There’s a point at which, considering the free agent market standing as it is (pending future results, of course), a market inefficiency becomes glaringly obvious. When front offices were a bit more odious and drawn to RBIs and batting average, it was incredibly easy to completely miss the market on a player on the upper-bounds.
These days, it’s pretty much the obvious. With every team seemingly flattening the value of players to similar across the board it opens a massive opportunity in the form of what we know as a “market inefficiency” (scare quotes for sarcasm). As Twitter user LLW902 puts it, some would put Mike Moustakas in that category of market inefficiency:
moustakas' earnings since hitting free agency: $22.2 million— Lauren (checkmark coming 11-17-19) (@LLW902) November 6, 2019
moustakas' 3 year estimated value by fWAR (7.2): $57.9 million
there are 15 teams who got less value than that out of 3rd base since then, including the red sox, mets, rays, phillies, dbacks, mariners and angels
In his final year before free agency, Moustakas hit .272/.314/.521 with 38 home runs and 2 fWAR. That’s a solid season, and at 29 years-old, it’s a fair bet that he’d be worth a solid, mid-market contract at year’s end. MLB Trade Rumors even predicted he would receive a five-year, $85 million deal. He in fact received one year and $6.5 million, while being traded to the Brewers midway through 2018.
Going into last season, the thinking was, ‘OK, sure, he may not have gotten the big deal, but at least this time around he’ll get something decent.” Well, he got a one-year deal again, this time worth $10 million with a mutual option that he obviously declined.
This time around, FanGraphs predicts that he will sign for $36 million over three years. Let’s think about this, though I do think that prediction seems to be Lucy-with-the-football once again. If he were to ink that deal, he would have made a grand total of $52.5 million over a five-year period.
Not only is that basically what he could have signed for out of the gate, but it lacked both the consistency of knowing where you’d live, and the uncertainty that if he got that big injury, the next piece of it would never come; that’s pretty much why free agency exists to begin with. And in terms of surplus value, even the $52.5 million would be a total bargain, as his total projected five-year total of let’s say about 12 wins would still be worth upwards of $100 million when you consider the inflation in the cost of a win.
That’s why when people (journalists, executives, owners, fans, etc.) tell you that Actually, these players are never a good deal, it’s a total and flat-out lie. Not signing Mike Moustakas to the deal he always could have been signed to has nothing to do with him not being valuable enough to make the contract—he has a 114 OPS+ over his last 2500 plate appearances and hasn’t had a full season dip below 107—it’s about depressing the value of a win at the mid-level, plain and simple.
If Moustakas becomes a player that is just worth one-year deals at a time worth $5-10 million, and then maybe gets two years later if he performs by age 31, it’s an absolutely terrible model for free agency, and it’s a clear case of trying to deliberately set the price for a win artificially. Some would even liken this year-to-year model to arbitration, which was always considered a compromise position between the reserve clause and free agency.
Yet there’s some savvy owner out there (there probably isn’t), who could easily survey this landscape and pull the wool over the eyes of the other owners. There is, once again, nothing stopping an owner from deciding that if teams are going to value players at half of their $/WAR, then it makes sound financial sense to at a bare minimum to offer half of their $/WAR plus one dollar, so to speak.
He’s not the only one, obviously. Yasmani Grandal only got a one-year deal after four straight 4+ WAR seasons. Josh Donaldson more justifiably got one year, but then he put up a 4+ WAR season. Dallas Keuchel got that partial one-year after putting up five straight 2.3+ fWAR seasons.
If a team signed all four of those players to an imaginary replacement level team, for a measly $64.25 million and no multi-year commitment, that team alone would win ~62 games, which is pretty remarkable. That group would produce something like $109 million in win value. There’s something like doubling-up on value right there, right in the open once again. Just step right up and claim it.