Trends in Major League Salaries (Tim Lincecum Edition)

3rd year player, or best pitcher in the NL?

Tuesday Tim Lincecum filed an arbitration claim of $13 million dollars.  The Giants countered with $8 million.  He made $650,000 last year, so he’s due for a big raise no matter what.  But if Lincecum wins, what appears to be a big victory for the players may actually be a death knell for dozens of mediocre veteran players looking for work.

Growing up a baseball fan in the 1990s, my impression of salaries was that players were paid for being veterans.  Rookies made very little, veterans made more, and great veteran players made the most.  Baseball rewarded time in the big leagues primarily, and performance secondly.  That made sense to me, as that’s how I understood the real world worked.  Work for the same company for many years, and your salary will go up. 

In this last decade, I’ve seen the rise of a parallel argument for high player salaries.  The new argument is that production is production, regardless of experience level.  This is the basis for Alfonso Soriano, Miguel Cabrera, Ryan Howard, and Tim Lincecum’s large arbitration salary claims.  No one doubted they were, at the time, among the best players in the game.  Their agents, and by extension the Players Union, argued that they should be paid as such.
 
In the last 5 years, teams have realized that arbitration is becoming as costly as free agency.  Thus, shrewd teams like Cleveland (Grady Sizemore) and Tampa Bay (Evan Longoria) have signed young stars to long-term deals which buy out arbitration and a year or two of free agency.  The player gets the security of guaranteed money, and gives up some money they could receive via the arbitration route.  Those contracts are also mutual affirmations of interest in the relationship between team and player, symbolic actions which resonate with fan bases but which may actually have limited value to the participants (Joe Mauer’s impending free agency being the ultimate test of that).
 
But players like Tim Lincecum and Jonathan Papelbon, who do not sign deals but rather keep hitting the arbitration trough, are undermining the notion that experience drives salary increases.  What’s more, they are undermining the entire notion of arbitration.  What is the point of “team control” if arbitration salaries are subject to the same market values as free agent contracts?  Why are the Giants in danger of making Tim Lincecum one of the highest-paid pitchers in the game if they “control” him for four more years?  It’s like the Giants are being forced to make a big free agent signing.
 
This trend is pushing teams to devalue experience and, by extension, losing player loyalty.  The Red Sox have become extremely unsentimental, as evidenced by their exports of Pedro and Manny, and their attempts to rid themselves of Jason Varitek.  Teams are increasingly tapping a rookie over a veteran player if both men contribute the same win shares to the team.  Why pay more for the same results?
 
I believe the Players Union is running a significant risk here.  Pushing the arbitration system to such extremes is a transparent grab for a bigger slice of the billions in revenue inundating baseball.  But making arbitration so expensive will only encourage teams to abandon mediocre veteran players in favor of cheap rookies.  This trend appeared in the great number of unsigned free agents last off season.  It isn’t collusion – in fact, it is the reaping of a crop the players have sewn.
 
We may not be too far from a point where major league teams are comprised of a few all stars making $10-$30 million a year, and a lot of rookies and veterans willing to play on the cheap.  Free agents will be evaluated by their wins added, and the market rate for a win will determine the deals they are offered.  “Paying your dues” in the league before seeing big money will be 2+ years of service time instead of 6, as your free agency will really start with your first arbitration hearing.  Promising young players will sign their first big contract after 2-4 years of service time, and hope that they are still all-stars when that contract runs out.
 
And the Players Union, which clamours that the market should dictate players salaries, will get exactly what they ask for.  Baseball, like the NFL, will be a game where you need to grab your money fast.  Not because a linebacker can land on your knee and end your career, but because there will always be a rookie with no service time waiting in the minors to take your roster spot.
Advertisements

2 Responses

  1. […] willingness to employ a mediocre player just because he’s been around for ten years.  I elaborate on this over on All Swings […]

  2. This has a similar tune to that of the “slotting system” (that can be heavily disregarded) for bonuses in the amateur draft. Eventually the agents will exert too much control in the matter and the players reap the benefits. The same happens with international free agents. It’s gross, but at least the arbitration process is grounded in MLB experience, while drafted players and int. FA have no proof of MLB level success. Strasburg is not a sure bet to be a success, yet he’ll make way more than Lincecum in his early years…same for Aroldis Chapman (oddly enough the Stras-Chap contracts are similar with Chapman getting a backloaded bonus thru 2020). It feels weird, but for so many years of a club getting a freebie on a top level player it almost seems fair for him to receive what equates to a 2000% raise. That said, the payroll weighting can be lifted by clubs placing limits on contract lengths. Arsenal, a English soccer team, has a policy of giving players over 30 contracts of only 1 year. For baseball players it could be age 32-33.
    It’s kind of a stupid market when you think about it. What do baseball players do that actually benefits the world? Nobel Scientists get a nice little prize, but nothing in comparison to someone who gets paid millions to swing a piece of wood and wear some leather.
    Anyway here is some interesting reading on revamping the baseball contract system:
    http://sportsillustrated.cnn.com/2010/writers/sky_andrecheck/01/14/andrecheck.free.agency/index.html

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: