This column happened by accident. The conversation was about speed. Specifically, about a pursuit of speed so complete that the Royals might now have the fastest team in recent baseball history. But that will be a later column.
For our purposes today, the moment that turned was a question to Royals second baseman Whit Merrifield about whether this is smart business. You know, buy up an undervalued skill and see if it plays.
Baseball’s reigning stolen bases leader was not in the mood to talk about what’s undervalued.
“No, I believe in spending money,” he said. “We’re the talent. We’re the players. We generate a ton of money for this game and I believe it should be spent on us more than it is. It’s not the owners’ fault right now because it’s a broken system, but we’re looking forward to changing that soon.”
Merrifield is a good person to speak on this from the players’ perspective. He was terrific in 2018, the third player since World War II to lead baseball in hits and steals. He slashed .304/.367/.438 with 43 doubles. He was 16th in baseball in Fangraphs’ version of WAR.
He is also the Royals’ assistant representative in MLBPA, the players’ union, and signed a four-year contract with $16.25 million in guarantees. Even with a club option and a total potential worth of $31.75 million, he will be paid far less than his open-market value, and everyone knows this.
We should pause for a quick disclaimer here. It’s easy to misunderstand when baseball players talk about money. The average American household income is about $60,000. Earn that for the next 270 years and you have the minimum guarantee on Merrifield’s new contract. But baseball players universally understand they live a good life, and that they’re well paid. That’s not the point.
The point is that the sport’s revenues have consistently grown and salaries for players — the ones who make it all go — have not kept up. Payrolls dropped in 2018 for only the fourth time in 50 years, and player compensation as a percentage of revenue also fell.
The point, then, is not whether baseball players are able to buy a nice house. The point is that they’re not being given what history has shown to be a fair share of the revenue. As we’re talking, Merrifield is about to make another point but a few players have been listening in.
“Here’s the problem,” said veteran Royals outfielder Alex Gordon. “I’ll tell you the problem.”
Gordon is the Royals’ lead union rep. He is in the last year of a four-year, $72 million contract that makes him one of the last cowboys. Guys like him don’t get that much money anymore.
That’s hard to see sometimes. Bryce Harper signed for a record $330 million, Manny Machado $300 million, and Nolan Arenado $260 million. Those are monster contracts. They’re also not the point. The best players will always be paid.
The point is the disappearing money to the other 99 percent. The most obvious local example is infielder Mike Moustakas, who set a Royals record with 40 home runs and has signed two one-year deals for a total of $13.5 million.
“This guy got screwed,” Gordon said of Moustakas. “You hit 40 home runs, you shouldn’t be (expletive) searching for a job, especially at Kauffman Stadium.”
Others, like Josh Donaldson, Marwin Gonzalez and Yasmani Grandal, have had to take lower salaries or fewer years than expected. At least they have jobs. Dallas Keuchel and Craig Kimbrel are among the best at what they do. Gio Gonzalez and Adam Jones are accomplished players who could surely help a contender. They remain unsigned, which brings us back to Gordon’s point.
“Teams have control of guys way too long,” Gordon said. “Being a free agent now sucks,” he said. “It used to be, ‘Now I’m a free agent, I put my time in and now I can enjoy it.’ But now you’re older and teams are looking at older players different now, which is fine.
“But if that’s the case — if you’re not going to pay older veterans who put in the work for six years and then don’t get paid — then you need to pay younger players what they deserve after one year. Aaron Judge shouldn’t be making (close to) the minimum after an MVP (caliber) season.”
In other words: Baseball’s pay structure is based on an outdated model of how teams value talent.
Teams have evolved — improved, if we’re honest — their spending priorities. Long-term deals for veterans rarely work out. Even when a player signs a big free-agent deal and produces, he often doesn’t match the production of his first six years, when he’s under original club control.
So teams will still pay for the superstars but are putting a higher priority on their own in-house (read: cheaper) talent. That’s compounded by the fact that more teams are simply not trying to win in the short-term.
Three teams, including the Royals, lost more than 100 or more games last year. Six more lost 95 or more. That’s nearly one-third of the league, so as teams put less value on veteran leadership and more on younger players with club controlled contracts, that means fewer bidders for accomplished players.
“What we’re seeing the last two offseasons is an unprecedented number of clubs who are seemingly content with not acquiring veteran players who can immediately improve the product on the field and for the fans,” said Bruce Meyer, the newly hired lead negotiator for the union.
The Royals are one of those clubs. They lost 104 games last year and have since trimmed their payroll. General manager Dayton Moore has said he will no longer use the world “rebuilding,” but everyone knows what’s going on here.
In our conversation, Merrifield was asked if the Royals are among the teams that need to spend more money.
“I think Dayton is trying to win,” he said. “Obviously we’d like to see more money spent, but ... I can’t answer that yes or no. It’s kind of a loaded question.”
The teams’ side of this is fairly simple. They’re spending smarter. Generally speaking, there is a belief among many that the sport is full of more average players. Those are the guys no longer getting huge contracts. Relievers are getting more money, and those at the top of rotations and middle of lineups will always be in demand.
But big contracts for back-end starters — such as the five years and $70 million the Royals gave pitcher Ian Kennedy — are no longer being offered. From the teams’ side, it’s supply and demand, combined with a new age of player valuation.
That’s good for the game, and can be good for players, too — if the pay structure is updated. Because (one more time) the point isn’t that teams should go back to overpaying older players. The point is that if teams are valuing younger players more, they should be paying younger players more.
Right now, rookies play for an MLB-minimum salary of less than $600,000. They receive small raises without negotiation until their fourth year (some hit arbitration a year earlier). That’s good value for teams, and it’s shrinking the total payouts. There are examples.
Gordon mentioned Judge. He won the AL’s rookie of the year award and finished second in the MVP voting in 2017. He’s made a total of $1.2 million.
Francisco Lindor is among the game’s most dynamic players. He’s a switch hitting, Gold Glove shortstop with three top 10 MVP finishes in four seasons. He’s made a total of $1.7 million.
Jose Ramirez is a six-year veteran who’s finished third in MVP voting each of the last two seasons. Career earnings: $4.8 million.
Blake Snell won the AL Cy Young last year and will make about $600,000 this year.
This is the system’s flaw: Teams are no longer paying veterans what they used to, and they don’t have to pay young players what they’re worth.
“I’m not saying we should get more money,” Gordon said. “I’m saying it should be fair. I’m saying if you’re going to treat older players the way you are, then young players need to get what they deserve.”
This is all prelude to what industry insiders say will be the most contentious negotiation in years when the current collective bargaining agreement expires after the 2021 season.
The players will be looking for not just an updated pay structure, but more incentives for teams to win. Maybe you lose a draft pick or pay a tax if you don’t win a certain number of games over a two-year period. The luxury tax has turned into a de facto salary cap.
Fair is fair. An update is needed.
“We don’t want to sound like we’re complaining,” Gordon said. “We’re happy. We get paid well. There’s just got to be a way for it to be fair. Not for me and (Merrifield), but just the players as a whole. We just want what’s fair.”