherein FanGraphs readers are asked to estimate the years and dollars they predict certain free agents will receive this offseason. Past research have shown that these tend to be quite accurate; for our purposes, I'm less concerned about their accuracy as predictions, and more about their accuracy as reflections of the general consensus, which I think they do very well as. How did that consensus fit this offseason? Did the market look different than it has in the past?

Corner Outfielders

Name Age Projected WAR Signing Team Years Dollars Fan Proj. Years Fan Proj. Dollars
Jason Heyward 26 5.1 CHC 8 $184m 8 $184m
Justin Upton 28 3.4 DET 6 $133m 6 $120m
Yoenis Cespedes 30 2.7 NYM 3 $75m 6 $132m
Alex Gordon 32 3.8 KAN 4 $72m 5 $90m
Denard Span 32 2.5 SFO 3 $31m 3 $36m

Projected WAR figures from 2016 Steamer projections, available at FanGraphs

I'm using a semi-scientific process to decide what signings are worth highlighting, in that my rule of thumb was to ask if the signing had any impact on the rest of the market. Alejandro de Aza signing with the Mets isn't insignificant per se, but the Tigers didn't see that and think "frig, guess we should call up Justin Upton's agent." That yields five major outfield signings of this offseason.

They're headlined by Heyward, hitting the market as a youthful 26-year-old, whose contract with the Cubs was predicted with almost perfect accuracy by the median Fan prediction. I say almost perfect because Heyward's dual opt-outs after years three and four push the overall value of his contract closer to $200 million, which means the Fans were a little low, if still quite accurate. Justin Upton, the second-largest signing, also has a slightly low Fan prediction, by roughly the same amount. Just looking at those two, it's plausible to think the supply-focused narrative of this offseason was offbase.

Each of the mid-tier free-agent outfielders, however, went in the exact opposite direction, signing for substantial amounts less than the Fans expected. For Cespedes and Gordon, they also signed for fewer years, but given that they'll be 33 and 36 respectively at the end of these contracts, that's not necessarily a good thing. Those two players and Span are what give the "supply glut" theory some heft; all three are talented, not too far into their decline phases, and have good projections for 2016, yet each signed for less than expected. Cespedes's lack of a market in particular was a head-scratcher; he's coming off a 6 or 7 WAR season (by both FanGraphs and Baseball Prospectus) in which he played a huge role in the Mets' deep run into the playoffs, but his offseason was so tepid that it left our own Joe Vasile wondering, "Why does nobody want Yoenis Cespedes?"

But really, it was just Cespedes who was inexplicably lower. The Span contract might be a bit lower than the Fans' projection, but not substantially so, and the larger gap for the Gordon contract can largely be explained away as the result of sentimental considerations (which probably played some role in Cespedes's contract, too). In the end, despite all the talk of a glut of outfield supply, we're left with a blip more than a trend. Blips are interesting, but they're not exactly convincing.

Starters

All the starters signed this offseason, in a much larger table:

Name Projected WAR Signing Team Years Dollars Fan Proj. Years Fan Proj. Dollars
David Price 4.9 BOS 7 $217m 7 $198m
Zack Greinke 4.2 ARZ 6 $207m 6 $156m
Johnny Cueto 3.1 SFO 6 $130m 6 $132m
Jordan Zimmermann 2.4 DET 5 $110m 6 $126m
Jeff Samardzija 2.7 SFO 5 $90m 4 $64m
Wei-Yin Chen 2.8 MIA 5 $80m 4 $52m
Mike Leake 2.2 STL 5 $80m 4 $56m
Ian Kennedy 2.0 KAN 5 $70m 3 $36m
Scott Kazmir 2.5 LAD 3 $48m 3 $42m
J.A. Happ 1.7 TOR 3 $36m 3 $33m
John Lackey 2.6 CHC 2 $32m 2 $30m
Marco Estrada 0.5 TOR 2 $26m 3 $36m
Mike Pelfrey 0.7 DET 2 $16m 2 $16m
Brett Anderson 2.3 LAD 1 $16m 1 $16m
Hisashi Iwakuma 2.8 SEA 1 $12m 3 $42m
Chris Young -0.4 KAN 2 $12m 1 $6m
Bartolo Colon 1.5 NYM 1 $7m 1 $10m
Doug Fister 1.3 HOU 1 $7m 2 $20m
Rich Hill 2.2 OAK 1 $6m 1 $6m

Now, there are obviously more slots for starting pitchers than for outfielders, but this is a big list, running the gamut from top-tier talent and Cy Young winners (Price, Greinke, Cueto) to older, riskier options (Kazmir, Lackey, Colon) to bounceback candidates (Fister, Samardzija) to however the heck we characterize Rich Hill. This list doesn't even include Kenta Maeda, new Dodger import from the NPB, and Yovani Gallardo, who hasn't signed yet but is supposedly on the verge of a three-year, $40 or $45 million deal. If we're going to see the impact of inflated supply anywhere, it seemingly should be here.

But that's not what happened! Aside from Gallardo (who was projected for 4 years, $56 million by the Fans), there are no pitchers left without a chair as the music of the offseason comes to a close, and very few who had to take a below-market deal. The contract crowdsourcing numbers have a known tendency to under-estimate the contracts received by the high-end free agents, and this year was no exception, missing the two largest contracts by $19 million (plus an opt-out) and $51 million respectively. However, the mid-tier free agents also got more money than expected, as a rule; between Samardzija, Chen, Leake, Kennedy, Kazmir, Happ, and Lackey (the six pitchers signing for between $30 and $100 million), the fans were under by a total of $123 million, or an average of $17.5 million per player. That's a lot!

There were scattered surprises; Iwakuma's botched contract with the Dodgers drove his value down a lot, and Houston appears to be the only team willing to go anywhere near Doug Fister. Gallardo is signing for less than expected, but on the other hand, he's just this year's victim of the qualifying offer, and that's nothing new. Those surprisingly low contracts are far outnumbered, however, by the deals that make you scratch your head and wonder if you slept through some Ian Kennedy starts, or if Wei-Yin Chen has some compromising pictures of Jeffrey Loria.

Not that any of this is different than any offseason; precisely the opposite. This offseason looked, broadly, like most offseasons, despite more free agents than usual. Again, this isn't a detailed, quantitative analysis, so don't take it as one, but this strikes me as the expected level of surprise for the offseason. Every year has a few contracts that make us grimace and wonder when the price of mediocre starters went up; that's how inflation works! This was not the offseason of pitchers begging for contracts that it seemed it might be.

There were two big groupings of free agents this winter, of starters and corner outfielders, and it seemed like if a team was looking to fill a hole at one of those positions, it would have an easy time doing so. Instead, teams still had to pay players a lot of money, for the most part. Is this a total refutation of the theory that increase free agent supply drives prices down, or that an offseason with few free agents is a good time for a player to be on the market? No, certainly not. Should it make you question that idea, the next time you see it in print? Yeah, probably.

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Henry Druschel is a Contributing Editor at Beyond the Box Score. You can follow him on Twitter at @henrydruschel.